Value
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.4 |
| P/S | 10.0 |
| EV/EBITDA | 6.2 |
| Fwd P/E | 9.7 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 7.4x
- ▸PEG: 0.49
- ▸Attractively valued
ABG · Why this verdict
Why Asbury Automotive Group (ABG) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Asbury Automotive is a cheap auto dealer (forward P/E 7.1x) but with a quality score of 1.3, declining revenue, a 0/9 Piotroski score and price above the analyst target, leaving little to support the stock beyond valuation.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Quality is 1.3 against a 4.0 floor, with a 0/9 Piotroski F-Score, no competitive moat and thin margins (operating margin component 1.9, net margin 1.3). Quality breakdown | Quality score should rise above 4.0 as margins stabilize over the next 12 months. | →Stable |
| CounterDealerships operate on structurally thin margins, so a low margin score reflects the industry rather than company-specific distress. | ||
Revenue is declining 8% and the growth score is only 0.2/10, with growth rank last among peers. Growth breakdown | Revenue growth should return above 0% YoY within 12 months. | ↓Deteriorating |
| CounterUsed and new vehicle demand cycles can turn quickly, and a cyclical dealer's revenue can rebound with volumes. | ||
The stock is attractively valued at a forward P/E of 7.1x and PEG of 0.49, ranking well on P/E versus peers. Valuation breakdown | Forward P/E should stay below 10x as earnings recover. | ↓Deteriorating |
| CounterA low multiple on declining earnings is a classic value-trap pattern, and earnings may fall further. | ||
Price of $198.03 is above the analyst target of $194.64 (upside_pct -1.7%), leaving negative reward-to-risk of -0.11. Warnings | Analysts should raise targets, or price should consolidate toward the target. | ↓Deteriorating |
| CounterThe gap is small and a recent analyst upgrade in the news may lead to higher targets. | ||
The latest quarter missed ($6.16 versus $6.42 expected), earnings history scores 1.1/10, and short interest is 13% with implied volatility of 154%. Catalyst breakdown | EPS should beat estimates in the next two quarters. | ↓Deteriorating |
| CounterThe prior quarter beat by 8.13%, so misses may be isolated rather than a trend. | ||
Quality is 1.3 against a 4.0 floor, with a 0/9 Piotroski F-Score, no competitive moat and thin margins (operating margin component 1.9, net margin 1.3).
→StableQuality breakdown
- Expectation
- Quality score should rise above 4.0 as margins stabilize over the next 12 months.
CounterDealerships operate on structurally thin margins, so a low margin score reflects the industry rather than company-specific distress.
Revenue is declining 8% and the growth score is only 0.2/10, with growth rank last among peers.
↓DeterioratingGrowth breakdown
- Expectation
- Revenue growth should return above 0% YoY within 12 months.
CounterUsed and new vehicle demand cycles can turn quickly, and a cyclical dealer's revenue can rebound with volumes.
The stock is attractively valued at a forward P/E of 7.1x and PEG of 0.49, ranking well on P/E versus peers.
↓DeterioratingValuation breakdown
- Expectation
- Forward P/E should stay below 10x as earnings recover.
CounterA low multiple on declining earnings is a classic value-trap pattern, and earnings may fall further.
Price of $198.03 is above the analyst target of $194.64 (upside_pct -1.7%), leaving negative reward-to-risk of -0.11.
↓DeterioratingWarnings
- Expectation
- Analysts should raise targets, or price should consolidate toward the target.
CounterThe gap is small and a recent analyst upgrade in the news may lead to higher targets.
The latest quarter missed ($6.16 versus $6.42 expected), earnings history scores 1.1/10, and short interest is 13% with implied volatility of 154%.
↓DeterioratingCatalyst breakdown
- Expectation
- EPS should beat estimates in the next two quarters.
CounterThe prior quarter beat by 8.13%, so misses may be isolated rather than a trend.
Per-dimension breakdown
Quality
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.9 |
| ROA | 3.1 |
| Gross margin | 0.0 |
| Op margin | 1.9 |
| Net margin | 1.3 |
| Current ratio | 3.6 |
| FCF quality | 9.1 |
| Moat | 3.1 |
| Piotroski F | 3.3 |
- ▸Excellent cash conversion: 123% FCF/NI
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
Growth
0.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.5 |
| EPS growth | 0.0 |
- ▸Declining revenue: -8%
Momentum
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.8 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 1.6 |
- ▸Overbought bear rally (RSI 73)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -4.5%/30d — confirmed downtrend
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 7.0 |
| Price target | 6.9 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.3 |
| quality rank | 3.7 |
| growth rank | 0.0 |
- ▸Attractive P/E vs peers
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.5 |
| support resistance | 2.2 |
| 52w position | 5.3 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.7 |
| days to cover | 6.2 |
| volatility | 0.5 |
| put call | 10.0 |
| implied vol | 4.9 |
| beta | 8.5 |
| debt equity | 4.3 |
| news risk | 5.5 |
Catalyst
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 1.1 |
| earnings timing | 5.0 |
| surprise avg | 2.5 |
| news activity | 8.0 |
- ▸Earnings concerns: 1B/2M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:6.1>=5.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.60
- EARNINGS_PROXIMITY:90d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (2)
- DEATH_CROSS:momentum=6.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.11
Upside
-1.6%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 73
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.7B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.1=NEGATIVE outcome against Value at 8.2 and asymmetric R:R of -0.11.
The strongest dimensions are Value at 8.2, Sentiment at 6.3, and Momentum at 6.1; the weakest are Growth at 0.2, Technical at 3.0, and Quality at 3.3. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.11 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Weak Quality No Moat
Trip ifQuality score rises above 4.0 from current 1.3.
- P2Declining Revenue Weak Growth
Trip ifRevenue decline exceeds 12% YoY from current -8%.
- P3Cheap Valuation
Trip ifForward P/E exceeds 12x from current 7.1x.
- P4Price Above Analyst Target
Trip ifPrice falls more than 7% below the current $198.03, crossing the $184.17 stop level.
- P5Mixed Earnings And Short Interest
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.