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Here's How Much You'd Have If You Invested $1000 in AutoNation a Decade Ago
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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in AutoNation (AN - Free Report) ten years ago? It may not have been easy to hold on to AN for all that time, but if you did, how much would your investment be worth today?
AutoNation's Business In-Depth
With that in mind, let's take a look at AutoNation's main business drivers.
Incorporated in Delaware in 1991, AutoNation, Inc. is the largest automotive retailer in the United States. Apart from retailing new and used vehicles, the company offers vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products, and other aftermarket products. In addition, it arranges financing for vehicle purchases through third-party sources.
As of Dec 31, 2022, AutoNation owned and operated over 247 new vehicle franchises from 247 stores located in the United States. As of 2022 end, the company owned 55 AutoNation-branded collision centers, 13 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers and an auto finance company.
The core brands of new vehicles that the firm sells accounted for around 89% of the new vehicles that AutoNation sold in 2021. The core brands offered by the company are — Toyota, Ford, Honda, General Motors, FCA US, Mercedes-Benz, Nissan, BMW and Volkswagen.
AutoNation’s business is divided into three operating segments — Domestic (accounted for about 39.5% of the company’s revenues in 2022), Import (28.5%) and Premium Luxury (38%).
The Domestic segment includes stores that sell vehicles manufactured by General Motors, Ford and Fiat Chrysler; whereas the Import segment comprises stores that sell vehicles manufactured by Toyota, Honda, Nissan, Hyundai and others.
The Premium Luxury segment includes stores that sell vehicles manufactured by Daimler (Mercedes Benz division), BMW, Toyota (Lexus division), Audi and others. Its diversified set of automotive retail franchises supports the automotive retailer’s business, which is sensitive to macroeconomic conditions.
In 2022, new vehicle sales generated 43.5% of revenues, used vehicle sales accounted for 35.8%, parts and services (also referred as “customer care”) added 15.2%, finance & insurance (also referred to as “customer financial services”) constituted 5.3%, and other revenues accounted for 0.1%. In terms of gross profit, the largest contributor was parts and services with 36%, followed by finance and insurance with 27.3%, new vehicle with 26%, and used-vehicle with 10.5%.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in AutoNation ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in July 2013 would be worth $3,873.04, or a 287.30% gain, as of July 14, 2023, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
The S&P 500 rose 168.42% and the price of gold increased 46.63% over the same time frame in comparison.
Going forward, analysts are expecting more upside for AN.
AutoNation's diversified product mix and multiple streams of income reduce risk profile and augur well for earnings and sales growth. Enhanced digital solutions have helped AutoNation to further boost profitability and market presence. Buyouts of Priority 1 Automotive and Peacock Automotive’s 11 dealerships are boosting AutoNation’s growth prospects. Robust share repurchase program and digitization efforts are commendable. However, affordability challenges may weigh on the demand for new vehicles, thus limiting its near-term prospects. While the company’s store expansion plans are likely to boost long term growth, it may strain the near-term financials of the firm. Rising debt levels and stiff competition also play spoilsport. As such, investors are advised to wait for a better entry point.
Over the past four weeks, shares have rallied 17.60%, and there have been 1 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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Here's How Much You'd Have If You Invested $1000 in AutoNation a Decade Ago
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in AutoNation (AN - Free Report) ten years ago? It may not have been easy to hold on to AN for all that time, but if you did, how much would your investment be worth today?
AutoNation's Business In-Depth
With that in mind, let's take a look at AutoNation's main business drivers.
Incorporated in Delaware in 1991, AutoNation, Inc. is the largest automotive retailer in the United States. Apart from retailing new and used vehicles, the company offers vehicle maintenance and repair services, vehicle parts, extended service contracts, vehicle protection products, and other aftermarket products. In addition, it arranges financing for vehicle purchases through third-party sources.
As of Dec 31, 2022, AutoNation owned and operated over 247 new vehicle franchises from 247 stores located in the United States. As of 2022 end, the company owned 55 AutoNation-branded collision centers, 13 AutoNation USA used vehicle stores, 4 AutoNation-branded automotive auction operations, 3 parts distribution centers and an auto finance company.
The core brands of new vehicles that the firm sells accounted for around 89% of the new vehicles that AutoNation sold in 2021. The core brands offered by the company are — Toyota, Ford, Honda, General Motors, FCA US, Mercedes-Benz, Nissan, BMW and Volkswagen.
AutoNation’s business is divided into three operating segments — Domestic (accounted for about 39.5% of the company’s revenues in 2022), Import (28.5%) and Premium Luxury (38%).
The Domestic segment includes stores that sell vehicles manufactured by General Motors, Ford and Fiat Chrysler; whereas the Import segment comprises stores that sell vehicles manufactured by Toyota, Honda, Nissan, Hyundai and others.
The Premium Luxury segment includes stores that sell vehicles manufactured by Daimler (Mercedes Benz division), BMW, Toyota (Lexus division), Audi and others. Its diversified set of automotive retail franchises supports the automotive retailer’s business, which is sensitive to macroeconomic conditions.
In 2022, new vehicle sales generated 43.5% of revenues, used vehicle sales accounted for 35.8%, parts and services (also referred as “customer care”) added 15.2%, finance & insurance (also referred to as “customer financial services”) constituted 5.3%, and other revenues accounted for 0.1%. In terms of gross profit, the largest contributor was parts and services with 36%, followed by finance and insurance with 27.3%, new vehicle with 26%, and used-vehicle with 10.5%.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in AutoNation ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in July 2013 would be worth $3,873.04, or a 287.30% gain, as of July 14, 2023, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
The S&P 500 rose 168.42% and the price of gold increased 46.63% over the same time frame in comparison.
Going forward, analysts are expecting more upside for AN.
AutoNation's diversified product mix and multiple streams of income reduce risk profile and augur well for earnings and sales growth. Enhanced digital solutions have helped AutoNation to further boost profitability and market presence. Buyouts of Priority 1 Automotive and Peacock Automotive’s 11 dealerships are boosting AutoNation’s growth prospects. Robust share repurchase program and digitization efforts are commendable. However, affordability challenges may weigh on the demand for new vehicles, thus limiting its near-term prospects. While the company’s store expansion plans are likely to boost long term growth, it may strain the near-term financials of the firm. Rising debt levels and stiff competition also play spoilsport. As such, investors are advised to wait for a better entry point.
Over the past four weeks, shares have rallied 17.60%, and there have been 1 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.