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Fundamental analysis: AutoNation, Inc. (AN)

Awarener score: 7.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Good), the business stability (Good) and growth (Modest), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 6.0

  • Business growth has been almost stagnant. It's been weak when measured against peer companies.
  • AutoNation, Inc. business trend stability is good. The higher the stability, the lower the risk. It looks well ranked against rivals.

Margins score: 5.5

  • AN profit margins -on goods and services sold- are usually very poor. They stand slightly better than rival companies.
  • Business profit on sales tends to be good. It's similar to competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually hardly sufficient. They remain close to average when compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be sufficient in relation to total revenues. They're still slightly better than similar companies.
  • Profits -before income taxes- are usually sufficient considering total sales, and remain similar to rivals.
  • Total net profit tends to be sufficient when confronted to sales. Company stands similar to comparable firms.

Growth score: 8.0

  • AutoNation, Inc. profit -on goods and services sold- has been growing at a normal pace. It's been close to average when compared to competitors.
  • In recent years, earnings -on operations- have been growing at an excellent step, which has been somewhat better than comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a very good pace, which compares similar to peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a very good tempo. It turns to be a slight improvement compared to similar stocks.
  • In past years, profits -before income taxes- grew at a very good speed. It was better than most rivals.
  • In the previous years, growth trend on total net profit has been very good, and top tier when measured against peer companies.
  • Earnings per share have grown at an excellent rhythm in past years. It's been impressive in relation to industry peers.

Miscellaneous score: 4.0

  • AN had to pay substantial income taxes in relation to profits made in the past years. It's been somewhat worse than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 9.2

  • AutoNation, Inc. usually gets excellent returns on the resources it controls. It proves great when measured against peer firms.
  • The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain excellent in relation to similar companies.
  • Profitability -in relation to owned resources- is usually paramount. It ranks more than average in relation to competitors.
  • In the past, got excellent returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's great when measured against comparable enterprises.

Usage of Funds score: 5.0

  • AN usually uses almost all genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is huge. It stands great when measured against rival firms.
  • The company is usually investing in new property, plant, and equipment, to improve its operating capabilities, which is almost average when measured against industry peers.
  • In the past twelve months the stock paid no dividends. It came bottom tier against competitors.
  • The company pays no dividend, so measuring its growth is meaningless. The company has behaved in an conservative way compared to similar firms.
  • As no dividends are paid, it is useless trying to estimate their sustainability in time. Sustainability looks not applicable in regard to comparable companies.
  • The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains impressive in relation to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands excellent in relation to rivals.
  • The company uses a lot more funds to reward investors than it can genuinely generate, so they're paid out of existing cash or by borrowing money, both of which will eventually reach a limit. Either business improves, or rewards won't keep at current pace. It still looks substantially worse when measured against competitors.

Balance Sheet score: 5.3

  • AutoNation, Inc. intangible assets (like brands and goodwill) represent a significant portion of resources controlled, according to accounting books. There could be significant difficulties in liquidating them if the company ever gets in financial distress. It happens to be weak when measured against peer companies.
  • The company has somewhat lower short-term resources than short-term obligations. Unless it's part of the business model, there might some liquidity concerns. It turns to be in a weak position compared to similar firms.
  • A significant part of resources controlled were provided for with financial debt. Creditors have almost as many claims on the company as shareholders. It remains somewhat worse than rival firms.
  • Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks almost average when measured against rivals.
  • For every dollar of short-term obligations, the company has less than a dollar of cash and short-term receivables. It's rather normal in relation to peer firms.
  • For every dollar of short-term obligations, the company has very few cents of cash and equivalents, which is slightly better than similar enterprises.
  • Usually, sales are on less than a month credit. It still ranks more than average in relation to peers.
  • Normally has approximately somewhat less than two months of sales worth in inventory. It comes up as a slight improvement compared to competitors.
  • On average, it takes approximately two months from the purchase to charging customers. It happens to be top-notch against peers.
  • On average pays suppliers during the first couple of weeks from the purchase. It ranks weak when measured against industry peers.
  • The company pays its suppliers roughly one month before charging its customers, so there's sparse money invested in working capital. It's a slight improvement compared to similar companies.
  • Net interest expenses consume a minor portion of usual business earnings, and are easily bearable. It stands slightly worse than rival firms.
  • Business earnings have usually been quite good when measured against loans taken. Cutting back reinvesting in the business, it could take around three years to repay the obligations with current profitability. It ranks encouraging in relation to comparable enterprises.
  • Revenues are quite good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks a slight improvement compared to similar firms.
  • Resource exploitation is huge considering yearly sales, which is great. This metric is normally tied to the industry where the firm belongs. It's still top-notch against peer companies.

Valuation score: 6.4

  • AutoNation, Inc. looks cheap in relation to profits and financial position. It happens to be great when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a very weak position compared to peers.
  • In the past twelve months, the company neither generated nor consumed funds. Whatever funds it could get, it reinvested in the business, which stands somewhat worse than similar companies.
  • In the past years the company barely generated enough genuine funds to cover up for its business needs. Business prospects should improve to be in a better position to reward investors. It's still great when measured against industry firms.
  • In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up impressive in relation to peer ventures.
  • The company is indebted, it should focus on loan repayment. It looks slightly better than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation looks cheap. Possible reasons are that the market might be betting current earnings will be hard to sustain through time, or that the company has very high fund needs, or a weak financial position, among others. If that isn't the case, the current stock price might be attractive. It ranks more than average in relation to peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a low relationship. One common cause includes profitability being poor. It looks a slight improvement compared to rival firms.
  • The relation between the stock price and accounting book value is really high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains mediocre against peer firms.
  • In the past twelve months, the operating business earned great money when compared to the current stock price and financial position. It happens to be top tier when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown an excellent earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be undervalued. It's still excellent in relation to peer companies.

Total score: 6.2


AN logos

Company at a glance: AutoNation, Inc. (AN)

Sector, industry: Consumer Cyclical, Auto & Truck Dealerships

Market Cap: 10.38 billions

Revenues TTM: 26.87 billions

AutoNation, Inc., through its subsidiaries, operates as an automotive retailer in the United States. The company operates through three segments: Domestic, Import, and Premium Luxury. It offers a range of automotive products and services, including new and used vehicles; and parts and services, such as automotive repair and maintenance, and wholesale parts and collision services. The company also provides automotive finance and insurance products comprising vehicle services and other protection products, as well as arranges finance for vehicle purchases through third-party finance sources. As of December 31, 2021, it owned and operated 339 new vehicle franchises from 247 stores located primarily in metropolitan markets in the Sunbelt region. The company also owned and operated 57 AutoNation-branded collision centers, 9 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, and 3 parts distribution centers. AutoNation, Inc. was founded in 1991 and is headquartered in Fort Lauderdale, Florida.

Awarener score: 7.2

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Good), the business stability (Good) and growth (Modest), and the company's inclination to return cash to the stockholders (Superb).