Asbury Automotive Group Inc

Asbury Automotive Group maintains a leveraged capital structure with a debt-to-equity ratio of 0.78 and a current ratio of 0.94, indicating that current liabilities exceed current assets. The company holds $3.07 billion in long-term debt against $3.93 billion in total equity. Operating cash flow for the quarter was $223.2 million, which was partially offset by $147.0 million in treasury stock repurchases and net financing outflows of $550.7 million. The firm generated $361.5 million in proceeds from dealership divestitures, supporting its liquidity position despite a negative net cash position after subtracting total debt.

Profitability metrics show a return on equity of 12.51% and a return on assets of 4.35%. The company reported net income of $187.8 million on revenue of $4.11 billion, resulting in a net margin of approximately 4.56%. Gross profit was $726.9 million, with operating income of $193.9 million. The valuation snapshot indicates a price-to-earnings ratio of 7.71 and an EV/EBITDA of 7.27, suggesting the market prices the stock at a discount relative to historical norms for the sector.

Revenue is diversified across four main segments: new vehicle sales ($2.10 billion), used vehicle sales ($1.21 billion), parts and service ($626.8 million), and finance and insurance ($179.0 million). New vehicles account for approximately 51% of total revenue, while used vehicles contribute 29%. Parts and service, a higher-margin segment, represents 15% of revenue. The company’s geographic diversity helps limit exposure to regional economic downturns, although specific regional breakdowns are not detailed in the provided data.

Growth trajectory shows a slight decline in total revenue from $4.15 billion in Q1 2025 to $4.11 billion in Q1 2026. However, net income increased significantly from $132.1 million to $187.8 million, driven by a $125.8 million gain on dealership divestitures compared to $4.1 million in the prior year. Excluding this gain, operating income decreased from $234.3 million to $193.9 million, reflecting higher selling, general, and administrative expenses of $510.4 million versus $456.4 million in the prior year.

Risk factors include high liquidity risk due to current liabilities exceeding current assets and medium dilution risk. The company faces potential disruptions in vehicle supply, changes in trade policy, and competition in the automotive industry. Additionally, the company is transitioning its dealer management systems from CDK to Tekion, which poses operational risks. The company also notes the impact of macroeconomic conditions, including consumer confidence and credit availability, on its business.

Recent events include an 8-K filing with material items related to Item 2.02, indicating a results of operations or financial condition disclosure. Analyst estimates show a mean price target of $240.42, with a median of $225.00, suggesting upside potential from the current market price of $199.55. The mean recommendation is 2.58, indicating a neutral to slightly positive sentiment among analysts.

Asbury Automotive Group Inc (ABG) has entered the analysis scope for the first time, establishing a baseline for future monitoring. As noted in the material changes summary, there is no prior basis for delta computation, meaning this report serves as the initial snapshot of the company's current standing rather than a comparison against previous periods. The most significant activity detected involves a major modification in holder data for investor ID 587. Two conflicting signals were recorded regarding this investor's position as of March 31, 2026. One signal, detected on June 25, 2026, indicates a reduction in shares from 3,970 to 35, representing a drop in portfolio weight from approximately 0.00045% to 0.000004%. Conversely, a separate signal detected on June 21, 2026, suggests an increase from 35 shares to 3,970 shares for the same period. These discrepancies highlight a data inconsistency in the reporting of investor ID 587's holdings, with the share count oscillating between a negligible position of 35 shares (valued at roughly $6,839) and a larger position of 3,970 shares (valued at approximately $775,778). The severity of these changes is classified as major, underscoring the importance of resolving the conflicting data points to accurately assess institutional interest. Currently, Asbury Automotive Group is tracked with 30 top holders, though specific officer, analyst, and index membership counts are listed as zero in the company profile. Until the conflicting holder data is reconciled, the precise impact of investor ID 587's activity on the broader shareholder base remains unclear, necessitating further verification of the filing data associated with the March 31, 2026 period.

Analysts project 20.5% upside to a mean price target of $240.42, suggesting significant undervaluation relative to the current market price.

Revenue grew at a 7.8% compound annual rate from FY2023 to FY2025, showing consistent top-line expansion over the period.

Cash conversion ratio of 1.58 exceeds the 1.32 cohort median, highlighting robust ability to convert earnings into cash.

The company faces high liquidity risk and a current ratio of 0.95, indicating potential difficulty meeting short-term obligations.

Debt-to-equity ratio of 0.78 is well above the 0.29 cohort median, reflecting higher financial leverage than peers.

Net income fell 12.5% year-over-year in FY2025, continuing a trend of declining profitability despite revenue growth.

Medium dilution risk exists, potentially reducing per-share value for existing shareholders through equity issuance.

Revenue $4.11B; Operating income $193.9M.

• ▍Revenue $4.11B
• ▍Operating income $193.9M
• ▍Net margin 4.6%

Revenue $13.32B; Operating income $734.3M.

• ▍Revenue $13.32B
• ▍Operating income $734.3M
• ▍Net margin 3.2%

Revenue $8.52B; Operating income $491.7M.

• ▍Revenue $8.52B
• ▍Operating income $491.7M
• ▍Net margin 3.3%

Revenue $18.00B; Operating income $860.6M.

• ▍Revenue $18.00B
• ▍Operating income $860.6M
• ▍Net margin 2.7%

Revenue $17.19B; Operating income $835.6M.

• ▍Revenue $17.19B
• ▍Operating income $835.6M
• ▍Net margin 2.5%

Revenue $17.19B; Operating income $835.6M.

• ▍Revenue $17.19B
• ▍Operating income $835.6M
• ▍Net margin 2.5%

Revenue $14.80B; Operating income $953.5M.

• ▍Revenue $14.80B
• ▍Operating income $953.5M
• ▍Net margin 4.1%

Revenue $14.80B; Operating income $953.5M.

• ▍Revenue $14.80B
• ▍Operating income $953.5M
• ▍Net margin 4.1%