AutoNation, Inc. (AN) Buy or Sell Stock Guide

Last updated: Sep 23, '17

The analysis below may be helpful to you if you have any of the following questions about AN stock:

  • Is AN a buy or a sell?
  • Should I sell or hold AN stock today?
  • Is AN a good buy / a good investment?
  • What are AN analyst opinions, recommendations, ratings?

Here are AN stock buy reasons/signals:

1. AutoNation's massive size provides some appealing economies of scale, illustrated by strong operating margins.

2. AutoNation has been expanding its auto repair and used-vehicle operations, which carry higher margins and are less cyclical than new-car sales.

3. AutoNation Express could make the AutoNation shopping experience far more attractive to consumers than shopping at most other dealers. AutoNation USA adds to the upside potential.

Here are AN stock sell reasons/signals:

1. About 57% of revenue is derived from new-car sales, leaving AutoNation vulnerable to the fluctuations of a viciously cyclical industry. This risk is greater for AutoNation as it gets a much larger share of its sales from California and Florida than the national average. These markets had been hit worse by the housing downturn.

2. Even the lucrative parts business cannot wholly offset severe declines in new- and used-vehicle revenue.

3. Start-up costs for AutoNation USA will compress margins for some time.

4. AN quarterly revenue growth was -3.00%, lower than the industry and sector average revenue growth (4.62% and 3.59%, respectively).

5. AN profitability is declining. The YoY profit margin change was -0.13pp.

6. AN average analyst price target ($43.14) is below its current price ($47.38).

7. AN short share of float is 17.36%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

8. AN short interest (days to cover the shorts) ratio is 8.43. The stock garners more short interest than the average industry, sector or S&P 500 stock.

What are your thoughts on AN?

If you liked this analysis, check out Buy or Sell Stock Guides for other stocks.

Comments (0)expand_more