Penske Automotive Group, Inc. (PAG) stock analysis

P/E above its 5-year median

Penske Automotive's P/E of 15.6 is above its own 5-year median of 9.7.

P/E above the industry

Penske Automotive's P/E of 15.6 is above the Retail-auto dealers & gasoline stations median of 12.5.

EV/EBITDA above its 5-year median

Penske Automotive's EV/EBITDA of 13.6 is above its 5-year median of 8.7.

P/B above the industry

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

Trading above fair value

The share price of $214.23 is above our fair value estimate of $145.78.

Margin of safety under 20%

The price is 47.0% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 4.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -8.7% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -9.7% over the last twelve months, against a 5-year average of 11.5% a year.

Growing slower than the industry

Revenue grew 1.4% 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 16.0% over the last twelve months, against 16.5% a year earlier.

Return on equity over 15%

Return on equity was 15.5% over the last twelve months and averaged 25.4% over five years.

Return on capital over 10%

Return on invested capital was 11.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Penske Automotive's return on equity of 15.5% is above the Retail-auto dealers & gasoline stations median of 12.4%.

Earnings grew over 5 years

Net income grew 11.5% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 2.8% over the last twelve months, against a 5-year average of 3.8%.

Net margin above the industry

Penske Automotive's net margin of 2.8% is above the Retail-auto dealers & gasoline stations median of 2.6%.

Low debt

Debt is 39.8% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 51.2% five years ago to 39.8%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 33.8% of total debt.

Interest coverage

Interest expense is not reported separately.

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

Current assets are 0.98 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.12; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Penske Automotive paid dividends worth 2.6% of the share price over the last twelve months.

Yield below Treasuries

The 2.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Penske Automotive yields 2.6%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 41.3% of net income.

Covered by free cash flow

Dividends take 74.7% of free cash flow.