SONIC AUTOMOTIVE INC-CLASS A (SAH) Stock Fundamental Analysis
NYSE:SAH - New York Stock Exchange, Inc. - US83545G1022 - Common Stock - Currency: USD
SAH gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 121 industry peers in the Specialty Retail industry. There are concerns on the financial health of SAH while its profitability can be described as average. SAH has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year SAH was profitable.
In the past year SAH had a positive cash flow from operations.
SAH had positive earnings in 4 of the past 5 years.
Of the past 5 years SAH 4 years had a positive operating cash flow.
1.2 Ratios
SAH's Return On Assets of 4.16% is fine compared to the rest of the industry. SAH outperforms 65.29% of its industry peers.
SAH's Return On Equity of 22.42% is fine compared to the rest of the industry. SAH outperforms 79.34% of its industry peers.
The Return On Invested Capital of SAH (7.76%) is better than 67.77% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SAH is below the industry average of 13.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.16% | ||
| ROE | 22.42% | ||
| ROIC | 7.76% |
ROA(3y)2.92%
ROA(5y)2.88%
ROE(3y)16.73%
ROE(5y)15.27%
ROIC(3y)8.98%
ROIC(5y)8.83%
1.3 Margins
SAH has a Profit Margin (1.69%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of SAH has grown nicely.
The Operating Margin of SAH (3.48%) is comparable to the rest of the industry.
SAH's Operating Margin has been stable in the last couple of years.
SAH has a worse Gross Margin (15.34%) than 87.60% of its industry peers.
SAH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.48% | ||
| PM (TTM) | 1.69% | ||
| GM | 15.34% |
OM growth 3Y-9.02%
OM growth 5Y0.78%
PM growth 3Y-18.59%
PM growth 5Y1.97%
GM growth 3Y-0.06%
GM growth 5Y1.16%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), SAH is creating some value.
SAH has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, SAH has less shares outstanding
The debt/assets ratio for SAH has been reduced compared to a year ago.
2.2 Solvency
SAH has an Altman-Z score of 3.52. This indicates that SAH is financially healthy and has little risk of bankruptcy at the moment.
SAH has a better Altman-Z score (3.52) than 79.34% of its industry peers.
SAH has a debt to FCF ratio of 82.25. This is a negative value and a sign of low solvency as SAH would need 82.25 years to pay back of all of its debts.
SAH has a Debt to FCF ratio (82.25) which is in line with its industry peers.
SAH has a Debt/Equity ratio of 3.40. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of SAH (3.40) is worse than 76.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.4 | ||
| Debt/FCF | 82.25 | ||
| Altman-Z | 3.52 |
ROIC/WACC0.89
WACC8.76%
2.3 Liquidity
SAH has a Current Ratio of 1.09. This is a normal value and indicates that SAH is financially healthy and should not expect problems in meeting its short term obligations.
SAH's Current ratio of 1.09 is on the low side compared to the rest of the industry. SAH is outperformed by 68.59% of its industry peers.
A Quick Ratio of 0.38 indicates that SAH may have some problems paying its short term obligations.
With a Quick ratio value of 0.38, SAH is not doing good in the industry: 61.98% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.38 |
3. Growth
3.1 Past
SAH shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -16.37%.
The Earnings Per Share has been growing by 16.23% on average over the past years. This is quite good.
SAH shows a small growth in Revenue. In the last year, the Revenue has grown by 1.59%.
Measured over the past years, SAH shows a small growth in Revenue. The Revenue has been growing by 6.35% on average per year.
EPS 1Y (TTM)-16.37%
EPS 3Y-12.92%
EPS 5Y16.23%
EPS Q2Q%8.82%
Revenue 1Y (TTM)1.59%
Revenue growth 3Y4.69%
Revenue growth 5Y6.35%
Sales Q2Q%7.9%
3.2 Future
SAH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.45% yearly.
Based on estimates for the next years, SAH will show a small growth in Revenue. The Revenue will grow by 7.76% on average per year.
EPS Next Y12.84%
EPS Next 2Y12.14%
EPS Next 3Y12.93%
EPS Next 5Y15.45%
Revenue Next Year5.54%
Revenue Next 2Y4.48%
Revenue Next 3Y5.91%
Revenue Next 5Y7.76%
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 stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
SAH is valuated correctly with a Price/Earnings ratio of 15.24.
Based on the Price/Earnings ratio, SAH is valued a bit cheaper than 77.69% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.29. SAH is valued slightly cheaper when compared to this.
SAH is valuated correctly with a Price/Forward Earnings ratio of 12.38.
SAH's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SAH is cheaper than 74.38% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.74, SAH is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.24 | ||
| Fwd PE | 12.38 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SAH is valued a bit cheaper than the industry average as 69.42% of the companies are valued more expensively.
SAH's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 63.94 | ||
| EV/EBITDA | 7.56 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
SAH's earnings are expected to grow with 12.93% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.19
PEG (5Y)0.94
EPS Next 2Y12.14%
EPS Next 3Y12.93%
5. Dividend
5.1 Amount
SAH has a Yearly Dividend Yield of 1.60%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.99, SAH pays a bit more dividend than its industry peers.
SAH's Dividend Yield is slightly below the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.6% |
5.2 History
On average, the dividend of SAH grows each year by 27.13%, which is quite nice.
SAH has been paying a dividend for at least 10 years, so it has a reliable track record.
SAH has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)27.13%
Div Incr Years4
Div Non Decr Years14
5.3 Sustainability
17.38% of the earnings are spent on dividend by SAH. This is a low number and sustainable payout ratio.
SAH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP17.38%
EPS Next 2Y12.14%
EPS Next 3Y12.93%
87.18
-0.39 (-0.45%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners70.87%
Inst Owner Change0%
Ins Owners28.46%
Ins Owner Change-2.7%
Market Cap2.96B
Analysts77.14
Price Target75.1 (-13.86%)
Short Float %9.87%
Short Ratio7.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.6% |
Yearly Dividend1.2
Dividend Growth(5Y)27.13%
DP17.38%
Div Incr Years4
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.9%
Min EPS beat(2)1.52%
Max EPS beat(2)2.28%
EPS beat(4)3
Avg EPS beat(4)-0.83%
Min EPS beat(4)-12.77%
Max EPS beat(4)5.65%
EPS beat(8)6
Avg EPS beat(8)1%
EPS beat(12)7
Avg EPS beat(12)-1.69%
EPS beat(16)10
Avg EPS beat(16)5.48%
Revenue beat(2)2
Avg Revenue beat(2)4.97%
Min Revenue beat(2)3.11%
Max Revenue beat(2)6.82%
Revenue beat(4)2
Avg Revenue beat(4)0.69%
Min Revenue beat(4)-4.59%
Max Revenue beat(4)6.82%
Revenue beat(8)4
Avg Revenue beat(8)0%
Revenue beat(12)5
Avg Revenue beat(12)-1.91%
Revenue beat(16)7
Avg Revenue beat(16)-1.2%
PT rev (1m)5.39%
PT rev (3m)-7.47%
EPS NQ rev (1m)0%
EPS NQ rev (3m)4.27%
EPS NY rev (1m)1.36%
EPS NY rev (3m)0.31%
Revenue NQ rev (1m)-0.67%
Revenue NQ rev (3m)2.6%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.24 | ||
| Fwd PE | 12.38 | ||
| P/S | 0.2 | ||
| P/FCF | 63.94 | ||
| P/OCF | 12.61 | ||
| P/B | 2.71 | ||
| P/tB | 9.77 | ||
| EV/EBITDA | 7.56 |
EPS(TTM)5.72
EY6.56%
EPS(NY)7.04
Fwd EY8.08%
FCF(TTM)1.36
FCFY1.56%
OCF(TTM)6.91
OCFY7.93%
SpS426.73
BVpS32.12
TBVpS8.92
PEG (NY)1.19
PEG (5Y)0.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.16% | ||
| ROE | 22.42% | ||
| ROCE | 15.52% | ||
| ROIC | 7.76% | ||
| ROICexc | 7.86% | ||
| ROICexgc | 9.3% | ||
| OM | 3.48% | ||
| PM (TTM) | 1.69% | ||
| GM | 15.34% | ||
| FCFM | 0.32% |
ROA(3y)2.92%
ROA(5y)2.88%
ROE(3y)16.73%
ROE(5y)15.27%
ROIC(3y)8.98%
ROIC(5y)8.83%
ROICexc(3y)9.23%
ROICexc(5y)9.2%
ROICexgc(3y)10.85%
ROICexgc(5y)10.93%
ROCE(3y)16.97%
ROCE(5y)16.85%
ROICexcg growth 3Y-14.51%
ROICexcg growth 5Y-0.73%
ROICexc growth 3Y-12.08%
ROICexc growth 5Y-0.71%
OM growth 3Y-9.02%
OM growth 5Y0.78%
PM growth 3Y-18.59%
PM growth 5Y1.97%
GM growth 3Y-0.06%
GM growth 5Y1.16%
F-Score5
Asset Turnover2.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.4 | ||
| Debt/FCF | 82.25 | ||
| Debt/EBITDA | 5.82 | ||
| Cap/Depr | 141.41% | ||
| Cap/Sales | 1.3% | ||
| Interest Coverage | 2.54 | ||
| Cash Conversion | 36.84% | ||
| Profit Quality | 18.93% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.38 | ||
| Altman-Z | 3.52 |
F-Score5
WACC8.76%
ROIC/WACC0.89
Cap/Depr(3y)168.98%
Cap/Depr(5y)194.01%
Cap/Sales(3y)1.45%
Cap/Sales(5y)1.61%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-16.37%
EPS 3Y-12.92%
EPS 5Y16.23%
EPS Q2Q%8.82%
EPS Next Y12.84%
EPS Next 2Y12.14%
EPS Next 3Y12.93%
EPS Next 5Y15.45%
Revenue 1Y (TTM)1.59%
Revenue growth 3Y4.69%
Revenue growth 5Y6.35%
Sales Q2Q%7.9%
Revenue Next Year5.54%
Revenue Next 2Y4.48%
Revenue Next 3Y5.91%
Revenue Next 5Y7.76%
EBIT growth 1Y-0.02%
EBIT growth 3Y-4.75%
EBIT growth 5Y7.18%
EBIT Next Year30.8%
EBIT Next 3Y14.9%
EBIT Next 5Y12.81%
FCF growth 1Y153.9%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y96.32%
OCF growth 3Y-29.11%
OCF growth 5Y-8.59%