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TheStreet Open House

Why Sonic Automotive (SAH) Stock Is Moving Higher Today

Stock quotes in this article: SAH, KMX

NEW YORK (TheStreet) -- Shares of Sonic Automotive (SAH) are up 2.18% to $24.84 after the automotive retailer announced that EchoPark is the name of its pre-owned vehicle retail store concept that will compete with CarMax (KMX) .

Operating as a subsidiary of Sonic Automotive, EchoPark will introduce a new specialty pre-owned automotive retail experience that is completely unique to the automotive industry, the company said.

Shares of CarMax are up 1.51% to $51.16.

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TheStreet Ratings team rates SONIC AUTOMOTIVE INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate SONIC AUTOMOTIVE INC (SAH) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, compelling growth in net income and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SAH's revenue growth has slightly outpaced the industry average of 0.3%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 202.7% when compared to the same quarter one year prior, rising from $8.92 million to $26.99 million.
  • Net operating cash flow has significantly increased by 167.29% to $39.38 million when compared to the same quarter last year. In addition, SONIC AUTOMOTIVE INC has also vastly surpassed the industry average cash flow growth rate of -5.57%.
  • SONIC AUTOMOTIVE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, SONIC AUTOMOTIVE INC's EPS of $1.58 remained unchanged from the prior years' EPS of $1.58. This year, the market expects an improvement in earnings ($1.95 versus $1.58).
  • You can view the full analysis from the report here: SAH Ratings Report
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