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1. Company Snapshot

1.a. Company Description

Sonic Automotive, Inc.operates as an automotive retailer in the United States.It operates in two segments, Franchised Dealerships and EchoPark.


The Franchised Dealerships segment is involved in the sale of new and used cars and light trucks, and replacement parts; provision of vehicle maintenance, manufacturer warranty repair, and paint and collision repair services; and arrangement of extended warranties, service contracts, financing, insurance, and other aftermarket products for its guests.The EchoPark segment sells used cars and light trucks; and arranges finance and insurance product sales for its guests in pre-owned vehicle specialty retail locations.As of December 31, 2021, the company operated 140 new vehicle franchises representing 28 brands of cars and light trucks; 17 collision repair centers in 17 states; and 46 EchoPark stores in 16 states, including 11 Northwest Motorsport pre-owned vehicle stores.


Sonic Automotive, Inc.was incorporated in 1997 and is based in Charlotte, North Carolina.

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1.b. Last Insights on SAH

Sonic Automotive's recent performance was driven by its strong portfolio, geographical footprint, and Net 300 Initiative, which offer momentum to weather affordability concerns. The company's Franchised Dealerships segment showed slight revenue contraction but higher same-store retail new vehicle sales. Additionally, Sonic Automotive's management expects market normalization and better pricing post-2025 for its EchoPark segment. The company also hiked its payout, which is a positive event for shareholders.

1.c. Company Highlights

2. Sonic Automotive's Q3 2025 Earnings: A Mixed Bag

Sonic Automotive reported a strong financial performance in Q3 2025, with consolidated total revenues reaching an all-time quarterly record of $4 billion, up 14% year-over-year. The company's GAAP EPS was $1.33 per share, while adjusted EPS was $1.41 per share, a 12% increase year-over-year. However, the actual EPS came in below estimates of $1.82. The Franchised Dealerships segment generated an all-time record quarterly franchise revenue of $3.4 billion, up 17% year-over-year and 11% on a same-store basis.

Publication Date: Oct -28

📋 Highlights
  • Record Revenues:: Consolidated total revenues reached $4 billion, up 14% YoY, with Franchised Dealerships hitting $3.4 billion, a 17% YoY increase.
  • Adjusted EPS Growth:: Adjusted EPS rose to $1.41, a 12% YoY increase, driven by strong fixed operations and F&I gross profit growth.
  • Fixed Operations & F&I Records:: Fixed operations gross profit hit a record high, up 8% YoY, while F&I gross profit surged 13% YoY on a same-store basis.
  • Powersports Performance:: Powersports revenue reached $84 million, a 42% YoY rise, with gross profit up 32% to $23 million, reflecting modernization benefits.
  • Used Vehicle GPU Recovery:: EchoPark’s used vehicle GPU set a $3,359 per unit record, up 8% YoY, with expected improvement in Q4 due to non-auction inventory strategies.

Segment Performance

The Franchised Dealerships segment saw a 7% increase in same-store new retail volume, a 3% increase in same-store used retail volume, and a 6% increase in same-store fixed operations revenues. The EchoPark segment, on the other hand, saw an 8% year-over-year decrease in adjusted segment income and a 4% year-over-year decrease in revenues, due to a challenging used vehicle market and a reduction in used vehicle GPU. The Powersports segment generated all-time record quarterly revenues of $84 million, up 42% year-over-year.

Operational Highlights

The company's fixed operations gross profit and F&I gross profit set all-time quarterly records, up 8% and 13% year-over-year, respectively, on a same-store basis. The EchoPark segment total GPU set a third-quarter record of $3,359 per unit, up 8% per unit year-over-year. As David Smith noted, "We've begun to see the benefits of our investment in modernizing the Powersports business and remain focused on identifying operational synergies within our current network."

Valuation and Outlook

With a P/E Ratio of 9.46 and an EV/EBITDA of 275.01, the market seems to be pricing in a certain level of growth for Sonic Automotive. Analysts estimate next year's revenue growth at 2.9%. Given the company's current valuation multiples, it remains to be seen whether Sonic Automotive can meet these expectations. The company's ROE of 22.2% and ROIC of 7.28% indicate a relatively healthy profitability profile.

Dividend and Liquidity

Sonic Automotive approved a quarterly cash dividend of $0.38 per share, payable on January 15, 2026, to all stockholders of record on December 15, 2025. The company ended the quarter with $815 million in available liquidity, including $264 million in combined cash and floor plan deposits on hand. This provides a comfortable cushion for future investments and dividend payments.

3. NewsRoom

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Sonic Automotive, Inc. (NYSE:SAH) Receives Consensus Recommendation of “Hold” from Analysts

Nov -15

Source: defenseworld.net

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Securities Investigation: Levi & Korsinsky Investigates Sonic Automotive, Inc. (SAH) on Behalf of Investors

Nov -10

Source: newsfilecorp.com

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SAH Investors Have Opportunity to Join Sonic Automotive, Inc. Fraud Investigation with the Schall Law Firm

Nov -05

Source: globenewswire.com

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SAH Investors Have Opportunity to Join Sonic Automotive, Inc. Fraud Investigation with the Schall Law Firm

Nov -01

Source: businesswire.com

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INVESTOR ALERT: Investigation of Sonic Automotive, Inc. (SAH) Announced by Holzer & Holzer, LLC

Oct -29

Source: globenewswire.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Sonic Automotive, Inc. - SAH

Oct -28

Source: prnewswire.com

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Sonic Automotive Q3 Earnings Miss Expectations, Revenues Rise Y/Y

Oct -24

Source: zacks.com

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Sonic Automotive: Q3 Performance Had Mixed Takeaways (Rating Downgrade)

Oct -24

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.75%)

6. Segments

Franchised Dealerships

Expected Growth: 3.5%

Sonic Automotive's franchised dealerships growth of 3.5% is driven by increasing same-store sales, strategic brand mix, and geographic diversification. Additionally, investments in digital retailing and customer experience enhancements contribute to the growth. Furthermore, the company's focus on high-margin brands, such as luxury and import vehicles, also supports the growth momentum.

EchoPark

Expected Growth: 5.0%

EchoPark's 5.0% growth is driven by its unique business model, which combines online car buying with a nationwide network of delivery centers. Additionally, its focus on used cars, which are in high demand, and its ability to offer competitive pricing due to lower overhead costs, contribute to its growth. Furthermore, EchoPark's data-driven approach to inventory management and its strong brand recognition also support its growth momentum.

Powersports

Expected Growth: 3.0%

Powersports from Sonic Automotive, Inc. achieves 3.0% growth driven by increasing demand for outdoor recreational activities, expanding product offerings, and strategic partnerships. Additionally, the company's focus on e-commerce and digital marketing enhances customer engagement, contributing to sales growth. Furthermore, the rising popularity of electric vehicles and environmentally friendly options also supports the segment's growth.

7. Detailed Products

New Vehicles

Sonic Automotive, Inc. sells new vehicles from various manufacturers such as Chevrolet, Toyota, and Honda, among others.

Used Vehicles

The company offers a wide range of pre-owned vehicles, including certified pre-owned vehicles, at its dealerships.

Parts and Accessories

Sonic Automotive, Inc. sells genuine and aftermarket parts and accessories for various vehicle makes and models.

Service and Repair

The company offers vehicle maintenance and repair services, including routine maintenance, repairs, and warranty work.

Financing and Insurance

Sonic Automotive, Inc. provides financing and insurance options for vehicle purchases, including leasing and financing options.

Collision Repair

The company offers collision repair services, including paintless dent repair and auto body repair.

8. Sonic Automotive, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Sonic Automotive, Inc. faces moderate threat from substitutes, as customers have limited alternatives for purchasing and servicing vehicles.

Bargaining Power Of Customers

Sonic Automotive, Inc. has a large customer base, but individual customers have limited bargaining power due to the company's diversified revenue streams.

Bargaining Power Of Suppliers

Sonic Automotive, Inc. has a moderate level of bargaining power with its suppliers, as it relies on a few large suppliers for vehicles and parts.

Threat Of New Entrants

Sonic Automotive, Inc. operates in a highly competitive industry, but the threat of new entrants is low due to high barriers to entry, such as regulatory requirements and capital expenditures.

Intensity Of Rivalry

Sonic Automotive, Inc. operates in a highly competitive industry, with intense rivalry among dealerships and online platforms, leading to high marketing and advertising expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 79.17%
Debt Cost 6.43%
Equity Weight 20.83%
Equity Cost 12.70%
WACC 7.74%
Leverage 380.02%

11. Quality Control: Sonic Automotive, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Sonic Automotive

A-Score: 5.4/10

Value: 6.2

Growth: 5.1

Quality: 3.4

Yield: 4.0

Momentum: 9.0

Volatility: 4.7

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Quality: 6.6

Yield: 0.0

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Volatility: 7.0

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Yield: 9.0

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Kingsway Financial Services

A-Score: 4.6/10

Value: 4.6

Growth: 4.2

Quality: 3.7

Yield: 0.0

Momentum: 9.5

Volatility: 5.7

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Cars

A-Score: 4.3/10

Value: 7.2

Growth: 5.4

Quality: 6.3

Yield: 0.0

Momentum: 2.5

Volatility: 4.3

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America's Car-Mart

A-Score: 3.6/10

Value: 8.7

Growth: 3.6

Quality: 5.4

Yield: 0.0

Momentum: 1.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

64.07$

Current Price

64.08$

Potential

-0.00%

Expected Cash-Flows