AutoNation, Inc. (AN) stock analysis

P/E above its 5-year median

AutoNation's P/E of 9.0 is above its own 5-year median of 7.7.

P/E below the industry

AutoNation's P/E of 9.0 is below the Retail-auto dealers & gasoline stations median of 12.5.

EV/EBITDA below its 5-year median

AutoNation's EV/EBITDA of 5.1 is below its 5-year median of 5.9.

P/B above the industry

AutoNation's price-to-book of 2.64 is above the Retail-auto dealers & gasoline stations median of 2.37.

Trading below fair value

The share price of $187.21 is below our fair value estimate of $239.43.

Margin of safety over 20%

The price is 21.8% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 0.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -11.1% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 8.9% over the last twelve months, against a 5-year average of 11.2% a year.

Growing slower than the industry

Revenue grew -1.8% over the last twelve months; the Retail-auto dealers & gasoline stations median is 1.5%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin slipping

Gross margin was 17.7% over the last twelve months, against 17.8% a year earlier.

Return on equity over 15%

Return on equity was 30.2% over the last twelve months and averaged 43.2% over five years.

Return on capital over 10%

Return on invested capital was 37.2%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

AutoNation's return on equity of 30.2% is above the Retail-auto dealers & gasoline stations median of 12.4%.

Earnings grew over 5 years

Net income grew 11.2% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 2.6% over the last twelve months, against a 5-year average of 3.8%.

Net margin below the industry

AutoNation's net margin of 2.6% is below the Retail-auto dealers & gasoline stations median of 2.6%.

Low debt

Debt is 24.5% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 65.0% five years ago to 24.5%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 56.0% of total debt.

Interest well covered

Operating income covers interest expense 6.4 times.

Short-term assets don't cover short-term debts

Current assets are 0.77 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.77; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

AutoNation has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.