Sonic Automotive, Inc.

Valuation Analysis

About the Company

Sonic Automotive, Inc., together with its subsidiaries, operates as an automotive retailer in the United States. It operates in three segments: Franchised Dealerships, EchoPark, and Powersports. The Franchised Dealerships segment engages in the sale of new and used cars and light trucks; sale of replacement parts; provision of vehicle maintenance, manufacturer warranty repairs, and paint and collision repair services; and arrangement of third-party financing, extended warranties, service contracts, insurance, and other aftermarket products. The EchoPark segment sells used cars and light trucks; and arranges third-party finance and insurance product sales for its guests in pre-owned vehicle specialty retail locations. The Powersports segment is involved in the sale of new and used powerspor

Sonic Automotive, Inc. Stock at a Glance

Sonic Automotive, Inc. (SAH) is currently trading at $84.61 with a market capitalization of $2.7B. The trailing P/E ratio stands at 26.69x, with a forward P/E of 11.23x. The 52-week range spans from $54.11 to $89.62; the current price is 5.6% below the yearly high. Year-over-year revenue growth stands at +1.0%. The net profit margin stands at 0.72%.

💰 Dividend

Sonic Automotive, Inc. pays an annual dividend of $1.64 per share, representing a yield of 1.94%. The payout ratio stands at 47%.

📊 Analyst Rating

12 analysts rate Sonic Automotive, Inc. (SAH) on consensus: Buy. The average price target is $83.58, implying -1.21% from the current price. Analyst price targets range from $70.00 to $96.00.

Sonic Automotive, Inc.: The Investment Case in Detail

Sonic Automotive, Inc. (SAH) operates in the Consumer Cyclical — specifically Auto & Truck Dealerships — and is headquartered in United States. Below is a structured read of the investment case built directly from the latest fundamentals, valuation multiples, analyst positioning and smart-money flows. Each section translates raw numbers into the investment logic they imply, so you can decide whether the risk/reward fits your portfolio.

The Bear Case

Revenue growth has slowed to just 1%, which is below nominal GDP — the business is no longer outgrowing the broader economy. With a net margin of just 0.72%, the business has little room to absorb cost shocks or pricing pressure — a single bad quarter can swing the company to a loss. The debt-to-equity ratio of 451.31% is elevated, meaning the company relies heavily on creditors — refinancing terms will become more important than operational performance in the next economic downturn.

Valuation in Context

With a PEG ratio of 0.41, the price-to-earnings multiple is actually below the company's growth rate — classic value-meets-growth territory that Peter Lynch would have called a 'GARP' opportunity.

What to Watch Next

• The forward P/E of 11.23x is meaningfully below the trailing 26.69x — analysts expect earnings to step up; the next earnings release is the test.

Investment Thesis: Strengths & Weaknesses

Technical Snapshot

Price trades above both the 50- and 200-day moving averages, with 50d above 200d — a classic bullish setup (golden-cross alignment).

Risk Profile

The data points to relatively defensive market behavior, elevated short interest (25.66%), higher leverage relative to equity.

Trading Data

💵 Dividend Info

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