AutoNation Inc

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AN : NYSE : Services
$48.53 | %
Today's Range: 47.70 - 48.72
Avg. Daily Volume: 1,073,500
09/23/16 - 4:00 PM ET

Financial Analysis


AUTONATION INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. AUTONATION INC has very weak liquidity. Currently, the Quick Ratio is 0.16 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 decreased by 5.56% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)5441.45224.3
EBITDA ($mil)256.6250.4
EBIT ($mil)220.7218.3
Net Income ($mil)112.0115.1


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)54.765.3
Total Assets ($mil)9788.38839.4
Total Debt ($mil)6510.95450.0
Equity ($mil)2158.22285.3


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin15.4715.68
EBITDA Margin4.714.79
Operating Margin4.064.18
Sales Turnover2.172.28
Return on Assets4.335.08
Return on Equity19.6919.71
Debt Q2 FY16 Q2 FY15
Current Ratio0.840.97
Debt/Capital0.750.7
Interest Expense48.035.8
Interest Coverage4.66.1


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)102.15113.36
Div / share0.00.0
EPS1.081.0
Book value / share21.1320.16
Institutional Own % n/a n/a
Avg Daily Volume1090344.01442851.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 21.96 for the Specialty Retail industry and a significant discount compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 2.29 indicates a discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 12.35. 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, AUTONATION 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
AN 12.38 Peers 21.96   AN 10.33 Peers 14.09

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

AN 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.

AN 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
AN 10.36 Peers 19.56   AN 1.40 Peers 1.91

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

AN 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.

AN 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
AN 2.29 Peers 12.35   AN 0.25 Peers 0.78

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.

AN is trading at a significant discount to its peers.

 

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

However, AN is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AN 0.23 Peers 1.48   AN 5.61 Peers 7.28

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.

AN 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.

AN trails its peers on the basis of sales growth

 

 

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