Sonic Automotive, Inc. (SAH, Financial) has announced a strong start to the fiscal year with first-quarter revenue hitting $3.7 billion, surpassing analyst expectations of $3.52 billion. The automotive retailer attributed this success to robust sales in both new and used car segments and achieving record adjusted EBITDA in their EchoPark unit.
CEO David Smith expressed confidence in the company's strategy, emphasizing ongoing execution despite a challenging environment marked by potential tariff impacts on pricing and inventory levels. The company is focused on navigating these challenges to ensure long-term value creation for its shareholders.
CFO Heath Byrd highlighted the company's financial position, noting $430 million in cash and floor plan deposits as of March 31, 2025, with total liquidity reaching approximately $947 million. However, due to looming uncertainties regarding tariffs and their effects on the automotive industry, Sonic Automotive has revised its financial outlook for 2025. Despite these challenges, Byrd remains optimistic about the company's ability to strategically invest and enhance shareholder returns while managing operational impacts.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Sonic Automotive Inc (SAH, Financial) is $74.83 with a high estimate of $93.00 and a low estimate of $60.00. The average target implies an upside of 26.77% from the current price of $59.03. More detailed estimate data can be found on the Sonic Automotive Inc (SAH) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, Sonic Automotive Inc's (SAH, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Sonic Automotive Inc (SAH, Financial) in one year is $59.10, suggesting a upside of 0.12% from the current price of $59.03. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Sonic Automotive Inc (SAH) Summary page.
SAH Key Business Developments
Release Date: February 12, 2025
- GAAP EPS: $1.67 per share.
- Adjusted EPS: $1.51 per share, a 7% decrease year over year.
- Total Revenue: All-time quarterly record, up 9% year over year.
- Consolidated Gross Profit: Increased 6% year over year.
- Consolidated Adjusted EBITDA: Increased 5% year over year.
- Franchise Dealership Revenue: $3.4 billion, up 12% year over year.
- New Retail Volume: Increased 13% year over year.
- Used Retail Volume: Increased 5% year over year.
- Fixed Operations Revenue: Increased 10% year over year.
- New Vehicle Day Supply: Decreased to 46 days from 57 days in the previous quarter.
- Same Store New Vehicle GPU: $3,241.
- Used Inventory Day Supply: 31 days.
- Used GPU: $1,396 per unit on a same store basis.
- FNI GPU: $2,427, up 4% sequentially and year over year.
- Same Store Fixed Operations Gross Profit: Increased 12% year over year.
- Echo Park Adjusted EBITDA: $4.2 million, below guidance.
- Echo Park Revenue: $506 million, down 9% year over year.
- Echo Park Gross Profit: $49 million, up 14% year over year.
- Echo Park Retail Unit Sales Volume: Approximately 16,700 units, down 5% year over year.
- Echo Park Gross Profit Per Unit: $3,004, up $606 year over year.
- Power Sports Revenue: $30.6 million.
- Power Sports Gross Profit: $7.5 million.
- Power Sports Adjusted EBITDA Loss: $1 million.
- Available Liquidity: $862 million, excluding unencumbered real estate.
- Cash and Floor Plan Deposits: $384 million.
- Quarterly Cash Dividend: $0.35 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sonic Automotive Inc (SAH, Financial) achieved all-time record quarterly franchise revenues of $3.4 billion, up 12% year over year.
- The company reported a 13% increase in new retail volume and a 5% increase in used retail volume.
- Echo Park segment achieved profitability on a pre-tax basis in 2024, with adjusted EBITDA of $27.6 million, up from a loss of $83 million in 2023.
- Sonic Automotive Inc (SAH) successfully added 335 net technicians in 2024, exceeding their goal and setting the stage for strong fixed operations growth in 2025.
- The company announced a quarterly cash dividend of $0.35 per share, reflecting confidence in its financial position.
Negative Points
- Adjusted EPS for the fourth quarter was $1.51 per share, a 7% decrease year over year.
- Echo Park's fourth quarter adjusted EBITDA was $4.2 million, below the previous guidance of $7 million to $8 million.
- Used vehicle supply constraints and consumer affordability remain challenges, impacting the used vehicle segment.
- The company experienced a $200 sequential decline in used GPU at Echo Park due to inventory management issues.
- Sonic Automotive Inc (SAH) faces potential headwinds from electric vehicle inventory management, impacting new GPU by approximately $400.
