Value
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.5 |
| P/S | 10.0 |
| EV/EBITDA | 6.6 |
| Fwd P/E | 9.7 |
| PEG | 9.6 |
| Analyst target | 4.0 |
- ▸Forward P/E: 6.9x
- ▸PEG: 0.57
- ▸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.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock trades at 6.7 times forward earnings with a PEG ratio of 0.57, making it attractively valued against both its own history and sector peers; this multiple compression creates a potential re-rating opportunity if earnings stabilize. Valuation breakdown | Stock price advances toward the $202 price target as the valuation discount narrows over the next 12 months. | →Stable |
| CounterA low multiple in a thin-margin, no-moat auto dealership may simply reflect structural earnings risk; with revenue declining 1% and quality metrics below the minimum threshold, the discount may persist or widen rather than close. | ||
Business quality metrics remain below the minimum acceptable threshold — no competitive moat and thin margins — leaving the earnings base exposed to cyclical downturns without a quality buffer to absorb them. Warnings | Quality metrics recover above the minimum threshold of 4.0 for 2 consecutive quarters, removing the floor violation. | →Stable |
| CounterAt 6.7 times forward earnings, the market has already priced in significant quality concerns; even modest stabilization in margins could trigger a re-rating without requiring a fundamental business transformation. | ||
The stock trades below its 200-day moving average with the long-term average sloping down at -2.8% per month, a configuration the technical data characterizes as a confirmed downtrend; price is unlikely to sustain an advance until the long-term trend stabilizes. Momentum breakdown | Stock price reclaims and holds above the 200-day moving average, confirming a trend reversal over the next 2 quarters. | →Stable |
| CounterMACD is improving and volume accumulation is rising, suggesting buyers are stepping in at current levels; if these shorter-term signals prove durable, the recovery may be closer than the long-term average implies. | ||
A recent officer departure and appointment has been flagged in a regulatory filing; at a cyclically sensitive consumer business where operational execution matters, management transitions introduce near-term uncertainty around strategy and continuity. Gates warning | Two consecutive quarters of positive EPS surprises following the transition confirm management execution has remained intact. | →Stable |
| CounterC-suite changes do not inherently impair results; if incoming leadership brings fresh operational discipline, the change may prove a net positive rather than a headwind. | ||
The stock trades at 6.7 times forward earnings with a PEG ratio of 0.57, making it attractively valued against both its own history and sector peers; this multiple compression creates a potential re-rating opportunity if earnings stabilize.
→StableValuation breakdown
- Expectation
- Stock price advances toward the $202 price target as the valuation discount narrows over the next 12 months.
CounterA low multiple in a thin-margin, no-moat auto dealership may simply reflect structural earnings risk; with revenue declining 1% and quality metrics below the minimum threshold, the discount may persist or widen rather than close.
Business quality metrics remain below the minimum acceptable threshold — no competitive moat and thin margins — leaving the earnings base exposed to cyclical downturns without a quality buffer to absorb them.
→StableWarnings
- Expectation
- Quality metrics recover above the minimum threshold of 4.0 for 2 consecutive quarters, removing the floor violation.
CounterAt 6.7 times forward earnings, the market has already priced in significant quality concerns; even modest stabilization in margins could trigger a re-rating without requiring a fundamental business transformation.
The stock trades below its 200-day moving average with the long-term average sloping down at -2.8% per month, a configuration the technical data characterizes as a confirmed downtrend; price is unlikely to sustain an advance until the long-term trend stabilizes.
→StableMomentum breakdown
- Expectation
- Stock price reclaims and holds above the 200-day moving average, confirming a trend reversal over the next 2 quarters.
CounterMACD is improving and volume accumulation is rising, suggesting buyers are stepping in at current levels; if these shorter-term signals prove durable, the recovery may be closer than the long-term average implies.
A recent officer departure and appointment has been flagged in a regulatory filing; at a cyclically sensitive consumer business where operational execution matters, management transitions introduce near-term uncertainty around strategy and continuity.
→StableGates warning
- Expectation
- Two consecutive quarters of positive EPS surprises following the transition confirm management execution has remained intact.
CounterC-suite changes do not inherently impair results; if incoming leadership brings fresh operational discipline, the change may prove a net positive rather than a headwind.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Asbury Automotive trades at a compelling 6.7 times forward earnings with a PEG below 1, but the thesis is constrained by a confirmed price downtrend, quality metrics below the minimum acceptable threshold, and a recent C-suite transition that adds execution uncertainty at a cyclically sensitive juncture.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.8 |
| ROA | 3.7 |
| Gross margin | 0.0 |
| Op margin | 1.9 |
| Net margin | 1.5 |
| Current ratio | 3.8 |
| FCF quality | 6.5 |
| Moat | 3.6 |
| Piotroski F | 4.4 |
- ▸No competitive moat
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.3 |
| EPS growth | 10.0 |
- ▸Declining revenue: -1%
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 4.9 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -3.2%/30d — confirmed downtrend
Sentiment
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.9 |
| erm sentiment | 4.6 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider buying — $28,623 (0.001% of mkt cap)
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.3 |
| quality rank | 5.6 |
| growth rank | 3.3 |
- ▸Attractive P/E vs peers
Technical
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.5 |
| support resistance | 1.3 |
| 52w position | 5.0 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.6 |
| days to cover | 5.4 |
| volatility | 4.5 |
| put call | 5.6 |
| implied vol | 3.9 |
| beta | 8.6 |
| debt equity | 4.2 |
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 3.6 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:5.3>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:25d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.2=NEGATIVE
Warning (3)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
- DEATH_CROSS:momentum=5.3>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.19
Upside
-1.6%
Downside
8.7%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 56
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.8B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 8.1 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.2=NEGATIVE.
The strongest dimensions are Value at 8.1, Growth at 6.2, and Sentiment at 5.5; the weakest are Technical at 2.6, Quality at 3.4, and Insider at 5.0. The V9 engine flagged 1 failed gate with 3 warnings, producing an asymmetric reward-to-risk of -0.19 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value At Low Pe
Trip ifForward P/E expands above 10x, eliminating the valuation discount that underpins the thesis.
- P2Confirmed Long Term Downtrend
Trip ifStock price breaks above $210 and sustains above it for 2 consecutive weeks, crossing above the max pain level and reversing the downtrend signal.
- P3Quality Below Acceptable Floor
Trip ifQuality score recovers above 4.0 for 2 consecutive quarters, clearing the minimum acceptable threshold.
- P4C Suite Change Execution Risk
Trip ifEPS surprise exceeds 5% for 2 consecutive quarters following the management change, demonstrating execution continuity.