PENSKE AUTOMOTIVE GROUP INC (PAG) Stock Fundamental Analysis
NYSE:PAG - New York Stock Exchange, Inc. - US70959W1036 - Common Stock
We assign a fundamental rating of 5 out of 10 to PAG. PAG was compared to 119 industry peers in the Specialty Retail industry. While PAG is still in line with the averages on profitability rating, there are concerns on its financial health. PAG has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
PAG had positive earnings in the past year.
In the past year PAG had a positive cash flow from operations.
PAG had positive earnings in each of the past 5 years.
In the past 5 years PAG always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 5.12%, PAG is doing good in the industry, outperforming 68.10% of the companies in the same industry.
With a decent Return On Equity value of 16.78%, PAG is doing good in the industry, outperforming 75.00% of the companies in the same industry.
PAG has a better Return On Invested Capital (6.64%) than 62.07% of its industry peers.
PAG had an Average Return On Invested Capital over the past 3 years of 8.36%. This is below the industry average of 12.38%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.12% | ||
| ROE | 16.78% | ||
| ROIC | 6.64% |
ROA(3y)8.44%
ROA(5y)6.51%
ROE(3y)28.25%
ROE(5y)23.36%
ROIC(3y)8.36%
ROIC(5y)6.69%
1.3 Margins
The Profit Margin of PAG (2.91%) is better than 65.52% of its industry peers.
In the last couple of years the Profit Margin of PAG has grown nicely.
PAG has a Operating Margin of 4.30%. This is comparable to the rest of the industry: PAG outperforms 59.48% of its industry peers.
In the last couple of years the Operating Margin of PAG has grown nicely.
PAG has a Gross Margin of 16.46%. This is amonst the worse of the industry: PAG underperforms 85.34% of its industry peers.
PAG's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.3% | ||
| PM (TTM) | 2.91% | ||
| GM | 16.46% |
OM growth 3Y10.99%
OM growth 5Y10.07%
PM growth 3Y10.26%
PM growth 5Y11.53%
GM growth 3Y2.36%
GM growth 5Y2.2%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PAG is destroying value.
Compared to 1 year ago, PAG has less shares outstanding
PAG has less shares outstanding than it did 5 years ago.
The debt/assets ratio for PAG is higher compared to a year ago.
2.2 Solvency
PAG has an Altman-Z score of 2.95. This is not the best score and indicates that PAG is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of PAG (2.95) is better than 67.24% of its industry peers.
The Debt to FCF ratio of PAG is 9.34, which is on the high side as it means it would take PAG, 9.34 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 9.34, PAG is in line with its industry, outperforming 52.59% of the companies in the same industry.
PAG has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
PAG has a Debt to Equity ratio of 1.02. This is comparable to the rest of the industry: PAG outperforms 41.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 9.34 | ||
| Altman-Z | 2.95 |
ROIC/WACC0.71
WACC9.33%
2.3 Liquidity
PAG has a Current Ratio of 0.91. This is a bad value and indicates that PAG is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.91, PAG is doing worse than 82.76% of the companies in the same industry.
A Quick Ratio of 0.20 indicates that PAG may have some problems paying its short term obligations.
The Quick ratio of PAG (0.20) is worse than 87.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.2 |
3. Growth
3.1 Past
PAG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.93%.
PAG shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 24.68% yearly.
Looking at the last year, PAG shows a small growth in Revenue. The Revenue has grown by 2.53% in the last year.
PAG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.32% yearly.
EPS 1Y (TTM)-18.93%
EPS 3Y33.58%
EPS 5Y24.68%
EPS Q2Q%-13.52%
Revenue 1Y (TTM)2.53%
Revenue growth 3Y13.04%
Revenue growth 5Y5.32%
Sales Q2Q%1.92%
3.2 Future
Based on estimates for the next years, PAG will show a small growth in Earnings Per Share. The EPS will grow by 1.66% on average per year.
The Revenue is expected to grow by 5.14% on average over the next years.
EPS Next Y-15.11%
EPS Next 2Y-5.94%
EPS Next 3Y-3.77%
EPS Next 5Y1.66%
Revenue Next Year3.12%
Revenue Next 2Y3.06%
Revenue Next 3Y2.76%
Revenue Next 5Y5.14%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 11.93, the valuation of PAG can be described as reasonable.
83.62% of the companies in the same industry are more expensive than PAG, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.29. PAG is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 11.44 indicates a reasonable valuation of PAG.
Based on the Price/Forward Earnings ratio, PAG is valued a bit cheaper than the industry average as 78.45% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 24.44. PAG is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.93 | ||
| Fwd PE | 11.44 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PAG is valued a bit cheaper than the industry average as 68.10% of the companies are valued more expensively.
PAG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. PAG is cheaper than 78.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.79 | ||
| EV/EBITDA | 8.66 |
4.3 Compensation for Growth
PAG has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as PAG's earnings are expected to decrease with -3.77% in the coming years.
PEG (NY)N/A
PEG (5Y)0.48
EPS Next 2Y-5.94%
EPS Next 3Y-3.77%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.56%, PAG has a reasonable but not impressive dividend return.
PAG's Dividend Yield is rather good when compared to the industry average which is at 3.27. PAG pays more dividend than 87.93% of the companies in the same industry.
PAG's Dividend Yield is comparable with the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
5.2 History
On average, the dividend of PAG grows each year by 14.30%, which is quite nice.
PAG has paid a dividend for at least 10 years, which is a reliable track record.
PAG has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)14.3%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
28.40% of the earnings are spent on dividend by PAG. This is a low number and sustainable payout ratio.
PAG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP28.4%
EPS Next 2Y-5.94%
EPS Next 3Y-3.77%
PENSKE AUTOMOTIVE GROUP INC
NYSE:PAG (1/21/2025, 8:19:13 PM)
After market: 162.91 0 (0%)162.91
+2.41 (+1.5%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners77.17%
Inst Owner Change-0.28%
Ins Owners1.12%
Ins Owner Change0.05%
Market Cap10.88B
Analysts70.67
Price Target182.81 (12.22%)
Short Float %1.95%
Short Ratio6.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
Yearly Dividend2.76
Dividend Growth(5Y)14.3%
DP28.4%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.96%
Min EPS beat(2)-1.64%
Max EPS beat(2)5.57%
EPS beat(4)1
Avg EPS beat(4)-2.17%
Min EPS beat(4)-7.49%
Max EPS beat(4)5.57%
EPS beat(8)4
Avg EPS beat(8)0.05%
EPS beat(12)8
Avg EPS beat(12)3.78%
EPS beat(16)12
Avg EPS beat(16)10.1%
Revenue beat(2)1
Avg Revenue beat(2)-0.73%
Min Revenue beat(2)-2.04%
Max Revenue beat(2)0.58%
Revenue beat(4)1
Avg Revenue beat(4)-0.7%
Min Revenue beat(4)-2.04%
Max Revenue beat(4)0.58%
Revenue beat(8)5
Avg Revenue beat(8)1.67%
Revenue beat(12)8
Avg Revenue beat(12)1.74%
Revenue beat(16)12
Avg Revenue beat(16)2.14%
PT rev (1m)0.54%
PT rev (3m)7.9%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.41%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.2%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.69%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-0.73%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.93 | ||
| Fwd PE | 11.44 | ||
| P/S | 0.36 | ||
| P/FCF | 16.79 | ||
| P/OCF | 10.52 | ||
| P/B | 2.09 | ||
| P/tB | 6.1 | ||
| EV/EBITDA | 8.66 |
EPS(TTM)13.66
EY8.38%
EPS(NY)14.24
Fwd EY8.74%
FCF(TTM)9.7
FCFY5.95%
OCF(TTM)15.48
OCFY9.5%
SpS449.41
BVpS77.93
TBVpS26.72
PEG (NY)N/A
PEG (5Y)0.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.12% | ||
| ROE | 16.78% | ||
| ROCE | 12.51% | ||
| ROIC | 6.64% | ||
| ROICexc | 6.68% | ||
| ROICexgc | 8.76% | ||
| OM | 4.3% | ||
| PM (TTM) | 2.91% | ||
| GM | 16.46% | ||
| FCFM | 2.16% |
ROA(3y)8.44%
ROA(5y)6.51%
ROE(3y)28.25%
ROE(5y)23.36%
ROIC(3y)8.36%
ROIC(5y)6.69%
ROICexc(3y)8.43%
ROICexc(5y)6.74%
ROICexgc(3y)10.94%
ROICexgc(5y)8.69%
ROCE(3y)14.83%
ROCE(5y)12.08%
ROICexcg growth 3Y19.17%
ROICexcg growth 5Y7.59%
ROICexc growth 3Y18.95%
ROICexc growth 5Y8%
OM growth 3Y10.99%
OM growth 5Y10.07%
PM growth 3Y10.26%
PM growth 5Y11.53%
GM growth 3Y2.36%
GM growth 5Y2.2%
F-Score5
Asset Turnover1.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 9.34 | ||
| Debt/EBITDA | 3.67 | ||
| Cap/Depr | 249.55% | ||
| Cap/Sales | 1.29% | ||
| Interest Coverage | 4.99 | ||
| Cash Conversion | 71.57% | ||
| Profit Quality | 74.18% | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.2 | ||
| Altman-Z | 2.95 |
F-Score5
WACC9.33%
ROIC/WACC0.71
Cap/Depr(3y)230.98%
Cap/Depr(5y)215.54%
Cap/Sales(3y)1.09%
Cap/Sales(5y)1.05%
Profit Quality(3y)80.46%
Profit Quality(5y)98.16%
High Growth Momentum
Growth
EPS 1Y (TTM)-18.93%
EPS 3Y33.58%
EPS 5Y24.68%
EPS Q2Q%-13.52%
EPS Next Y-15.11%
EPS Next 2Y-5.94%
EPS Next 3Y-3.77%
EPS Next 5Y1.66%
Revenue 1Y (TTM)2.53%
Revenue growth 3Y13.04%
Revenue growth 5Y5.32%
Sales Q2Q%1.92%
Revenue Next Year3.12%
Revenue Next 2Y3.06%
Revenue Next 3Y2.76%
Revenue Next 5Y5.14%
EBIT growth 1Y-9.28%
EBIT growth 3Y25.46%
EBIT growth 5Y15.92%
EBIT Next Year-0.07%
EBIT Next 3Y1.27%
EBIT Next 5Y-0.21%
FCF growth 1Y-26.7%
FCF growth 3Y-10.91%
FCF growth 5Y18.37%
OCF growth 1Y-11.72%
OCF growth 3Y-3.1%
OCF growth 5Y12.21%