Taking on analysts’ expectations and winning: AutoNation Inc. (AN)

AutoNation Inc. (NYSE: AN) stock jumped 2.16% on Tuesday to $136.98 against a previous-day closing price of $134.09. With 0.53 million shares changed hands, the volume of the stock remained lighter than its average volume of 0.67 million shares. During the session, the Auto & Truck Dealerships company that operates in wider Consumer Cyclical sector, reached to the highest price of $139.18 whereas the lowest price it dropped to was $133.73. The 52-week range on AN shows that it touched its highest point at $158.30 and its lowest point at $94.92 during that stretch. It currently has a 1-year price target of $162.75. Beta for the stock currently stands at 1.09.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AN was up-trending over the past week, with a rise of 4.48%, but this was up by 3.22% over a month. Three-month performance dropped to -4.78% while six-month performance rose 14.44%. The stock gained 26.38% in the past year, while it has gained 27.66% so far this year. A look at the trailing 12-month EPS for AN yields 24.60 with Next year EPS estimates of 20.91. For the next quarter, that number is 5.78. This implies an EPS growth rate of 32.70% for this year and -6.85% for next year. EPS is expected to grow by 24.70% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 43.60%.

Float and Shares Shorts:

At present, 47.20 million AN shares are outstanding with a float of 40.13 million shares on hand for trading. On Apr 27, 2023, short shares totaled 5.68 million, which was 12.46% higher than short shares on Mar 30, 2023. In addition to Mr. Michael M. Manley as the firm’s CEO & Director, Mr. Joseph T. Lower serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 99.25% of AN’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 51.63% of AN, in contrast to 38.31% held by mutual funds. Shares owned by individuals account for 34.38%. As the largest shareholder in AN with 8.99% of the stake, The Vanguard Group, Inc. holds 4,098,063 shares worth 4,098,063. A second-largest stockholder of AN, BlackRock Fund Advisors, holds 2,855,677 shares, controlling over 6.26% of the firm’s shares. Dimensional Fund Advisors LP is the third largest shareholder in AN, holding 2,264,224 shares or 4.96% stake. With a 2.55% stake in AN, the Vanguard Total Stock Market ETF is the largest stakeholder. A total of 1,161,751 shares are owned by the mutual fund manager. The iShares Core S&P Mid Cap ETF, which owns about 2.34% of AN stock, is the second-largest Mutual Fund holder. It holds 1,067,366 shares valued at 140.57 million. Vanguard Small Cap Index Fund holds 2.15% of the stake in AN, owning 981,824 shares worth 129.31 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, AN reported revenue of $6.87B and operating income of $558.10M. The EBITDA in the recently reported quarter was $593.20M and diluted EPS was $6.48.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AN since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With AN analysts setting a high price target of $225.00 and a low target of $96.00, the average target price over the next 12 months is $159.67. Based on these targets, AN could surge 64.26% to reach the target high and fall by -29.92% to reach the target low. Reaching the average price target will result in a growth of 16.56% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded AN stock several times over the past three months with 33 Buys and 24 Sells. In these transactions, 106,493 shares were bought while 224,097 shares were sold. The number of buy transactions has increased to 50 while that of sell transactions has risen to 104 over the past year. The total number of shares bought during that period was 222,195 while 3,412,977 shares were sold.

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