Sonic Automotive Intrinsic Value Calculation – Amalgamated Bank Trims Position in Sonic Automotive by 9.5% in Q1
August 12, 2023
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Sonic Automotive ($NYSE:SAH), Inc. is an automotive retailer in the United States. The company offers a range of services, including new and used vehicle sales, automotive finance and insurance products, and automotive repair and maintenance services. While the exact amount of the reduction was not disclosed, it appears that Amalgamated Bank sold off a significant portion of its holdings in Sonic Automotive during the quarter. The company’s stock has fallen significantly since the start of the pandemic, and it is unclear when it will see a return to pre-pandemic levels.
In addition, Sonic Automotive has had to temporarily close some of its locations due to safety concerns related to the virus. Despite the reduction in stake by Amalgamated Bank, Sonic Automotive remains one of the largest automotive retailers in the United States. It is one of the few companies that can benefit from an economic recovery fueled by increased consumer spending. As the pandemic continues to subside and people begin to feel more comfortable venturing out and shopping, Sonic Automotive may see a resurgence in sales. With its wide network of stores and services, the company is well positioned to capitalize on any uptick in demand.
Analysis – Sonic Automotive Intrinsic Value Calculation
At GoodWhale, we conducted an analysis of SONIC AUTOMOTIVE‘s wellbeing. After careful consideration of the company’s financials and other data, our proprietary Valuation Line determined that the fair value of SONIC AUTOMOTIVE share is around $60.7. However, currently, SONIC AUTOMOTIVE stock is traded at $48.7, which represents a fair price that is undervalued by 19.8%. This gap in price offers an interesting opportunity for investors who are looking for value in the stock market. As a result, we suggest that investors take a closer look at SONIC AUTOMOTIVE and consider adding the company to their portfolio. With the right timing and investment strategy, investors can benefit from the stock’s potential upside without overextending their risk. More…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Sonic Automotive. More…
| Total Revenues | Net Income | Net Margin |
| 14.18k | -32.5 | 1.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Sonic Automotive. More…
| Operations | Investing | Financing |
| 119.6 | -299.7 | -176.6 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Sonic Automotive. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 5.15k | 4.29k | 24.13 |
Key Ratios Snapshot
Some of the financial key ratios for Sonic Automotive are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 12.8% | 27.4% | 1.3% |
| FCF Margin | ROE | ROA |
| -0.6% | 13.7% | 2.3% |
Peers
The company operates in a highly competitive industry with several large competitors, including Asbury Automotive Group Inc, Lithia Motors Inc, Penske Automotive Group Inc. Sonic Automotive Inc has a strong market position and is well-positioned to compete effectively against its rivals.
– Asbury Automotive Group Inc ($NYSE:ABG)
Asbury Automotive Group Inc is a large publicly traded company that operates in the automotive retailing industry. The company has a market capitalization of 3.9 billion as of 2022 and a return on equity of 31.39%. Asbury Automotive Group Inc is one of the largest automotive retailers in the United States and operates over 100 dealerships across the country. The company sells and services a variety of new and used vehicles, and also provides financing and insurance products to its customers.
– Lithia Motors Inc ($NYSE:LAD)
Lithia Motors Inc is an American automotive retailer. It is the ninth largest automotive retailer in the United States and is publicly traded on the New York Stock Exchange. The company operates through three segments: Domestic, Import, and Luxury. Lithia also has a minority investment in an electric vehicle (EV) company.
Lithia’s market cap is 6.48B as of 2022. The company has a Return on Equity of 26.55%. Lithia Motors Inc is an American automotive retailer. It is the ninth largest automotive retailer in the United States and is publicly traded on the New York Stock Exchange. The company operates through three segments: Domestic, Import, and Luxury. Lithia also has a minority investment in an electric vehicle (EV) company.
– Penske Automotive Group Inc ($NYSE:PAG)
Penske Automotive Group is an American multinational automotive retailing company headquartered in Bloomfield Hills, Michigan. As of early 2021, it operated over 3,300 automotive dealerships and 250 collision repair centers in the United States and United Kingdom. Penske Automotive Group is a Fortune 500 company with revenue of $19.6 billion as of 2020. The company was founded in 1927 by Roger Penske and is currently led by CEO Jose Munoz.
Summary
Amalgamated Bank, a major shareholder of the company, trimmed its position in Sonic Automotive by 9.5%. This suggests that investors are cautious about the company’s performance and outlook. Analysts predict that the company will need to make significant improvements in its sales and operations in order to turn around its fortunes. Investors should be mindful of Sonic Automotive’s share price trend and other factors before investing in the company.
