AN - Embedded Expectations Analysis - 2018 04 04
AutoNation, Inc. (AN:USA) currently trades at historical highs relative to UAFRS-based (Uniform) Earnings, with an 18.9x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about growth, gross profit, and their initiatives.Specifically, management may lack confidence in the sustainability of EPS growth, and may be downplaying concerns about their recently opened AutoNation USA store in Phoenix. Additionally, they may lack confidence in their ability to increase gross profit in their Preowned business, and may be downplaying concerns about AutoNation's parts and accessory initiatives. Finally, they may lack confidence in the sustainability of Customer Care gross profit improvements, and may be exaggerating the extent to which the AutoNation aftermarket collision parts line fills the key demands of their wholesale customers
AutoNation, through its subsidiaries, is an automotive retailer. The company provides a range of automotive products and services, including new vehicles, used vehicles, parts and service, which includes automotive repair and maintenance services as well as wholesale parts and collision businesses, and automotive finance and insurance products, which include vehicle service and other protection products, and the arranging of financing for vehicle purchases through third-party finance sources. The company owns and operates new vehicle franchises from stores located in the United States, in main metropolitan markets in the Sunbelt region. The company has three segments: Domestic, Import, and Premium Luxury.
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