Yahoo Finance Sonic Automotive (SAH) Down 4.2% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Sonic Automotive (SAH). Shares have lost about 4.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sonic Automotive due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Sonic's Q4 Earnings Miss Estimates
Sonic registered registered fourth-quarter 2023 adjusted earnings per share of $1.63, missing the Zacks Consensus Estimate of $1.80 and declining 37.5% from the year-ago quarter figure. Total revenues amounted to $3,585 million, marginally beating the Zacks Consensus Estimate of $3,580 million but falling short of the year-ago figure of $3,590 million.
Quarter in Detail
On a consolidated basis, revenues from sales of new vehicles, used vehicles, wholesale vehicles totaled $1.7 billion (up 8% year over year), $1.22 billion (down 9% year over year) and $62.6 million (down 22% year over year), respectively. Revenues from Parts, Service and Collison Repair grew 5% to $432 million. Finance, Insurance and other revenues declined 4% to $166 million. Gross profit declined 6% to $541.1 million.
In the Franchised Dealerships segment, revenues from the sales of new vehicles, used vehicles, wholesale vehicles totaled $1.68 billion (up 8% year over year), $727.5 million (down 12% year over year) and $39.3 million (down 25% year over year), respectively. Revenues from Parts, Service and Collison Repair grew 5% to $425 million. Finance, Insurance and other revenues declined 4% to $123.2 million. Same store revenues from the Franchised Dealership segment rose 2% to roughly $3 billion. Same store retail units of new and used vehicles came in at 52,626, up 1% on a yearly basis.
The EchoPark segment reported quarterly revenues of $556.6 million, marking a 6% decrease from the year-ago figure. Revenues comprised $492.5 million (down 4%) from used vehicle sales, $22.6 million (down 17%) from wholesale vehicle sales and $41.5 million (down 7%) from Finance, Insurance and Other. Its stores sold 17,562 and 2,621 used and wholesale vehicle units, up 1% and 7%, respectively, on a year-over-year basis. Same store revenues from the EchoPark segment rose 39% to roughly $481 million. Same store retail units of used and wholesale vehicles came in at 19,204, up 42% on a yearly basis.
In the Powersports segment, revenues from the sales of new vehicles, used vehicles and wholesale vehicles totaled $16.1 million (down 14% year over year), $2.4 million (up 14% year over year) and $0.7 million (up a whopping 600% year over year), respectively. Revenues from Parts, Service and Collison Repair grew 6% to $6.7 million. Finance, Insurance and other revenues remained flat on a year-over-year basis at $1.3 million. Same store revenues from the Powersports segment declined 15% to $24.4 million. Same store retail units of new and used vehicles came in at 1,133, down 9% on a yearly basis.
Selling, general and administrative expenses declined 5% year over year to $386.3 million in the quarter. Sonic declared a quarterly cash dividend of 30 cents, which will be paid out on Apr 15, 2024, to stockholders of record as of Mar 15, 2024. During 2023, Sonic bought back approximately 3.3 million shares for about $177.6 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Sonic Automotive has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Sonic Automotive has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Sonic Automotive belongs to the Zacks Automotive - Retail and Whole Sales industry. Another stock from the same industry, AutoNation (AN), has gained 7.8% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
AutoNation reported revenues of $6.77 billion in the last reported quarter, representing a year-over-year change of +1.1%. EPS of $5.02 for the same period compares with $6.37 a year ago.
AutoNation is expected to post earnings of $4.49 per share for the current quarter, representing a year-over-year change of -25.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for AutoNation. Also, the stock has a VGM Score of D.
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