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Sonic Automotive Inc
SAH : NYSE : Services
$27.22 | %
Today's Range: 26.68 - 27.34
Avg. Daily Volume: 343,400
12/19/14 - 4:01 PM ET

Financial Analysis


SONIC AUTOMOTIVE INC's gross profit margin for the third quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. SONIC AUTOMOTIVE INC has very weak liquidity. Currently, the Quick Ratio is 0.19 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 11.96% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY14 Q3 FY13
Net Sales ($mil)2355.612242.2
EBITDA ($mil)70.0971.5
EBIT ($mil)55.8657.76
Net Income ($mil)24.7123.33


Balance Sheet Q3 FY14 Q3 FY13
Cash & Equiv. ($mil)1.668.99
Total Assets ($mil)2983.912895.93
Total Debt ($mil)1876.851890.63
Equity ($mil)653.57583.73


Profitability Q3 FY14 Q3 FY13
Gross Profit Margin14.514.54
EBITDA Margin2.973.18
Operating Margin2.372.58
Sales Turnover3.073.01
Return on Assets3.322.89
Return on Equity15.4714.37
Debt Q3 FY14 Q3 FY13
Current Ratio1.131.08
Debt/Capital0.740.76
Interest Expense17.819.58
Interest Coverage3.142.95


Share Data Q3 FY14 Q3 FY13
Shares outstanding (mil)51.4752.78
Div / share0.030.03
EPS0.470.46
Book value / share12.711.06
Institutional Own % n/a n/a
Avg Daily Volume342550.0320248.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 26.69 for the Specialty Retail industry and a discount compared to the S&P 500 average of 19.74. To use another comparison, its price-to-book ratio of 2.09 indicates a discount versus the S&P 500 average of 2.73 and a significant discount versus the industry average of 7.70. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, SONIC AUTOMOTIVE INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
SAH 13.90 Peers 26.69   SAH 13.29 Peers 20.29

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

SAH is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

SAH is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
SAH 12.58 Peers 21.76   SAH 0.72 Peers 2.32

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

SAH is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

SAH trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
SAH 2.09 Peers 7.70   SAH 23.22 Peers 1.53

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

SAH is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

SAH is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
SAH 0.15 Peers 1.47   SAH 5.09 Peers 7.76

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

SAH is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

SAH significantly trails its peers on the basis of sales growth

 

 

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