Sonic Automotive (NYSE:SAH) Trading Down 8% - Here's Why

Key Points

• Sonic Automotive shares fell about 8% to roughly $92, despite quarterly revenue of $3.93 billion and adjusted EPS of $1.82 both exceeding analyst expectations.
• Profitability remains a concern: EPS declined from $2.19 a year earlier, while a 0.72% net margin reflected pressure from higher dealership costs.
• Analyst sentiment is mixed, with Needham upgrading the stock to “Buy” and raising its target to $139, but the overall consensus remains “Hold” with an average price target of $96.11.

Shares of Sonic Automotive, Inc. (NYSE:SAH - Get Free Report) were down 8% during mid-day trading on Friday . The company traded as low as $91.96 and last traded at $92.28. 30,431 shares changed hands during mid-day trading, a decline of 89% from the average session volume of 276,958 shares. The stock had previously closed at $100.34.

Sonic Automotive News Roundup

Here are the key news stories impacting Sonic Automotive this week:

• Positive Sentiment: Needham & Company raised its price target on Sonic Automotive from $90 to $139 and upgraded the stock to “Buy,” implying significant upside from recent levels. Benzinga
• Positive Sentiment: Second-quarter revenue rose 7.6% year over year to approximately $3.93 billion, exceeding the $3.78 billion analyst estimate. Adjusted earnings of $1.82 per share also beat expectations of $1.75, while total gross profit reached a quarterly record of $616.2 million. Sonic Automotive Reports Second Quarter 2026 Financial Results
• Neutral Sentiment: Sonic Automotive declared a quarterly dividend of $0.41 per share, payable October 15 to shareholders of record on September 15. The dividend represents an annualized yield of approximately 1.6%, offering some shareholder-return support but likely having limited near-term impact on the stock.
• Negative Sentiment: Quarterly EPS declined from $2.19 in the prior-year period to $1.82, and reported net margin was only 0.72%. Coverage indicates that higher dealership costs undermined profitability, tempering the market’s reaction to the revenue and earnings beats. Sonic Automotive shares turn negative as profitability undermined by dealership costs

Wall Street Analyst Weigh In

A number of brokerages have recently commented on SAH. Weiss Ratings raised Sonic Automotive from a "hold (c)" rating to a "hold (c+)" rating in a research report on Thursday, July 23rd. UBS Group lifted their price target on shares of Sonic Automotive from $90.00 to $109.00 and gave the stock a "buy" rating in a research note on Friday, July 10th. Seaport Research Partners downgraded shares of Sonic Automotive from a "buy" rating to a "neutral" rating and lifted their price target for the stock from $185.00 to $205.00 in a research note on Friday, July 17th. Morgan Stanley set a $72.00 price target on shares of Sonic Automotive in a report on Thursday, May 7th. Finally, JPMorgan Chase & Co. dropped their price objective on shares of Sonic Automotive from $77.00 to $76.00 and set an "underweight" rating on the stock in a research report on Monday, July 13th. Five equities research analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average price target of $96.11.

Sonic Automotive Trading Down 9.2%

The company has a market cap of $2.88 billion, a price-to-earnings ratio of 28.97, a PEG ratio of 1.72 and a beta of 0.89. The company has a quick ratio of 0.29, a current ratio of 1.03 and a debt-to-equity ratio of 1.93. The business's fifty day simple moving average is $88.28 and its two-hundred day simple moving average is $73.83.

Sonic Automotive (NYSE:SAH - Get Free Report) last issued its earnings results on Thursday, July 30th. The company reported $1.82 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.75 by $0.07. The business had revenue of $3.93 billion during the quarter, compared to analysts' expectations of $3.78 billion. Sonic Automotive had a net margin of 0.72% and a return on equity of 22.45%. The company's revenue for the quarter was up 7.6% on a year-over-year basis. During the same quarter in the prior year, the business posted $2.19 EPS. On average, equities analysts predict that Sonic Automotive, Inc. will post 6.93 EPS for the current year.

Sonic Automotive Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, October 15th. Investors of record on Tuesday, September 15th will be given a $0.41 dividend. The ex-dividend date of this dividend is Tuesday, September 15th. This represents a $1.64 dividend on an annualized basis and a yield of 1.8%. Sonic Automotive's payout ratio is 52.23%.

Insider Transactions at Sonic Automotive

In other Sonic Automotive news, President Jeff Dyke sold 50,000 shares of the firm's stock in a transaction dated Monday, June 8th. The stock was sold at an average price of $82.97, for a total transaction of $4,148,500.00. Following the transaction, the president owned 111,622 shares of the company's stock, valued at approximately $9,261,277.34. This trade represents a 30.94% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 100,000 shares of company stock valued at $8,408,160 in the last three months. Corporate insiders own 43.68% of the company's stock.

Institutional Trading of Sonic Automotive

Several institutional investors and hedge funds have recently made changes to their positions in SAH. Dimensional Fund Advisors LP grew its stake in Sonic Automotive by 3.8% during the 1st quarter. Dimensional Fund Advisors LP now owns 1,313,857 shares of the company's stock worth $90,088,000 after buying an additional 48,599 shares during the last quarter. State Street Corp lifted its stake in Sonic Automotive by 9.8% in the fourth quarter. State Street Corp now owns 701,133 shares of the company's stock valued at $43,623,000 after buying an additional 62,426 shares during the last quarter. Invesco Ltd. boosted its holdings in shares of Sonic Automotive by 11.9% in the fourth quarter. Invesco Ltd. now owns 510,963 shares of the company's stock valued at $31,608,000 after acquiring an additional 54,455 shares during the period. Millennium Management LLC grew its position in shares of Sonic Automotive by 20.5% during the third quarter. Millennium Management LLC now owns 383,117 shares of the company's stock worth $29,151,000 after acquiring an additional 65,266 shares during the last quarter. Finally, Geode Capital Management LLC grew its position in shares of Sonic Automotive by 1.2% during the fourth quarter. Geode Capital Management LLC now owns 375,034 shares of the company's stock worth $23,204,000 after acquiring an additional 4,443 shares during the last quarter. 46.92% of the stock is owned by hedge funds and other institutional investors.

About Sonic Automotive

Sonic Automotive, Inc is a publicly traded automotive retailer that operates a network of franchised new-car dealerships and used-vehicle dealerships across the United States. Headquartered in Charlotte, North Carolina, the company offers a range of services that include vehicle sales, leasing, finance and insurance products, service and parts, and collision repair. Sonic Automotive's dealerships represent numerous major automotive brands, and the company also markets a broad selection of pre-owned vehicles under its own banner.

In addition to its core dealership operations, Sonic Automotive has developed digital retail capabilities that allow customers to research, shop and complete transactions online.

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