Value
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.0 |
| P/S | 10.0 |
| EV/EBITDA | 5.5 |
| Fwd P/E | 9.6 |
| PEG | 8.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 7.7x
- ▸PEG: 0.68
- ▸Attractively valued
AN · Why this verdict
Why AutoNation (AN) 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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus EPS estimates in each of the last four quarters, including a 16% positive surprise in the oldest of those quarters and a 4% beat most recently, suggesting a pattern of conservative guidance relative to actual results. Earnings | EPS surprise stays positive for at least two more consecutive quarters, with the average beat remaining above 3%. | →Stable |
| CounterDeclining revenue of roughly -2% year over year signals that volume headwinds are real; earnings beats driven by cost management or share buybacks rather than top-line growth are fragile and may not persist. | ||
Business quality falls below the minimum acceptable threshold, with a Piotroski F-Score of 3 out of 9 and no identifiable competitive moat. Free cash flow covers only 80% of reported net income, indicating some earnings quality concern. Quality breakdown | The Piotroski score improves above 5 and the free-cash-flow-to-net-income ratio rises above 90% within four quarters. | →Stable |
| CounterA recovering momentum profile with MACD improving and volume accumulation suggests the market may be re-rating the stock before fundamental quality metrics visibly improve, leaving patient sellers at a disadvantage. | ||
Core brands account for roughly 89% of the business mix, creating meaningful supplier concentration. Any disruption to that brand relationship — pricing pressure, inventory allocation, or policy changes — would flow directly through to revenue. Bear case | If concentration risk materializes, same-brand revenue declines more than 10% year over year in any single quarter. | →Stable |
| CounterHigh concentration in core brands also means the company has deep expertise and preferred-dealer status in those lines, which can be a competitive advantage in sourcing inventory during constrained supply periods. | ||
At a forward multiple of 8x and PEG of 0.71, the shares screen attractively priced relative to peers, offering roughly 26% upside to consensus price targets. This valuation cushion provides downside support even against a soft operating backdrop. Valuation breakdown | Analyst consensus price target narrows toward current price as the discount closes, with the stock trading above $211 within 12 months. | →Stable |
| CounterCheap multiples in auto retail often reflect structural pressure on unit volumes and margins; a low multiple alone does not catalyze re-rating without evidence of improving fundamentals. | ||
The company has beaten consensus EPS estimates in each of the last four quarters, including a 16% positive surprise in the oldest of those quarters and a 4% beat most recently, suggesting a pattern of conservative guidance relative to actual results.
→StableEarnings
- Expectation
- EPS surprise stays positive for at least two more consecutive quarters, with the average beat remaining above 3%.
CounterDeclining revenue of roughly -2% year over year signals that volume headwinds are real; earnings beats driven by cost management or share buybacks rather than top-line growth are fragile and may not persist.
Business quality falls below the minimum acceptable threshold, with a Piotroski F-Score of 3 out of 9 and no identifiable competitive moat. Free cash flow covers only 80% of reported net income, indicating some earnings quality concern.
→StableQuality breakdown
- Expectation
- The Piotroski score improves above 5 and the free-cash-flow-to-net-income ratio rises above 90% within four quarters.
CounterA recovering momentum profile with MACD improving and volume accumulation suggests the market may be re-rating the stock before fundamental quality metrics visibly improve, leaving patient sellers at a disadvantage.
Core brands account for roughly 89% of the business mix, creating meaningful supplier concentration. Any disruption to that brand relationship — pricing pressure, inventory allocation, or policy changes — would flow directly through to revenue.
→StableBear case
- Expectation
- If concentration risk materializes, same-brand revenue declines more than 10% year over year in any single quarter.
CounterHigh concentration in core brands also means the company has deep expertise and preferred-dealer status in those lines, which can be a competitive advantage in sourcing inventory during constrained supply periods.
At a forward multiple of 8x and PEG of 0.71, the shares screen attractively priced relative to peers, offering roughly 26% upside to consensus price targets. This valuation cushion provides downside support even against a soft operating backdrop.
→StableValuation breakdown
- Expectation
- Analyst consensus price target narrows toward current price as the discount closes, with the stock trading above $211 within 12 months.
CounterCheap multiples in auto retail often reflect structural pressure on unit volumes and margins; a low multiple alone does not catalyze re-rating without evidence of improving fundamentals.
TrendMatrix Research · core thesis
Engine thesis — one sentence
AutoNation trades at a forward earnings multiple of 8x with a PEG below 1 and has delivered four consecutive quarters of earnings beats, but business quality falls short of the minimum acceptable threshold and heavy put options activity signals elevated near-term risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 9.8 |
| ROA | 3.9 |
| Gross margin | 0.0 |
| Op margin | 1.9 |
| Net margin | 1.2 |
| Current ratio | 3.3 |
| FCF quality | 6.0 |
| Moat | 4.2 |
| Piotroski F | 3.3 |
- ▸Excellent ROE: 29%
- ▸Earnings quality warning: 80% FCF/NI
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
Growth
5.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
| EPS growth | 8.3 |
- ▸Declining revenue: -2%
Momentum
1.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 1.3 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -1.7%/30d — confirmed downtrend
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 8.6 |
| erm sentiment | 5.4 |
- ▸Analyst upside: 30%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Insider selling (low materiality) — $512,262 (0.008% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.7 |
| quality rank | 5.8 |
| growth rank | 1.7 |
- ▸Attractive P/E vs peers
Technical
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.7 |
| support resistance | 7.2 |
| 52w position | 6.3 |
Risk (lower is worse)
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.6 |
| days to cover | 3.6 |
| volatility | 5.6 |
| put call | 5.2 |
| implied vol | 5.7 |
| beta | 8.5 |
| debt equity | 0.3 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.7 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- ASYMMETRY:2.4>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:28d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:1.6<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.39
Upside
+13.3%
Downside
5.6%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeCatalyst-Driven — Earnings in 28d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 8.2 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:1.6<4.5.
The strongest dimensions are Value at 8.2, Sentiment at 7.1, and Technical at 7.1; the weakest are Momentum at 1.6, Quality at 3.7, and Risk (lower is worse) at 4.8. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 2.39 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Value Below Peer Average
Trip ifAnalyst consensus price target falls below $180, widening the discount rather than closing it.
- P2Consistent Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Brand Concentration Supplier Risk
Trip ifRevenue from core brands declines more than 10% year over year in any single reported quarter.
- P4Weak Quality Floor Breach
Trip ifPiotroski F-Score rises above 5 and free-cash-flow-to-net-income ratio exceeds 90% for 2 consecutive quarters.