Sonic Automotive, Inc.
$83.29
-0.80%Sonic Automotive, Inc. operates as an automotive retailer in the United States. It operates in two segments, Franchised Dealerships and EchoPark. The Franchised Dealerships segment is involved in the sale of new and used cars and light trucks, and replacement parts; provision of vehicle maintenance, manufacturer warranty repair, and paint and collision repair services; and arrangement of extended warranties, service contracts, financing, insurance, and other aftermarket products for its guests. The EchoPark segment sells used cars and light trucks; and arranges finance and insurance product sales for its guests in pre-owned vehicle specialty retail locations. As of December 31, 2021, the company operated 140 new vehicle franchises representing 28 brands of cars and light trucks; 17 collision repair centers in 17 states; and 46 EchoPark stores in 16 states, including 11 Northwest Motorsport pre-owned vehicle stores. Sonic Automotive, Inc. was incorporated in 1997 and is based in Charlotte, North Carolina.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is mid-range (P/E 23.9).
Valuation inputs: P/E 23.9, earnings yield +4.2%, momentum -0.8%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is acceptable (ROE +11.1%, ROIC +6.9%).
Profitability stack: net margin +0.8%, ROE +11.1%, ROIC +6.9%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceDownside profile is elevated and scenario stress-testing is essential.
Risk factors: liabilities/assets +82.1%, momentum -0.8%, net margin +0.8%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Sonic Automotive, Inc. Market vs Earnings Trajectory
Loading price and EPS data...
Sonic Automotive, Inc. Fair Value Envelope
Sonic Automotive, Inc. Profit Bridge
Profitability Analysis
Gross Margin
Thin margins leave little room for error. Cost management and pricing strategy are critical.
Operating Margin
Minimal operating profit suggests high operating costs or pricing challenges. Scalability is concerning.
Net Profit Margin
Minimal profitability after all expenses. Limited financial flexibility for reinvestment or shareholder returns.
Effective Tax Rate
Higher tax burden may reflect limited tax optimization or operations in high-tax jurisdictions.
Profitability Insight
Efficient profit conversion: Minimal margin compression from gross to net indicates lean operations and favorable tax/interest environment.
Sonic Automotive, Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Excellent cash generation. The company converts earnings to cash at or above 100%, indicating high-quality earnings.
CapEx Intensity
Moderate capital requirements typical of many stable businesses. Healthy balance between reinvestment and cash generation.
FCF Growth Trend
Strong FCF growth demonstrates improving cash generation and business momentum. Positive signal for sustainability.
Working Capital Impact
Working capital inflow boosted cash flow. Efficient management of receivables, inventory, and payables contributing positively.
Cash Flow Quality Insight
Exceptional cash generation: High-quality earnings converting to growing free cash flow. The company demonstrates strong pricing power, efficient operations, and disciplined capital allocation.
Sonic Automotive, Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Acceptable liquidity, but monitor closely. Current assets just barely cover current liabilities.
Debt-to-Equity Ratio
High financial leverage. Heavy reliance on debt may indicate increased financial risk and potential solvency concerns.
Working Capital
Positive working capital, but relatively tight. The company should monitor cash flow carefully.
Asset Composition
Balanced asset mix between current and non-current assets, typical of many stable businesses.
Sonic Automotive, Inc. Street Expectations Map
Wall Street analysts project that SAH stock may see slight declines over the coming 12 months. The consensus 1-year price target stands at 76.50, with estimates ranging from a low of 67.00 to a high of 90.00.
The consensus 1-year price target stands at 76.50, with estimates ranging from a low of 67.00 to a high of 90.00.
Analyst Consensus Analysis
Upside Potential
Downside risk. Current price above analyst targets indicates potential overvaluation. Exercise caution and review catalysts.
Analyst Agreement
Good consensus alignment. Moderate target spread reflects general agreement on value drivers with some variance in assumptions.
Risk-Reward Profile
Unfavorable risk-reward. Downside risk exceeds upside potential. Consider defensive positioning or alternative opportunities.
Analyst Conviction
Bearish or uncertain outlook. Limited upside or poor consensus suggests challenges ahead or fundamental concerns.
Market Sentiment Insight
Monitor and evaluate: Current analyst consensus suggests limited conviction or near-term catalysts. Stay informed on company developments and reassess positioning as new information emerges.
Sonic Automotive, Inc. Insider Positioning
During the last 12 months, insiders have purchased $5.99M and sold $810K worth of SAH shares, resulting in $5.18M of net buying activity.
3 Months
0
0.00
9.5K
809.71K
-810K
-$810K
3-6 Months
100.0K
5.99M
0
0.00
+6.0M
+$5.99M
6-9 Months
0
0.00
0
0.00
+0
+$0
9-12 Months
0
0.00
0
0.00
+0
+$0
Top Buyers
Rusnak Paul P.
10 Percent Owner
$5.99M
Top Sellers
Byrd Heath
Officer: Evp And Cfo
$810K
Insider Activity Analysis
Net Insider Sentiment
Strong bullish signal with $5.18M net buying. Insiders are aggressively accumulating shares, suggesting significant confidence in future prospects.
Buy/Sell Ratio
Exceptional buy/sell ratio. Buying dramatically outweighs selling—one of the strongest possible insider signals.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchases—may warrant investigation into company developments.
Insider Participation
1 insider buyers and 1 sellers. Equal participation suggests mixed or neutral insider views.
sah Dividend History
Learning Layer
Related Guides
Build conviction on SAH by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.