On May 15, a recent SEC filing unveiled that David B. Smith, Chairman and CEO at Sonic Automotive (NYSE:SAH) made an insider sell.
What Happened: According to a Form 4 filing with the U.S. Securities and Exchange Commission on Wednesday, Smith sold 16,646 shares of Sonic Automotive. The total transaction value is $988,104.
During Thursday’s morning session, Sonic Automotive shares down by 0.0%, currently priced at $59.59.
Get to Know Sonic Automotive Better
Sonic Automotive is one of the largest auto dealership groups in the United States. The company has 108 franchised stores in 18 states, primarily in metropolitan areas in California, Texas, and the Southeast, plus 25 EchoPark used-vehicle stores, 16 collision centers, and 13 powersports locations. The franchise stores derive revenue from new and used vehicles plus parts and collision repair, finance, insurance, and wholesale auctions. Luxury and import dealerships make up about 86% of franchise new-vehicle revenue, while Honda, BMW, Mercedes, and Toyota constitute about 58% of new-vehicle revenue. BMW is the largest brand at about 25%. 2023’s revenue was $14.4 billion, with EchoPark’s portion totaling $2.4 billion. Sonic bought RFJ Auto in December 2021, which added $3.2 billion in sales.
Financial Milestones: Sonic Automotive’s Journey
Revenue Challenges: Sonic Automotive’s revenue growth over 3 months faced difficulties. As of 31 March, 2024, the company experienced a decline of approximately -3.07%. This indicates a decrease in top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Consumer Discretionary sector.
Navigating Financial Profits:
Gross Margin: With a low gross margin of 15.85%, the company exhibits below-average profitability, signaling potential struggles in cost efficiency compared to its industry peers.
Earnings per Share (EPS): Sonic Automotive’s EPS is below the industry average. The company faced challenges with a current EPS of 1.24. This suggests a potential decline in earnings.
Debt Management: Sonic Automotive’s debt-to-equity ratio is below the industry average. With a ratio of 4.29, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be…
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