Value
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.3 |
| P/S | 10.0 |
| EV/EBITDA | 5.0 |
| Fwd P/E | 9.6 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 7.6x
- ▸PEG: 0.50
- ▸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. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
AutoNation trades at a cheap 7.6x forward P/E with a perfect four-quarter earnings beat streak, but quality is below the floor (Piotroski 2/9, no moat), revenue is flat, upside to the analyst target is only 6.4% and the stock is bouncing within a confirmed downtrend.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
AutoNation earns a 30% return on equity, but has no competitive moat, a weak 2/9 Piotroski F-Score and a cash conversion warning of 67% FCF to net income, leaving quality at 3.5/10. Quality breakdown | Cash conversion and financial-health scores should improve toward the quality floor of 4.0. | →Stable |
| CounterThe high ROE is partly the result of leverage and buybacks that shrink equity, so it overstates underlying business quality. | ||
The stock trades at a forward P/E of 7.6x with a PEG of 0.50, an attractively valued multiple with a value score of 8.4/10. Valuation breakdown | Earnings should hold so the multiple stays below 10x or re-rates modestly higher. | ↓Deteriorating |
| CounterRevenue growth is flat (about -0%) and the growth score is only 1.2/10, so the low multiple may reflect a cyclical dealership peak. | ||
Core brands account for 89.0% of the supplier base, so a manufacturer supply or incentive change would hit results disproportionately. Bear case | Brand mix should stay stable without supply disruption. | →Stable |
| CounterFranchise dealerships typically depend on a few manufacturers by design, and the relationships are contractual and long-standing. | ||
AutoNation has beaten EPS estimates in each of the last 4 quarters, by an average of 2.1%. Earnings track record | The beat pattern should continue at the February 12, 2027 report. | ↑Improving |
| CounterBeats of only 2% are small and may not be enough to offset flat revenue. | ||
The rally is an overbought bear rally with RSI at 73 within a confirmed downtrend, as the price is below a 200-day average falling 3.7% per 30 days, although volume is accumulating. Momentum breakdown | The 200-day slope should flatten and the price should hold gains on rising volume. | ↓Deteriorating |
| CounterA recovering death cross with an improving MACD and a 2.1x volume surge on the up move could mean the downtrend is ending. | ||
AutoNation earns a 30% return on equity, but has no competitive moat, a weak 2/9 Piotroski F-Score and a cash conversion warning of 67% FCF to net income, leaving quality at 3.5/10.
→StableQuality breakdown
- Expectation
- Cash conversion and financial-health scores should improve toward the quality floor of 4.0.
CounterThe high ROE is partly the result of leverage and buybacks that shrink equity, so it overstates underlying business quality.
The stock trades at a forward P/E of 7.6x with a PEG of 0.50, an attractively valued multiple with a value score of 8.4/10.
↓DeterioratingValuation breakdown
- Expectation
- Earnings should hold so the multiple stays below 10x or re-rates modestly higher.
CounterRevenue growth is flat (about -0%) and the growth score is only 1.2/10, so the low multiple may reflect a cyclical dealership peak.
Core brands account for 89.0% of the supplier base, so a manufacturer supply or incentive change would hit results disproportionately.
→StableBear case
- Expectation
- Brand mix should stay stable without supply disruption.
CounterFranchise dealerships typically depend on a few manufacturers by design, and the relationships are contractual and long-standing.
AutoNation has beaten EPS estimates in each of the last 4 quarters, by an average of 2.1%.
↑ImprovingEarnings track record
- Expectation
- The beat pattern should continue at the February 12, 2027 report.
CounterBeats of only 2% are small and may not be enough to offset flat revenue.
The rally is an overbought bear rally with RSI at 73 within a confirmed downtrend, as the price is below a 200-day average falling 3.7% per 30 days, although volume is accumulating.
↓DeterioratingMomentum breakdown
- Expectation
- The 200-day slope should flatten and the price should hold gains on rising volume.
CounterA recovering death cross with an improving MACD and a 2.1x volume surge on the up move could mean the downtrend is ending.
Per-dimension breakdown
Quality
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 3.5 |
| Gross margin | 0.0 |
| Op margin | 1.7 |
| Net margin | 1.3 |
| Current ratio | 3.1 |
| FCF quality | 5.2 |
| Moat | 4.2 |
| Piotroski F | 2.2 |
- ▸Excellent ROE: 30%
- ▸Earnings quality warning: 67% FCF/NI
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 2/9
Growth
1.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.4 |
| EPS growth | 0.0 |
- ▸Declining revenue: -0%
Momentum
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -3.6%/30d — confirmed downtrend
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.7 |
| Analyst rating | 7.1 |
| Price target | 7.2 |
Insider
4.8/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.6 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.2 |
| quality rank | 6.3 |
| growth rank | 1.3 |
- ▸Superior ROE vs peers
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 2.1 |
| 52w position | 5.6 |
| gap | 5.0 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.8 |
| days to cover | 6.1 |
| volatility | 1.4 |
| put call | 9.6 |
| implied vol | 6.0 |
| beta | 8.1 |
| debt equity | 0.0 |
| news risk | 6.0 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.5 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- MOMENTUM:5.8>=5.5
- INSIDER:OK
- EARNINGS_PROXIMITY:99d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (2)
- DEATH_CROSS:momentum=5.8>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.05
Upside
+0.7%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 69
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's 0.1<1.5@spot outcome against Value at 8.2 and asymmetric R:R of 0.05.
The strongest dimensions are Value at 8.2, Catalyst at 6.3, and Sentiment at 6.0; the weakest are Growth at 1.2, Technical at 3.2, and Quality at 3.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.05 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Forward Valuation
Trip ifForward P/E exceeds 11x from the current 7.6x.
- P2Weak Quality No Moat
Trip ifFCF-to-net-income conversion falls below 50% from the current 67%.
- P3Core Brand Concentration
Trip ifCore brand share exceeds 95% from the current 89%.
- P4Earnings Beat Streak
Trip ifEPS surprise falls below 0% on the February 12, 2027 report.
- P5Bear Rally In Downtrend
Trip ifThe 200-day moving average 30-day slope rises above 0% from the current -3.7%.