Group 1 - Asbury Automotive Group reported quarterly earnings of $7.26 per share, exceeding the Zacks Consensus Estimate of $6.07 per share, and showing an increase from $7.12 per share a year ago, resulting in an earnings surprise of 19.60% [1] - The company achieved revenues of $4.5 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.96%, compared to $3.81 billion in the same quarter last year [2] - Asbury Automotive shares have increased approximately 12.9% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $7.07 on revenues of $4.35 billion, and for the current fiscal year, it is $27.01 on revenues of $17.31 billion [7] - The Zacks Industry Rank for Automotive - Retail and Whole Sales is currently in the bottom 42% of over 250 Zacks industries, indicating potential challenges for stock performance [8] Group 3 - The estimate revisions trend for Asbury Automotive is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market in the near future [6] - AutoNation, another company in the same industry, is expected to report quarterly earnings of $4.26 per share, reflecting a year-over-year decline of 15.1% [9]

Financial Performance - Fourth quarter 2024 net income reached $129 million ($6.54 per diluted share), a 132% increase from $56 million ($2.70 per diluted share) in Q4 2023[2] - Full year 2024 net income was $430 million ($21.50 per diluted share), a 25% decrease compared to $603 million ($28.74 per diluted share) in the prior year[10] - Total adjusted EBITDA for the full year 2024 was $982 million, a 13% decrease from the prior year[13] - Net income for Q4 2024 was $128.8 million, a 132% increase from $55.5 million in Q4 2023[33] - Basic earnings per share increased by 142% to $6.58 in Q4 2024, compared to $2.72 in Q4 2023[33] - For the year ended December 31, 2024, net income was $430.3 million, a decrease of 37.6% compared to $683.6 million in 2023[48] - Diluted EPS for 2024 was $21.50, down from $32.60 in 2023, reflecting a decrease of 34.1%[48] Revenue Growth - Total revenue for Q4 2024 was an all-time record of $4.5 billion, representing an 18% growth year-over-year[5] - Total revenue for Q4 2024 was $4,504.5 million, an 18% increase from $3,811.7 million in Q4 2023[41] - New vehicle revenue increased by 19% to $2,457.1 million in Q4 2024, compared to $2,058.5 million in Q4 2023[41] - Used vehicle retail revenue rose by 14% to $1,098.9 million in Q4 2024, up from $965.8 million in Q4 2023[33] - Total consolidated revenue for the twelve months ended December 31, 2024, was $17,188.6 million, an increase from $14,802.7 million in the previous year, representing a growth of 15.9%[45] Profitability Metrics - Parts & Service gross profit for Q4 2024 was $340 million, a 19% increase, with same store Parts & Service gross profit growth of 11%[5] - Gross profit for Q4 2024 was $749.9 million, an 11% increase from $673.0 million in Q4 2023[33] - Overall gross profit for the company was maintained at 100% year-over-year[39] - The total gross profit margin decreased to 16.6% in Q4 2024 from 17.7% in Q4 2023, a decline of 101 basis points[41] - Segment operating income for the twelve months ended December 31, 2024, was $889.5 million, compared to $1,025.0 million in the previous year, reflecting a decrease of 13.2%[45] Expenses and Cost Management - Adjusted SG&A as a percentage of gross profit was 62.0%, showing improvement for two consecutive quarters[5] - Selling, general and administrative (SG&A) expenses for the three months ended December 31, 2024, were $476.9 million, compared to $410.5 million in the same period last year, an increase of 16.1%[47] - Selling, general and administrative (SG&A) expenses for 2024 totaled $1,888.5 million, representing 64.0% of gross profit, compared to 58.7% in 2023[48] Liquidity and Capital Management - As of December 31, 2024, the company had total liquidity of $828 million, including cash and availability under credit lines[14] - The company repurchased approximately 830,000 shares for $183 million in 2024, with $276 million remaining on its share repurchase authorization[15] - The adjusted long-term net debt as of December 31, 2024, was $2,796.9 million, a decrease from $2,870.6 million in the previous year[46] Vehicle Sales and Inventory - New vehicle unit volume increased by 18% in 2024, with new vehicle revenue increasing by 19%[11] - Days supply of new vehicle inventory decreased to 49 days as of December 31, 2024, down from 63 days as of September 30, 2024[36] - Used vehicle retail sales grew by 24.4%, while wholesale sales increased by 3.5%[39] - The used to new vehicle sales ratio decreased to 70.4% from 76.4% in the previous year[43] Market Trends - Total imports accounted for 40% of new vehicle sales, with domestic sales at 28%[39] - Luxury vehicle revenue growth: Lexus 10%, Mercedes 8%, BMW 3%, Land Rover 2%[39] - Total revenue from luxury brands reached 32% of overall sales, up from 34%[39]

Company Overview - Asbury Automotive Group (ABG) is expected to report a year-over-year decline in earnings, with a projected EPS of $6.04, reflecting a decrease of 15.2% compared to the previous year [3] - Revenue for the upcoming quarter is anticipated to be $4.13 billion, which represents an increase of 8.5% from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has been revised 0.28% higher in the last 30 days, indicating a slight bullish sentiment among analysts [4] - The Most Accurate Estimate for Asbury Automotive is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +1.49%, suggesting a likelihood of beating the consensus EPS estimate [10][11] Earnings Surprise History - In the last reported quarter, Asbury Automotive was expected to post earnings of $6.65 per share but only achieved $6.35, resulting in a surprise of -4.51% [12] - The company has not surpassed consensus EPS estimates in any of the last four quarters [13] Industry Context - Group 1 Automotive (GPI), a peer in the automotive retail and wholesale industry, is expected to report earnings of $9.17 per share, reflecting a year-over-year decline of 3.5%, with revenues projected at $5.2 billion, up 16.1% from the previous year [17] - Group 1 Automotive's consensus EPS estimate has been revised down by 0.3% over the last 30 days, and it currently has an Earnings ESP of -1.05%, indicating uncertainty in beating the consensus EPS estimate [18]

Core Viewpoint - Asbury Automotive Group, Inc. (NYSE: ABG) is set to report its full-year results on January 30, before market opening, prompting analysis of expected performance [1]. Financial Expectations - Analysts are preparing for the upcoming earnings report, focusing on key financial metrics and trends that may influence investor sentiment and stock performance [1].

Group 1 - Black Bear Value Partners is an alternative asset management firm focused on a long-term, fundamental, and value-oriented investment approach [1] - The firm is managed by Adam Schwartz, who has 20 years of buy-side investment experience across various themes including equities, structured products, corporate credit, and capital structure arbitrage [1]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Asbury Automotive Group (ABG) and Group 1 Automotive (GPI) as strong value stocks based on their financial metrics and rankings [2][8]. Company Analysis: Asbury Automotive Group (ABG) - ABG has a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for value investors [3]. - The company's price-to-book (P/B) ratio is 1.39, which is lower than the industry average of 2.29, suggesting it may be undervalued [4]. - ABG's P/CF ratio stands at 9.88, which is attractive compared to the industry's average of 10.07, further indicating potential undervaluation [5]. - Over the past year, ABG's P/B has fluctuated between 1.26 and 1.63, with a median of 1.38 [4]. - The P/CF ratio has ranged from 5.88 to 11.08, with a median of 8.71 [5]. Company Analysis: Group 1 Automotive (GPI) - GPI also holds a Zacks Rank of 2 (Buy) and has a Value score of A, making it another attractive option for value investors [6]. - The Forward P/E ratio for GPI is 10.40, while the PEG ratio is 2.05, compared to industry averages of 8.27 and 1.38 respectively [6]. - GPI's price-to-earnings (P/E) ratio has varied from 6.51 to 10.99, with a median of 7.99 over the past year [7]. - The P/B ratio for GPI is 1.88, which is also below the industry average of 2.29, indicating potential undervaluation [7]. Conclusion - Both Asbury Automotive Group and Group 1 Automotive are highlighted as likely undervalued stocks based on their financial metrics and earnings outlook, making them appealing options for value investors [8].

Core Viewpoint - The Zacks Auto Retail and Wholesale industry is facing challenges due to declining profit per unit and high vehicle financing costs, despite stable demand for vehicles. Companies like Lithia Motors, Group 1 Automotive, and Asbury Automotive are expanding their digital and physical presence to adapt to these challenges [1]. Industry Overview - The automotive sector's performance is heavily reliant on retail and wholesale networks, including dealerships and retail chains that sell vehicles and provide related services. Economic conditions significantly influence consumer spending on big-ticket items, with the pandemic accelerating the shift towards e-commerce [2]. Factors Influencing Industry Prospects - Anticipated decline in internal combustion engine (ICE) vehicle sales is expected, with projections indicating that ICE vehicles will account for only 75% of total sales volume by 2025, leading to potential price reductions and margin pressures for dealers holding ICE inventories [3]. - Affordability challenges persist as high-interest rates deter customers from vehicle purchases. Despite recent interest rate cuts by the Federal Reserve, rates remain significantly higher than pre-pandemic levels, which may continue to impact the auto retail industry [4]. Expanding Market Presence - Auto dealers are strategically acquiring new markets to enhance their market share and profitability. The focus on digital presence is also helping them reach a broader customer base [5]. Zacks Industry Rank - The Zacks Auto Retail & Wholesale industry currently holds a rank of 177, placing it in the bottom 29% of approximately 250 Zacks industries, indicating dim near-term prospects [6][7]. Earnings Outlook - The industry's earnings estimates for 2025 have declined by 30.80% over the past year, reflecting a negative outlook from analysts regarding earnings growth potential [8]. Stock Market Performance - The Zacks Auto Retail & Wholesale industry has underperformed compared to the S&P 500 and the broader Auto, Tires, and Truck sector, with a return of 8.7% over the past year, while the sector and S&P 500 grew by 26.2% and 26.9%, respectively [10][11]. Current Valuation - The industry is currently trading at an EV/EBITDA ratio of 8.39X, significantly lower than the S&P 500's 18.67X and the sector's 22X, indicating a valuation discount [14]. Company Highlights - **Lithia Motors, Inc. (LAD)**: A leading automotive retailer with a diversified product mix and multiple income streams, positioned for long-term growth. The company expects 2025 sales and EPS growth of 8.08% and 17.74%, respectively, with a recent EPS estimate increase of $0.97 [19]. - **Group 1 Automotive, Inc. (GPI)**: A major automotive retailer with a diversified portfolio, anticipating 2025 sales and EPS growth of 11.33% and 5.27%, respectively, with a recent EPS estimate increase of $0.25 [24]. - **Asbury Automotive Group, Inc. (ABG)**: One of the largest automotive retailers, leveraging its Clicklane e-commerce platform for online transactions. The company expects 2025 sales and EPS growth of 2.70% and 7.23%, respectively [28].

A month has gone by since the last earnings report for Asbury Automotive Group (ABG) . Shares have added about 11.6% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Asbury Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Asbury's Q3 Earnings Miss Estima ...

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