Company Overview
Asbury Automotive Group, Inc. functions as a significant automotive retailer within the United States, operating through its Dealerships and Total Care Auto, Powered by Asbury (TCA) segments to provide a comprehensive array of new and used vehicles alongside related services. The company operates within the Consumer Cyclical sector, specifically the Auto & Truck Dealerships industry, a classification that defines its sensitivity to economic cycles and consumer discretionary spending patterns. Asbury maintains a substantial market capitalization of $3.67B and generates annual revenue of $18.00B, supported by a workforce of 15,000 employees. These valuation and revenue figures indicate that the company commands a prominent position in the retail automotive landscape, reflecting the scale required to compete effectively in a high-volume, fragmented industry where operational efficiency and brand partnerships are critical for survival.
Financial Health
The company reported a trailing twelve-month revenue of $18.00B, accompanied by a net income of $492.00M and an EBITDA of $1.08B. The substantial gap between the $18.00B revenue and the $492.00M net income reveals a cost structure with significant operating expenses, including cost of goods sold and overhead costs, which are typical for the capital-intensive nature of auto dealership operations. Free cash flow stands at $87.83M, a metric that highlights the company's ability to generate cash after capital expenditures, though the absolute figure suggests a need for careful management of working capital to maintain financial flexibility. The company reports a gross margin of 17.1%, an operating margin of 5.2%, and a profit margin of 2.7%, indicating that while the business generates healthy revenue, the path from gross profit to net income involves substantial operational leverage and expense absorption. On the balance sheet, Asbury holds $51.30M in cash against $6.10B in total debt, resulting in a debt-to-equity ratio of 156.82%, which characterizes a highly leveraged balance sheet typical of the industry but requiring steady cash flows to service obligations. The current ratio is recorded at 0.95, indicating that current liabilities slightly exceed current assets, suggesting a need for efficient liquidity management to meet short-term obligations without relying heavily on external financing. Return on Equity is 13.3% while Return on Assets is 5.7%, metrics that collectively demonstrate the management's effectiveness in generating returns relative to the equity invested and the total asset base utilized.
Valuation Assessment
Asbury Automotive Group, Inc. currently trades with a P/E Ratio (TTM) of 7.52 and a Forward P/E of 6.39, where the lower forward multiple implies that the market expects earnings to increase or current earnings are suppressed relative to future expectations. The price-to-book ratio is 0.93, indicating that the market values the company at a slight discount to its book value, which often reflects the illiquid nature of automotive inventory and the risks associated with high leverage in this sector. Alternative valuation metrics such as a price-to-sales ratio of 0.20 and an EV/EBITDA of 8.94 provide additional context, suggesting the company is valued on a transaction basis that accounts for its significant debt load and revenue scale. The stock's recent trading range spans a 52-week high of $274.50 and a 52-week low of $185.23, placing the current price in a compressed range relative to its historical volatility. The beta of 0.77 indicates that the stock's price volatility is lower than the broader market, suggesting that Asbury moves less aggressively than the S&P 500 during periods of market fluctuation.
Growth & Income
Revenue growth over the trailing twelve months stands at 3.8%, while earnings growth year-over-year is -52.4%, indicating that earnings are contracting significantly faster than revenue, which points to margin compression or one-time cost pressures affecting profitability. The company does not pay a dividend, evidenced by a dividend yield of N/A and a payout ratio of 0.0%, meaning the company retains all earnings rather than distributing them to shareholders. This retention strategy suggests that management prioritizes reinvesting capital into operations, debt reduction, or strategic acquisitions over providing immediate income to investors. Consequently, the overall growth and income profile is defined by moderate revenue expansion coupled with a significant decline in earnings and a complete absence of dividend income, requiring investors to rely solely on capital appreciation for total return.