Sonic Automotive, Inc.
Sonic Automotive, Inc. Fundamental Analysis
Sonic Automotive, Inc. (SAH) shows weak financial fundamentals with a PE ratio of 17.02, profit margin of 0.78%, and ROE of 11.15%. The company generates $15.3B in annual revenue with weak year-over-year growth of -1.03%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 31.2/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SAH's fundamental strength across five key dimensions:
Efficiency Score
WeakSAH struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSAH trades at attractive valuation levels.
Growth Score
ModerateSAH shows steady but slowing expansion.
Financial Health Score
ModerateSAH shows balanced financial health with some risks.
Profitability Score
WeakSAH struggles to sustain strong margins.
Key Financial Metrics
Is SAH Expensive or Cheap?
P/E Ratio
SAH trades at 17.02 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, SAH's PEG of -1.98 indicates potential undervaluation.
Price to Book
The market values Sonic Automotive, Inc. at 1.89 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -4.11 times EBITDA. This is generally considered low.
How Well Does SAH Make Money?
Net Profit Margin
For every $100 in sales, Sonic Automotive, Inc. keeps $0.78 as profit after all expenses.
Operating Margin
Core operations generate 3.57 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $11.15 in profit for every $100 of shareholder equity.
ROA
Sonic Automotive, Inc. generates $1.99 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Sonic Automotive, Inc. generates limited operating cash flow of $580.83M, signaling weaker underlying cash strength.
Free Cash Flow
Sonic Automotive, Inc. generates weak or negative free cash flow of $429.28M, restricting financial flexibility.
FCF Per Share
Each share generates $12.56 in free cash annually.
FCF Yield
SAH converts 20.77% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
17.02
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.98
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.89
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.13
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.96
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.09
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.02
vs 25 benchmark
ROCE
Return on capital employed
0.16
vs 25 benchmark
How SAH Stacks Against Its Sector Peers
| Metric | SAH Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 17.02 | 23.49 | Better (Cheaper) |
| ROE | 11.15% | 1160.00% | Weak |
| Net Margin | 0.78% | 672.00% | Weak |
| Debt/Equity | 3.96 | 0.73 | Weak (High Leverage) |
| Current Ratio | 1.09 | 2.56 | Neutral |
| ROA | 1.99% | -8277.00% (disorted) | Weak |
SAH outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Sonic Automotive, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
71.64%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
89.04%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
-19.40%
Industry Style: Cyclical, Growth, Discretionary
Declining