AutoNation (NYSE:AN) Stock Jumps 7.6% on Earnings Beat

Key Points

• AutoNation shares jumped 7.6% after the company reported quarterly earnings of $5.11 per share, topping estimates of $5.08, while revenue of $7.01 billion also exceeded forecasts.
• Revenue declined 0.4% year over year, although profitability remained solid with a 31.24% return on equity and a 2.82% net margin.
• Analyst sentiment remains mixed: the stock has an average “Hold” rating and a consensus price target of $230, while institutional investors own 94.62% of shares.

AutoNation, Inc. (NYSE:AN - Get Free Report)'s stock price shot up 7.6% on Friday following a stronger than expected earnings report. The company traded as high as $192.99 and last traded at $182.2820. Approximately 245,717 shares traded hands during mid-day trading, a decline of 46% from the average session volume of 453,402 shares. The stock had previously closed at $169.34.

The company reported $5.11 earnings per share for the quarter, beating the consensus estimate of $5.08 by $0.03. The company had revenue of $7.01 billion during the quarter, compared to the consensus estimate of $6.93 billion. AutoNation had a return on equity of 31.24% and a net margin of 2.82%. The company's revenue was down .4% on a year-over-year basis. During the same period last year, the firm earned $5.01 earnings per share.

Analysts Set New Price Targets

A number of research firms recently weighed in on AN. Weiss Ratings cut AutoNation from a "buy (b-)" rating to a "hold (c+)" rating in a report on Monday, September 21st. Stephens increased their target price on AutoNation from $220.00 to $232.00 and gave the company an "equal weight" rating in a research note on Monday, August 10th. Northcoast Research raised AutoNation from a "neutral" rating to a "buy" rating and set a $240.00 price target for the company in a research note on Tuesday, July 14th. JPMorgan Chase & Co. cut their price target on shares of AutoNation from $210.00 to $185.00 and set an "overweight" rating on the stock in a research report on Tuesday, October 6th. Finally, Argus boosted their price objective on shares of AutoNation from $241.00 to $246.00 and gave the company a "buy" rating in a report on Tuesday, August 11th. Eight investment analysts have rated the stock with a Buy rating, three have assigned a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat.com, the company currently has an average rating of "Hold" and a consensus price target of $230.00.

Insider Buying and Selling

In other news, Director Lisa Lutoff-Perlo sold 900 shares of the stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $220.00, for a total value of $198,000.00. Following the completion of the transaction, the director directly owned 7,989 shares in the company, valued at approximately $1,757,580. This represents a 10.12% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. 1.40% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in AN. Redwood Investment Management LLC boosted its stake in shares of AutoNation by 1.1% during the 1st quarter. Redwood Investment Management LLC now owns 5,372 shares of the company's stock worth $1,049,000 after acquiring an additional 61 shares during the last quarter. Davis Capital Management lifted its position in AutoNation by 0.7% during the third quarter. Davis Capital Management now owns 9,712 shares of the company's stock valued at $1,529,000 after purchasing an additional 68 shares in the last quarter. Evergreen Capital Management LLC grew its holdings in AutoNation by 4.5% during the third quarter. Evergreen Capital Management LLC now owns 1,620 shares of the company's stock valued at $255,000 after purchasing an additional 70 shares during the period. Bessemer Group Inc. increased its position in AutoNation by 33.0% in the first quarter. Bessemer Group Inc. now owns 306 shares of the company's stock worth $59,000 after buying an additional 76 shares in the last quarter. Finally, Parkside Financial Bank & Trust raised its stake in shares of AutoNation by 73.9% in the second quarter. Parkside Financial Bank & Trust now owns 193 shares of the company's stock worth $36,000 after buying an additional 82 shares during the period. 94.62% of the stock is owned by institutional investors.

AutoNation Trading Up 7.2%

The stock has a 50-day moving average price of $177.25 and a two-hundred day moving average price of $193.90. The stock has a market capitalization of $6.00 billion, a PE ratio of 8.42, a PEG ratio of 0.81 and a beta of 0.81. The company has a debt-to-equity ratio of 2.68, a quick ratio of 0.18 and a current ratio of 0.78.

AutoNation Company Profile

AutoNation, Inc is a U.S.-based automotive retailer that sells new and used vehicles through a network of dealerships and online sales channels. The company represents a range of domestic, import and luxury automotive brands, offering passenger cars, trucks and sport utility vehicles.

In addition to vehicle sales, AutoNation provides automotive maintenance and repair, parts, collision-repair services, vehicle protection products and financing options. Its retail operations include traditional dealerships as well as AutoNation USA locations, which focus primarily on used vehicles and related services.

Founded in 1996 as Republic Industries, the company adopted the AutoNation name as it developed its automotive retail business.

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