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olivLaw · US equity research

Sonic Automotive, Inc. SAH

Retail-Auto Dealers & Gasoline Stations · SIC 5500 · Vertical: Retail-Auto Dealers & Gasoline Stations (SIC 5500)

64.05USD+5.55% · 1 dayClose 04 Nov 2026

Sonic Automotive is one of the largest US automotive retailers, earning revenue from new and used vehicle sales, service, financing and insurance, plus a powersports division. In the second quarter of 2026 it reported revenue of 3.9 billion dollars and record quarterly gross profit, even as weaker demand and price competition in new vehicle sales weighed on margins, making its diversified model worth examining.

The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).

At the close of 04 Nov 2026, Sonic Automotive, Inc. (SAH) stock was 64.05 USD (+5.55% on the day), with P/E 10.3 on diluted EPS of 6.22 USD over the last 12 months, dividend yield 0.37%, beta 0.91, 52-week range 58.28–112.66 USD. Latest reported quarter (Q3 2026): revenue of 4.0 bn USD (+0.4% YoY), net income of 41.1 m USD (−12.2% YoY), diluted EPS 1.28 USD.

Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.

Market cap
unavailable
P/E (TTM)
10.3
Diluted EPS TTM 6.22 · TTM to 30 Sept 2026
E/P (TTM)
9.72%
TTM to 30 Sept 2026
Dividend yield
0.37%
DPS 12m 0.24
Beta (2y)
0.91
Volatility (1y) 44%
52-week range
58.28112.66

Price history

Loading chart…

Technical reading

RSI (14)
50.6
neutral
Bollinger (20, 2)
59.60 – 65.03
in the upper half of the band · %B 0.82 · band width 8.7%
SMA 50 / 200
67.01 / 73.22
downtrend (price < SMA50 < SMA200)
MACD (12, 26, 9)
-0.90 / -1.43
MACD above signal

Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).

Performance

CompanyS&P 500vs S&P 500Vertical median
1 month+2.3%−2.0%+4.3 pp—
3 months−26.2%−2.2%−24.1 pp—
6 months−18.9%+4.3%−23.2 pp—
Year to date+3.5%+10.6%−7.0 pp—
1 year+4.3%+10.5%−6.1 pp−5.6%
3 years+20.9%+73.7%−52.7 pp−0.4%
5 years+24.1%+61.7%−37.6 pp—
Max drawdown (1y)
−46.9%
29 Jul 2026 → 29 Sept 2026
Max drawdown (5y)
−46.9%
29 Jul 2026 → 29 Sept 2026
Compound annual growth (5y)
+4.4%
S&P 500 +10.1%

Price returns, dividends excluded.

Quarterly results

Latest quarter: Q3 2026 · 30 Sept 2026

Revenue
4.0 bn USD
+0.4% YoY
Net income
41.1 m USD
−12.2% YoY
Diluted EPS
1.28
−3.8% YoY
net / operating
1.0% / 2.8%

Quarterly margins

Quarterly statements · USD

Fiscal yearQ4 '24Q1 '25Q2 '25Q3 '25Q4 '25Q1 '26Q2 '26Q3 '26
Revenue3.9 bn3.7 bn3.7 bn4.0 bn3.9 bn3.7 bn3.9 bn4.0 bn
Cost of revenue3.3 bn3.1 bn3.1 bn3.4 bn3.3 bn3.1 bn3.3 bn3.4 bn
Gross profit573.9 m566.4 m602.2 m615.5 m598.7 m598.8 m616.2 m617.5 m
SG&A399.6 m380.3 m412.6 m451.6 m433.7 m427.0 m444.6 m466.8 m
Operating income133.5 m145.0 m-23.3 m122.7 m123.2 m132.7 m131.6 m112.4 m
Depreciation & amortisation39.3 m39.7 m40.5 m41.2 m41.8 m38.7 m40.0 m38.3 m
Pre-tax income82.1 m97.4 m-69.1 m71.2 m73.2 m85.1 m80.3 m57.5 m
Income tax23.5 m26.8 m-23.5 m24.4 m-81.9 m24.3 m22.9 m16.4 m
Net income58.6 m70.6 m-45.6 m46.8 m46.9 m60.8 m57.4 m41.1 m
Diluted EPS1.65 ≈2.04-1.341.331.36 ≈1.791.791.28
Operating cash flow87.7 m195.8 m136.8 m ≈167.9 m ≈66.9 m35.5 m-100.2 m ≈50.2 m ≈
Capex-333.2 m45.0 m34.1 m33.5 m-262.5 m37.0 m117.6 m69.2 m
Dividends paid-71.4 m11.9 m11.9 m ≈12.0 m ≈-84.6 m12.8 m12.5 m ≈12.9 m ≈
Share repurchases-61.5 m35.3 m8.8 m ≈0 ≈-126.5 m135.7 m6.3 m ≈0 ≈

≈ derived quarter (cumulative difference / share-days average)

E/P over time

E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.

Today's P/E sits at the 50 percentile of its own 34-quarter history (min 4.1, median 10.4, max 72.9; quarters with earnings only).

Fiscal years

Fiscal year20182019202020212022202320242025
Revenue10.0 bn10.5 bn9.8 bn12.4 bn14.0 bn14.4 bn14.2 bn15.2 bn
Revenue YoY+0.9%+5.1%−6.6%+26.9%+12.9%+2.7%−1.0%+6.5%
Net income51.7 m144.1 m-51.4 m348.9 m88.5 m178.2 m216.0 m118.7 m
Net income YoY−44.5%+179.0%−135.7%unavailable−74.6%+101.4%+21.2%−45.0%
Diluted EPS1.203.30-1.218.062.234.976.183.42
Diluted EPS YoY−42.6%+175.0%−136.7%unavailable−72.3%+122.9%+24.3%−44.7%
net %0.5%1.4%-0.5%2.8%0.6%1.2%1.5%0.8%
Free cash flow-19.9 m45.2 m153.9 m8.1 m179.0 m-219.3 m-78.1 m417.5 m

Reported results vs expectations

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Balance sheet & financial health

Fiscal year 2025 · 31 Dec 2025

Cash
6.3 m USD
Financial debt
1.6 bn USD
Net debt
1.6 bn USD
Equity
1.1 bn USD
Total assets
6.0 bn USD
Debt / equity
1.51x
Current ratio
1.09x
ROE
11.1%
ROA
2.0%
FCF margin
2.8%

Financial statements (source on every figure)

Revenue and net income (USD)

Margins

Income statement · USD

Revenue
2023
14.4 bn
2024
14.2 bn
2025
15.2 bn

SEC (XBRL)· 23 Feb 2026verified

Cost of revenue
2023
12.1 bn
2024
12.0 bn
2025
12.8 bn

SEC (XBRL)· 23 Feb 2026verified

Gross profit
2023
2.2 bn
2024
2.2 bn
2025
2.4 bn

SEC (XBRL)· 23 Feb 2026verified

SG&A
2023
1.6 bn
2024
1.6 bn
2025
1.7 bn

SEC (XBRL)· 23 Feb 2026verified

Operating income
2023
423.6 m
2024
461.5 m
2025
367.5 m

SEC (XBRL)· 23 Feb 2026verified

Depreciation & amortisation
2023
142.3 m
2024
150.4 m
2025
163.4 m

SEC (XBRL)· 23 Feb 2026verified

EBITDA
2023
565.9 m ≈
2024
611.9 m ≈
2025
530.9 m ≈

SEC (XBRL)· 23 Feb 2026derived

Pre-tax income
2023
241.9 m
2024
256.1 m
2025
172.8 m

SEC (XBRL)· 23 Feb 2026verified

Income tax
2023
63.7 m
2024
40.1 m
2025
-54.1 m

SEC (XBRL)· 23 Feb 2026verified

Net income
2023
178.2 m
2024
216.0 m
2025
118.7 m

SEC (XBRL)· 23 Feb 2026verified

Diluted EPS
2023
4.97
2024
6.18
2025
3.42

SEC (XBRL)· 23 Feb 2026verified

Weighted average diluted shares
2023
35.9 m
2024
35.0 m
2025
34.7 m

SEC (XBRL)· 23 Feb 2026verified

Balance sheet · USD

Cash
2023
28.9 m
2024
44.0 m
2025
6.3 m

SEC (XBRL)· 23 Feb 2026verified

Inventories
2023
1.6 bn
2024
2.0 bn
2025
2.0 bn

SEC (XBRL)· 23 Feb 2026verified

Current assets
2023
2.5 bn
2024
2.9 bn
2025
2.8 bn

SEC (XBRL)· 23 Feb 2026verified

Property, plant & equipment, net
2023
1.6 bn
2024
1.6 bn
2025
1.6 bn

SEC (XBRL)· 23 Feb 2026verified

Goodwill
2023
253.8 m
2024
358.5 m
2025
421.8 m

SEC (XBRL)· 23 Feb 2026verified

Intangibles (excl. goodwill)
2023
417.4 m
2024
430.3 m
2025
454.1 m

SEC (XBRL)· 23 Feb 2026verified

Total assets
2023
5.4 bn
2024
5.9 bn
2025
6.0 bn

SEC (XBRL)· 23 Feb 2026verified

Accounts payable
2023
149.8 m
2024
172.0 m
2025
151.0 m

SEC (XBRL)· 23 Feb 2026verified

Short-term debt
2023
60.1 m
2024
76.1 m
2025
52.4 m

SEC (XBRL)· 23 Feb 2026verified

Long-term debt
2023
1.6 bn
2024
1.5 bn
2025
1.6 bn

SEC (XBRL)· 23 Feb 2026verified

Current liabilities
2023
2.3 bn
2024
2.6 bn
2025
2.6 bn

SEC (XBRL)· 23 Feb 2026verified

Equity
2023
891.9 m †
2024
1.1 bn †
2025
1.1 bn †

SEC (XBRL)· 23 Feb 2026verified

Cash flow · USD

Operating cash flow
2023
-15.7 m
2024
109.2 m
2025
567.4 m

SEC (XBRL)· 23 Feb 2026verified

Capex
2023
-203.6 m
2024
-187.3 m
2025
-149.9 m

SEC (XBRL)· 23 Feb 2026verified

Free cash flow
2023
-219.3 m ≈
2024
-78.1 m ≈
2025
417.5 m ≈

SEC (XBRL)· 23 Feb 2026derived

Investing cash flow
2023
-218.7 m
2024
-178.3 m
2025
-499.0 m

SEC (XBRL)· 23 Feb 2026verified

Financing cash flow
2023
34.1 m
2024
84.3 m
2025
-106.1 m

SEC (XBRL)· 23 Feb 2026verified

Dividends paid
2023
-40.0 m
2024
-40.8 m
2025
-48.8 m

SEC (XBRL)· 23 Feb 2026verified

Share repurchases
2023
-177.6 m
2024
-34.4 m
2025
-82.4 m

SEC (XBRL)· 23 Feb 2026verified

Computed indicators

Growth

Revenue growth (YoY)
6.5%
computed by olivLawFY 2025
Revenue CAGR 3Y
2.7%
computed by olivLawFY 2022 → FY 2025
Revenue CAGR 5Y
9.2%
computed by olivLawFY 2020 → FY 2025
EBIT growth (YoY)
-20.4%
computed by olivLawFY 2025
Net income growth (YoY)
-45.0%
computed by olivLawFY 2025
Net income CAGR 3Y
10.3%
computed by olivLawFY 2022 → FY 2025
Net income CAGR 5Y
unavailable
the base of the ratio is not positive
EPS growth (YoY)
-44.7%
computed by olivLawFY 2025
EPS CAGR 3Y
15.3%
computed by olivLawFY 2022 → FY 2025
EPS CAGR 5Y
unavailable
the base of the ratio is not positive
FCF growth (YoY)
unavailable
the base of the ratio is not positive

Profitability

Gross margin
15.7%
computed by olivLawTTM to 30 Sept 2026
EBITDA margin
4.3%
computed by olivLawTTM to 30 Sept 2026
EBIT margin
3.2%
computed by olivLawTTM to 30 Sept 2026
Net margin
1.3%
computed by olivLawTTM to 30 Sept 2026
FCF margin
0.1%
computed by olivLawTTM to 30 Sept 2026

Returns

ROE
19.4%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
ROA
3.3%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
ROIC
15.9%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
ROCE
15.3%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
Payout ratio (EPS)
unavailable
input data missing
Payout ratio (FCF)
338.7%
computed by olivLawTTM to 30 Sept 2026

Balance sheet

Net debt
1.7 bn USD
computed by olivLawbalance sheet at 30 Sept 2026
Net debt / EBITDA
2.6x
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
Debt / equity
1.6x
computed by olivLawbalance sheet at 30 Sept 2026
Interest coverage
unavailable
the reported interest expense is far older than the latest period (the filer changed its XBRL tag): a stale figure is not used

Liquidity

Current ratio
1.0x
computed by olivLawbalance sheet at 30 Sept 2026
Quick ratio
0.2x
computed by olivLawbalance sheet at 30 Sept 2026
Cash ratio
0.0x
computed by olivLawbalance sheet at 30 Sept 2026

Cash

Operating cash flow
52.4 m USD
computed by olivLawTTM to 30 Sept 2026
Capital expenditure
38.7 m USD
computed by olivLawTTM to 30 Sept 2026
Free cash flow
13.7 m USD
computed by olivLawTTM to 30 Sept 2026
FCF conversion
6.6%
computed by olivLawTTM to 30 Sept 2026
Cash conversion
8.0%
computed by olivLawTTM to 30 Sept 2026

Efficiency

Days sales outstanding
unavailable
input data missing
Days inventory outstanding
63 days
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
Days payables outstanding
5 days
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
Cash conversion cycle
unavailable
input data missing

Market and valuation

Market capitalisation
unavailable
input data missing
Enterprise value
unavailable
input data missing
Market cap / net income TTM
unavailable
input data missing
P/E (TTM)
10.3x
computed by olivLawTTM to 30 Sept 2026
Earnings yield
9.7%
computed by olivLawTTM to 30 Sept 2026
P/B
unavailable
input data missing
P/S
unavailable
input data missing
EV/EBITDA
unavailable
input data missing
EV/EBIT
unavailable
input data missing
EV/Sales
unavailable
input data missing
P/FCF
unavailable
input data missing
FCF yield
unavailable
input data missing
Dividend yield
0.4%
computed by olivLawTTM to 30 Sept 2026
Shareholder yield (distributions)
unavailable
input data missing

1 indicators that do not apply to the sector.

Valuation

olivLaw classification

Neutral profile

Score: 40 / 100

A scoring methodology on indicators and valuation, not investment advice.

Closing price

64.05 USD

04 Nov 2026Source: olivLaw, closing series

Market cap: unavailable

Key indicators

Market capitalisation
unavailable
input data missing
P/E (TTM)
10.3x
computed by olivLawTTM to 30 Sept 2026
P/B
unavailable
input data missing
EV/EBITDA
unavailable
input data missing
ROE
19.4%
computed by olivLawTTM to 30 Sept 2026 · balance sheet at 30 Sept 2026
Net margin
1.3%
computed by olivLawTTM to 30 Sept 2026
Revenue growth (YoY)
6.5%
computed by olivLawFY 2025
Dividend yield
0.4%
computed by olivLawTTM to 30 Sept 2026

Coverage and freshness

31/37 reporting lines present
Latest full fiscal year: 2025
Latest reported period: 30 Sept 2026
Latest balance sheet date: 30 Sept 2026
Source: SEC (XBRL)published 29 Oct 2026
verified 2556derived 212

Score by group

  • Valuation58
  • Returns0
  • Quality38
  • Balance sheet18
  • Growth61

Estimated value range

Low
29.45
USD per share
Mid
45.63
USD per share
High
71.36
USD per share
Price: 64.05 USD
The price is within the range
Potential to the central value: -28.8% (value / price − 1)
Margin of safety: -40.4% (1 − price / value)
Agreement between methods: low · 2 methods used · 2 independent bases

The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 3.15 – 138.48 USD.

Valuation assumptions are editorial choices, not measured; beta is not measured.

Method ranges (USD per share)

— — Mid · ▏ Price

Valuation methods

  • DCF (discounted cash flow)unavailable · the reported interest expense is far older than the latest period (the filer changed its XBRL tag): a stale figure is not used
  • Peers: EV/EBITDAunavailable · input data missing
  • Peers: P/E55.74 – 138.48 (Mid 87.65)
    11 companies used · median multiple 14.1x · quartiles 9.0x – 22.3x
    ABG, AN, CASY, CPRT, GPI, KMX, LAD, MUSA, OPLN, PAG, RUSHA
  • Dividend discount (DDM)3.15 – 4.24 (Mid 3.62)
Multiple comparisons use the SIC vertical: Retail-Auto Dealers & Gasoline Stations (SIC 5500)

Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.

Assumptions (illustrative, editorial)

Risk-free rate
4.3%
Equity risk premium
5.0%
Beta (default)
1.00
Cost of equity
9.3%
Terminal growth
2.5%

Factor scorecard

Neutral profile · Score 40/100

FactorValueScoreWeight used
ROIC · Quality15.9%63 (vs peers)15%
Net margin · Quality1.3%35 (vs peers)9%
FCF conversion · Quality6.6%0 (on a fixed band)9%
Revenue CAGR 3Y · Growth2.7%22 (on a fixed band)12%
EPS CAGR 3Y · Growth15.3%100 (on a fixed band)12%
Net debt / EBITDA · Balance sheet2.6x20 (vs peers)15%
Interest coverage · Balance sheetunavailableunavailable—
Current ratio · Balance sheet1.0x13 (on a fixed band)6%
P/E (TTM) · Valuation10.3x58 (vs peers)15%
EV/EBITDA · Valuationunavailableunavailable—
FCF yield · Valuationunavailableunavailable—
Shareholder yield (distributions) · Returnsunavailableunavailable—
Payout ratio (FCF) · Returns338.7%0 (on a fixed band)6%

Factors without a value were dropped; the remaining weights were renormalised.

Score groups

  • Balance sheet18/100 · 2/3 factors with a value
  • Growth61/100 · 2/2 factors with a value
  • Quality38/100 · 3/3 factors with a value
  • Returns· partial0/100 · 1/2 factors with a value
  • Valuation· partial58/100 · 1/3 factors with a value

A «partial» group is computed from under half of its weight or from one factor: it is not a full assessment of the group.

Memo

SONIC AUTOMOTIVE, INC. (SAH). Latest full fiscal year: 2025; data up to 2026-09-30.

Figures computed from the financial statements: revenue 15.2 bn USD in 2025; YoY growth 6.5%; net margin 1.3%; ROE 19.4%; net debt/EBITDA 2.6x.

The estimated value range is 29.45–71.36 USD per share (median of 2 methods, agreement: low); assumptions are illustrative. Against the central value of 45.63 USD, the price of 64.05 USD leaves a potential of -28.8% (value / price − 1) and a margin of safety of -40.4% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.

olivLaw score 40/100, methodological classification: neutral profile (score, margin of safety and method agreement together; not a judgement of the right price). Groups assessed only in part: returns, valuation. Not investment advice.

Text generated deterministically from the figures shown; no language model. Not investment advice.

What supports the thesis

  • EPS CAGR 3Y: 15.3%

What contradicts it

  • FCF conversion: 6.6%
  • Revenue CAGR 3Y: 2.7%
  • Net debt / EBITDA: 2.6x
  • Current ratio: 1.0x
  • Payout ratio (FCF): 338.7%
  • The valuation methods diverge

Not assessed (insufficient data or a ratio without meaning): Interest coverage, EV/EBITDA, FCF yield, Shareholder yield (distributions).

Versus the vertical median

Retail-Auto Dealers & Gasoline Stations (SIC 5500) · same industry (4-digit SIC) · compared with 18 companies

Multiples and returns vs the median

P/E
10.3x
vertical median 14.0x
below median (−26.6%)
EV/EBITDA
—
vertical median 6.0x
P/S
—
vertical median 0.3x
P/B
—
vertical median 1.0x
ROE
19.4%
vertical median 11.8%
above median (+63.6%)
Net margin
1.3%
vertical median 2.6%
below median (−49.4%)
EBIT margin
3.2%
vertical median 4.1%
below median (−21.8%)
Revenue YoY
6.5%
vertical median 4.0%
above median (+63.4%)
Net debt/EBITDA
2.6x
vertical median 0.4x
above median (+524.2%)
Dividend yield
0.4%
vertical median 0.8%
below median (−50.1%)

Price rebased to 100 (monthly, 5 years)

Companies in the vertical

Market capP/EROENet marginRevenue YoY1A / 3A
CPRTCopart, Inc.28.8 bn20.016.2%31.8%+0.4%−20% / −38%
CASYCasey’s General Stores, Inc.24.6 bn32.020.0%4.1%+10.2%+17% / +142%
PAGPenske Automotive Group, Inc.13.9 bn15.515.5%2.8%−0.2%+31% / +42%
MUSAMurphy USA Inc.9.1 bn14.199.0%2.9%−4.2%+30% / +36%
KMXCarmax, Inc.7.8 bn26.94.7%1.1%−1.8%+43% / −14%
LADLithia Motors, Inc.6.8 bn9.111.8%2.1%+4.0%−1% / +18%
ANAutonation, Inc.5.9 bn8.830.2%2.6%+3.2%−13% / +36%
OPLNOPENLANE, Inc.4.5 bn24.513.4%9.7%+8.2%+44% / +151%
ABGAsbury Automotive Group, Inc.3.8 bn8.311.8%2.7%+4.7%−10% / −0%
GPIGroup 1 Automotive, Inc3.3 bn8.612.4%1.7%+13.2%−32% / −3%
NXXTNextnrg, Inc.427.3 m——-61.3%+194.7%+108% / −43%
VRMVroom, Inc.36.5 m—-45.0%—−54.2%−66% / unavailable
KXINKaixin Holdings12.2 m—-307.2%-41,788.4%unavailable−96% / −100%
CRMTAmerica’s Car-Mart, Inc.10.5 m—-43.0%-18.6%−7.9%−94% / −98%
JZXNJiuzi Holdings Inc.1.4 m—-90.7%-353.5%+105.9%−86% / −100%
RUSHARush Enterprises, Inc.—14.011.8%3.7%−4.7%+33% / +75%
CVNACarvana Co.00.051.5%6.2%+48.6%+4% / +1,138%
CWHCamping World Holdings, Inc.0—-33.2%-1.6%+4.4%−52% / −74%
SAHSonic Automotive, Inc.—10.319.4%1.3%+6.5%+4% / +21%

1- and 3-year price returns: for SAH from daily closes (the same as the performance table), for the other companies from month-end closes.

olivLaw engine forecast

The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.

The engine has no published run for this company yet.

Valuation scenarios (editable assumptions)

Illustrative scenarios

Scenarios are not available. input data missing

AI analysis

AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.

Possibly outdated: the newest document it read is from 30 Jul 2026; since then the company filed 8-K (29 Oct 2026 · results), 10-Q (29 Oct 2026).

In brief

Sonic Automotive is one of the largest US automotive retailers, earning revenue from new and used vehicle sales, service, financing and insurance, plus a powersports division. In the second quarter of 2026 it reported revenue of 3.9 billion dollars and record quarterly gross profit, even as weaker demand and price competition in new vehicle sales weighed on margins, making its diversified model worth examining.

SWOT

Strengths

  • Diversification across several segments and revenue streams, including service and F&I with higher margins, provides stability.
  • Scale and presence in several states help with acquisitions and negotiations with manufacturers.
  • Balance sheet and liquidity considered sufficient to fund investment and dividends, according to the release 3.

Weaknesses

  • Reliance on new vehicle sales, with shrinking margins, exposes the company to market cycles.
  • EchoPark profit per unit declined and segment profitability was below the prior year in Q2 2026 3.
  • Concentration in premium and mid-line import brands increases exposure to manufacturer decisions.

Opportunities

  • The Harley-Davidson store acquisitions could expand the Powersports division 3.
  • Growth in used vehicle sales and Fixed Operations could offset declines in new vehicle sales.
  • The fragmented market could offer acquisition opportunities as consolidation continues.

Threats

  • Direct manufacturer sales and technology companies could reduce the dealer role 1.
  • Tariffs and trade restrictions could raise costs and reduce vehicle affordability.
  • High interest rates and tighter credit could reduce consumers' ability to buy.

Risks

  • Competition and online saleshigh

    Dealers compete with online platforms and with manufacturers that could sell directly, which may reduce margins 1.

  • Dependence on new vehicleshigh

    New vehicle sales are the largest revenue component and are sensitive to consumer demand and manufacturer supply 1.

  • Access to used vehicle inventorymedium

    Shortages of quality used stock and higher acquisition costs could affect volume and margins, especially at EchoPark 1.

  • Tariffs and international trademedium

    Tariffs on imported vehicles and parts could raise prices and reduce demand for certain models 1.

  • Depreciation and inventory losseslow

    Used vehicles depreciate and excess inventory can generate losses, according to 1.

Investment thesis

What would need to be true (bull case)

  • If growth in used vehicle volumes and Fixed Operations continues, the company could offset pressure on new vehicle margins.
  • The Harley-Davidson acquisition could add recurring revenue to Powersports if integration goes well 3.
  • If market consolidation continues, the company could acquire dealerships on favorable terms and strengthen its position.

What would break the thesis

  • If new vehicle demand falls as the 2026 estimates suggest, profit could be significantly affected 2.
  • If manufacturer direct sales expand, the dealer role could diminish over the long term 1.
  • Falling gross profit per unit and rising inventory could keep compressing margins in the new vehicle business 23.

What to watch

  • Trend in gross profit per new vehicle unitQ3 2026
  • Opening of new EchoPark stores and expansion disciplineQ4 2026
  • Integration of the five Harley-Davidson stores and their contribution to Powersports2027
  • Updated US new vehicle volume estimatesnext 10-K

Products, market & competition

AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.

Possibly outdated: the newest document it read is from 30 Jul 2026; since then the company filed 8-K (29 Oct 2026 · results), 10-Q (29 Oct 2026).

The business

Sonic Automotive, incorporated in Delaware, runs three reportable segments: Franchised Dealerships, EchoPark and Powersports. Franchised Dealerships sells new and used vehicles and provides Fixed Operations (parts, service and collision repair) and F&I services, meaning third-party financing, extended warranties and insurance. EchoPark sells mainly used vehicles in specialty locations without customer-facing service, while Powersports sells motorcycles, personal watercraft and all-terrain vehicles. According to 1, Franchised Dealerships represented approximately 85.0% of total revenue in 2025, and EchoPark approximately 13.7%.

The company says higher-margin income comes from F&I and Fixed Operations, which are less sensitive to economic cycles than vehicle sales. At December 31, 2025 it operated 111 Franchised Dealerships stores, 18 EchoPark stores and 14 Powersports stores 1. By June 30, 2026 Powersports stores had risen to 20 and Franchised Dealerships stores had fallen to 107, according to 2.

Strategy also includes dealership acquisitions, EchoPark network expansion and share repurchases. The company announced in April 2026 the acquisition of five Harley-Davidson stores, which could add meaningful annualized revenue to Powersports 3.

Segments

Franchised Dealerships

This is the core segment, with 127 new vehicle franchises across 24 car and light truck brands as of June 30, 2026 2. In Q2 2026 same store revenue rose 2% while gross profit fell 3%, and gross profit per new retail unit dropped 16% to 2,872 dollars 32. Fixed Operations reached a quarterly record with a gross margin of 51.0% 3.

Powersports

The segment reached record second-quarter revenue of 73.5 million dollars in 2026, up 53%, while gross profit grew 58% 3. The acquisition of five Harley-Davidson stores could expand this division materially.

Market context

According to 1, total US new vehicle sales were about 16.3 million in 2025, and the light vehicle parc was about 298.7 million units. For 2026 the company estimates new vehicle volume between 15.5 million and 16.0 million, a decline from 2025 2. The market remains fragmented and further consolidation could follow.

Tariffs, interest rates and consumer confidence affect demand and access to financing. If these conditions worsen, vehicle sales could fall; if they improve, they could support volumes again.

Competitive position

Competition comes from dealerships selling the same brands, multi-franchise and used vehicle groups, as well as online platforms and technology companies that could change the distribution model 1. Key factors are location, pricing, customer experience and service quality.

Margin risk grows if manufacturers expand direct sales, since the dealer role could diminish. The company also notes that other groups are investing heavily in online sales 1.

  • AutoNation, Inc.AN

    US auto dealer group operating in similar markets; not named in the sources provided, so the ticker is indicative.

  • Lithia Motors, Inc.LAD

    Multi-franchise US dealer group, a general competitor in new and used vehicle sales; not named in the sources provided.

  • Technology companies selling vehicles directly

    Companies that sell vehicles online or directly, cited in 1 as potential competitors whose models could reduce dealer roles.

  • Online automotive sales platforms

    Brokers and online services that refer customers to other dealerships or sell directly, cited in 1 as pressure on margins.

News & filings

In the press

The latest news item in our archive is from 23 Oct 2026; the newest SEC filing is from 29 Oct 2026. The press archive comes from the RSS feeds we follow and does not necessarily cover the latest event — the filings alongside do.

SEC filings

  • Quarterly report29 Oct 2026
  • Current report29 Oct 2026
    Results of operations · Regulation FD disclosure · Financial statements and exhibits
  • Quarterly report30 Jul 2026
  • Current report30 Jul 2026
    Results of operations · Regulation FD disclosure · Financial statements and exhibits
  • Current report08 May 2026
    Departure or appointment of officers
  • Current report01 May 2026
    Departure or appointment of officers · Shareholder vote · Financial statements and exhibits
  • Quarterly report30 Apr 2026
  • Current report30 Apr 2026
    Results of operations · Regulation FD disclosure · Financial statements and exhibits
  • Current report02 Apr 2026
    Material agreement · Creation of a direct financial obligation · Financial statements and exhibits
  • Proxy statement06 Mar 2026

Sources

  1. [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / Sonic Automotive, Inc. · 23 Feb 2026
  2. [2] Form 10-Q, quarter ended 2026-06-30 · SEC / Sonic Automotive, Inc. · 30 Jul 2026
  3. [3] Form 8-K, results release (exhibit 99.1) · SEC / Sonic Automotive, Inc. · 30 Jul 2026

Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.