Financial Performance - First quarter revenue increased 2% to a record $7.6 billion compared to the same period in 2024[1] - Net income attributable to common stockholders rose 14% to $244.3 million, with earnings per share increasing 14% to $3.66[1] - Adjusted net income increased 5% to $226.3 million, and adjusted earnings per share rose 6% to $3.39[1] - Total revenue for the three months ended March 31, 2025, was $7,604.5 million, an increase of 2.1% from $7,447.8 million in the same period of 2024[22] - Gross profit for the three months ended March 31, 2025, was $1,269.0 million, up from $1,245.2 million in 2024, reflecting a gross margin of 16.7%[22] - The company reported an EBITDA of $399.5 million for the three months ended March 31, 2025, compared to $353.9 million in 2024[23] - Net Income attributable to Common Stockholders rose to $244.3 million in Q1 2025, a 13.5% increase from $215.2 million in Q1 2024[38] - Adjusted Net Income attributable to Common Stockholders increased by 5.2% to $226.3 million in Q1 2025 from $215.2 million in Q1 2024[38] - EBITDA for Q1 2025 was $399.5 million, reflecting a 12.9% increase from $353.9 million in Q1 2024[39] Revenue Breakdown - Retail automotive same-store revenue increased 2%, driven by a 4% increase in same-store service and parts revenue[4] - Total retail automotive revenue increased 1% to $6.6 billion, with total retail automotive gross profit rising 3% to $1.1 billion[6] - Retail automotive revenue increased by 1.4% to $6,569.3 million compared to $6,478.0 million in the prior year[22] - Total Revenue for Retail Automotive increased by 2.1% to $6,368.1 million, driven by a 7.2% increase in New Vehicles revenue to $2,923.3 million[29] - Retail Commercial Truck Operations saw a total revenue increase of 4.0% to $823.7 million, with New Vehicles revenue rising by 6.7% to $527.2 million[31] Vehicle Sales - New retail automotive units sold increased by 4.0% to 50,602 units, while used retail units decreased by 15.6% to 58,486 units[26] - Retail Automotive Same-Store Units for New Retail increased by 3.8% to 49,076, while Used Retail decreased by 10.6% to 57,175, resulting in a total retail decrease of 4.5% to 106,251 units[29] - Retail Commercial Truck Same-Store Units for New Retail decreased by 2.1% to 3,419, while Used Retail decreased by 9.1% to 954 units[33] Profitability Metrics - New vehicle gross profit per unit retailed declined by $87, while used vehicle gross profit per unit increased by $352 compared to Q4 2024[3] - Retail Automotive Same-Store Gross Profit rose by 2.6% to $1,053.4 million, with Service and Parts showing a significant increase of 6.3% to $450.2 million[29] - Retail Commercial Truck Same-Store Gross Profit fell by 7.6% to $133.2 million, with New Vehicles gross profit decreasing by 12.7% to $30.2 million[33] - Retail Automotive Same-Store Gross Margin remained stable at 16.5%, with Service and Parts showing an improvement of 120 basis points to 58.9%[29] - Retail Commercial Truck Gross Margin for New Vehicles decreased by 60 basis points to 6.4%, while Used Vehicles gross margin increased by 610 basis points to 11.4%[31] Shareholder Returns and Capital Management - The company repurchased 254,406 shares for approximately $39.9 million during the quarter, with an additional 495,570 shares repurchased for $71.2 million from April 1 to April 25, 2025[9] - Capital expenditures decreased to $76.6 million in Q1 2025 from $102.5 million in Q1 2024, while stock repurchases increased to $40.0 million from $32.9 million[35] Liquidity and Debt - As of March 31, 2025, the company had approximately $2.1 billion in liquidity, including $118 million in cash[9] - The leverage ratio at March 31, 2025, was 1.2x[9] - Cash and cash equivalents increased to $118.4 million from $72.4 million as of December 31, 2024[19] - Total Long-Term Debt decreased to $1,771.5 million as of March 31, 2025, from $1,852.0 million at December 31, 2024[36] - The Debt to Total Capitalization Ratio improved to 24.7% as of March 31, 2025, down from 26.2% at December 31, 2024[36] Inventory Management - New vehicle days' supply decreased to 39 days in Q1 2025 from 49 days in Q4 2024, indicating tighter inventory[36] Geographic Revenue Mix - The company’s North America revenue mix increased to 59.4% from 56.5% year-over-year, while the U.K. revenue mix decreased to 30.6% from 34.2%[22]

Core Insights - Penske Automotive (PAG) reported $7.6 billion in revenue for Q1 2025, a year-over-year increase of 2.1% and an EPS of $3.39 compared to $3.19 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] Financial Performance - Revenue for Retail Automotive was $6.57 billion, slightly below the average estimate of $6.59 billion, reflecting a year-over-year change of +1.4% [4] - Revenue from New Vehicles in Retail Automotive was $3.02 billion, surpassing the average estimate of $2.99 billion, with a year-over-year increase of +7.8% [4] - Retail Commercial Truck revenue was reported at $823.70 million, slightly below the average estimate of $828.49 million, with a year-over-year change of +4% [4] - Revenue from Commercial Vehicle Distribution and Other was $211.50 million, exceeding the average estimate of $190.52 million, representing an 18.8% year-over-year increase [4] Market Performance - Penske's shares returned +7.7% over the past month, outperforming the Zacks S&P 500 composite, which saw a -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1 - Penske Automotive reported quarterly earnings of $3.39 per share, exceeding the Zacks Consensus Estimate of $3.27 per share, and up from $3.19 per share a year ago, representing an earnings surprise of 3.67% [1] - The company achieved revenues of $7.6 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.14%, and an increase from $7.45 billion year-over-year [2] - Penske has outperformed the S&P 500, with shares increasing about 3.4% since the beginning of the year, while the S&P 500 has declined by 5.5% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $3.55 on revenues of $7.91 billion, and for the current fiscal year, it is $13.80 on revenues of $30.7 billion [7] - The Automotive - Retail and Whole Sales industry, to which Penske belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Financial Performance - Revenue for Q1 2025 reached $7605 million, a 2% increase compared to $7448 million in Q1 2024 [22] - Net income attributable to common stockholders was $244 million, up 14% from $215 million in Q1 2024 [22] - Earnings per share increased by 14% to $366, compared to $321 in Q1 2024 [22] - Adjusted earnings per share increased by 6% to $339, compared to $321 in Q1 2024 [22] - Adjusted EBITDA for Q1 2025 was $3724 million, a 52% increase compared to $3539 million in Q1 2024 [69] Retail Automotive - Retail auto same-store revenue increased by 2% to $6368 million [22] - New vehicle price increased by 35% to $59202, while used vehicle price increased by 115% to $37624 [27] - Same-store new units volume increased by 4% to 49076, while used units volume decreased by 11% to 57175 [35] Capital Allocation and Liquidity - Returned $122 million to shareholders in Q1 2025, including $82 million in dividends and $40 million through share repurchases [28] - As of March 31, 2025, the company had $118 million in cash and $2 billion of availability under its credit agreements and mortgage facilities [27] - The company's leverage ratio was 12x as of March 31, 2025 [27] Penske Transportation Solutions (PTS) - PTS operating revenue remained relatively stable at $2703 million in Q1 2025 [58] - PTS net income increased by 3% to $115 million in Q1 2025 [58] - PAG recorded equity income from PTS investment of $332 million for the three months ended March 31, 2025 [61]

Investment Rating - The report assigns an "Overweight" (OW) rating to General Motors (GM) and Ford, while Tesla and Rivian are rated "Underweight" (UW) [6][7]. Core Insights - The automotive industry is experiencing varied performance metrics across different companies, with GM and Ford showing potential upside in their stock prices, while Tesla and Rivian face significant downside risks [6][7]. - The report highlights the importance of valuation metrics such as EV/EBITDA, P/E ratios, and sales growth projections for assessing investment opportunities within the automotive sector [6][22]. Global Auto OEMs Investment Comparables - General Motors (GM) has a current price of $44.57 with a market cap of $43.067 billion and a target price of $53.00, indicating a 19% upside potential [6]. - Ford (F) is priced at $9.63 with a market cap of $38.294 billion and a target price of $11.00, representing a 14% upside [6]. - Ferrari (RACE) is valued at $439.97 with a target price of $460.00, showing a 5% upside [6]. - Tesla (TSLA) is currently priced at $241.37 with a target price of $120.00, indicating a -50% downside [6]. - Rivian (RIVN) has a price of $11.60 with a target price of $11.00, reflecting a -5% downside [6]. Global Auto Parts Suppliers Valuation Metrics - The average EV/EBITDA for US auto parts suppliers is projected at 1.8x for 2024, with a corresponding EBITDA margin of 12% [22]. - Aptiv (APTV) is rated "Overweight" with a current price of $51.71 and a target price of $102, indicating a 97% upside [22]. - Borg Warner (BWA) is rated "Overweight" with a price of $26.45 and a target price of $46, representing a 74% upside [22]. - Lear Corp (LEA) is rated "Overweight" with a price of $79.42 and a target price of $140, indicating a 76% upside [22]. Performance Metrics - The report indicates that the average revenue CAGR for US auto parts suppliers is projected to be 2% from 2023 to 2025 [74]. - The EBITDA margin for US auto parts suppliers is expected to be around 12% in 2025, with some companies showing higher margins [74][83]. - The report also highlights the financial returns of various suppliers, with some companies achieving significant returns on invested capital (ROIC) [54][56].

Company Overview - Penske Automotive (PAG) is headquartered in Bloomfield Hills and operates in the Retail-Wholesale sector [3] - The stock has experienced a price change of -0.41% since the beginning of the year [3] Dividend Information - Penske Automotive currently pays a dividend of $1.22 per share, resulting in a dividend yield of 3.21%, significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.25% and the S&P 500's yield of 1.69% [3] - The company's annualized dividend of $4.88 has increased by 19.3% from the previous year [4] - Over the past five years, Penske Automotive has raised its dividend five times, achieving an average annual increase of 30.89% [4] - The current payout ratio is 35%, indicating that the company pays out 35% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year, Penske Automotive anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 at $13.81 per share, reflecting a 0.51% increase from the previous year [5] Investment Considerations - Penske Automotive is viewed as a compelling investment opportunity due to its strong dividend performance and current Zacks Rank of 3 (Hold) [7]

Group 1 - Paralyzed Veterans of America (PVA) received a donation of $1.13 million from Penske Automotive Group, which includes contributions from customers, partners, and employees, as well as matching contributions from the company [1][2] - Since the partnership began in 2015, Penske Automotive Group and its stakeholders have contributed over $10 million to PVA, demonstrating a long-term commitment to supporting veterans with spinal cord injuries and diseases [2][3] - The funds will be utilized to provide veterans with the benefits they earned, specialized healthcare, and career opportunities, ensuring they can live independent and productive lives [1][2] Group 2 - PVA is a 501(c)(3) non-profit organization dedicated to serving veterans with spinal cord injuries or diseases, ensuring they receive the benefits earned through their service [4] - The organization also focuses on advocacy, monitoring care in VA spinal cord injury units, and funding research for improved care and potential cures for paralysis [4][5] - PVA operates more than 70 offices and 33 chapters across the United States, serving veterans, their families, and caregivers [5] Group 3 - Penske Automotive Group, headquartered in Bloomfield Hills, Michigan, is a diversified international transportation services company and a leading retailer of automotive and commercial trucks [6] - The company operates dealerships in multiple countries, including the United States, Canada, and several European and Asian nations, employing over 28,900 people worldwide [6] - Penske Automotive Group is a member of several major stock indices, including the S&P Mid Cap 400 and Fortune 500, indicating its significant presence in the market [6]

Company Overview - Penske Automotive (PAG) is headquartered in Bloomfield Hills and operates in the Retail-Wholesale sector, with a year-to-date price change of -2.66% [3] - The company currently pays a dividend of $1.22 per share, resulting in a dividend yield of 3.29%, significantly higher than the Automotive - Retail and Wholesale industry's yield of 0.26% and the S&P 500's yield of 1.57% [3] Dividend Performance - Penske Automotive's annualized dividend of $4.88 has increased by 19.3% compared to the previous year [4] - Over the past five years, the company has raised its dividend five times, achieving an average annual increase of 26.65% [4] - The current payout ratio stands at 35%, indicating that the company distributes 35% of its trailing 12-month earnings per share as dividends [4] Earnings Outlook - The Zacks Consensus Estimate projects earnings for fiscal year 2025 to be $13.78 per share, reflecting a 0.29% increase from the previous year [5] Investment Considerations - Penske Automotive is considered a strong dividend investment opportunity, particularly appealing to income investors due to its robust dividend yield and growth potential [7]

Revenue and Sales Performance - In 2024, the company generated total revenue of $30.5 billion, with $26.2 billion from retail automotive dealerships, $3.5 billion from retail commercial truck dealerships, and $777.9 million from commercial vehicle distribution and other operations[13]. - The company retailed and wholesaled over 594,000 vehicles in 2024, with 72% of retail automotive franchised dealership revenue coming from premium brands[14]. - Retail commercial truck dealerships accounted for 11.6% of total revenues and 11.7% of total gross profit in 2024, with 20,947 new and used trucks sold[17]. - In 2024, the company retailed over 244,990 new vehicles, generating 46.1% of retail automotive dealership revenue and 27.0% of gross profit[32]. - The company retailed 246,608 used vehicles in 2024, contributing 33.5% of retail automotive dealership revenue and 10.7% of gross profit[34]. - Finance and insurance sales accounted for 3.1% of retail automotive dealership revenue and 19.1% of gross profit in 2024[35]. - Service and parts sales represented 11.7% of retail automotive dealership revenue and 41.7% of gross profit in 2024[38]. - Fleet and wholesale sales made up 5.6% of retail automotive dealership revenue and 1.5% of gross profit in 2024[40]. - The retail automotive dealership market in the U.S. was approximately $1.2 trillion, with 16.0 million new cars and light trucks sold in 2024, a 2.5% increase from 2023[60]. - Used vehicle sales in the U.S. reached approximately 36.8 million units in 2024, up from 35.9 million in the previous year[62]. Operational Insights - The company operates 353 retail automotive franchised dealerships, with 148 in the U.S. and 205 outside the U.S.[14]. - The company’s diversified revenue streams help mitigate the cyclicality historically found in the automotive sector[28]. - The company holds a 28.9% ownership interest in Penske Truck Leasing Co., L.P., which offers a broad range of logistics services[52]. - PTS manages a fleet of approximately 435,000 trucks, tractors, and trailers, with an average full-service leasing Class 8 tractor fleet age of about 3.4 years as of December 31, 2024[53]. - PTS operates approximately 930 locations to provide full-service truck leasing, truck rental, and contract maintenance services[55]. - The company has implemented AI-driven technologies at certain dealerships to enhance customer experience, including a voice assistant for service calls[69]. - The company focuses on a data-driven digital strategy to enhance customer engagement and streamline vehicle purchasing and service scheduling[68]. Financial Performance - Gross profit for 2024 was $5.0 billion, comprising $4.3 billion from retail automotive dealerships, $584.5 million from retail commercial truck dealerships, and $178.2 million from commercial vehicle distribution and other operations[208]. - The company expects to continue paying comparable cash dividends, having announced a cash dividend of $1.22 per share payable on March 6, 2025[195]. - As of December 31, 2024, the company had $156.8 million remaining for share repurchases under its securities repurchase program[198]. - The cumulative total return for Penske Automotive Group, Inc. was 335.24% from December 31, 2019, to December 31, 2024[204]. Market Trends and Competition - U.S. industry new light vehicle sales increased by 2.5% to 16.0 million units in 2024, with expectations for growth to 16.2 million units in 2025[22]. - North American sales of Class 6-8 medium- and heavy-duty trucks decreased by 3.0% to 473,159 units in 2024[25]. - The company faces competition in the used vehicle market, which sells approximately 36.8 million units annually in the U.S.[80]. - The company competes with a variety of financial institutions for vehicle financing, including banks and local credit unions[79]. - The company is subject to increased competition from online retailers and new entrants in the automotive market, which could adversely affect market share and profitability[140]. Regulatory and Compliance Risks - The company is subject to numerous environmental laws and regulations, which may require significant capital and operating expenditures for compliance[97]. - The company has a proactive strategy for environmental, health, and safety compliance, including regular inspections of facilities[100]. - The U.S. Environmental Protection Agency has set standards requiring vehicle manufacturers to achieve an industry-wide average target of 85 grams of carbon dioxide per mile for light-duty vehicles by model year 2032, a nearly 50% reduction from the 2026 standard[103]. - The European Parliament mandates a 55% reduction in emissions for new cars by 2030 and aims for zero carbon emissions by 2035, effectively banning new gasoline and diesel vehicles[105]. - The company is subject to operational risks from geopolitical conditions, which can affect vehicle supply chains and overall market performance[118]. - The status of emission regulations remains uncertain due to potential changes in federal policies, including the rescinding of California's zero-emission vehicle regulations[111]. - The company is subject to multiple sets of climate-related financial disclosure regulations, which may result in additional compliance costs and risks[168]. Cybersecurity and Information Systems - The company has implemented a comprehensive Information Security Program, including annual cybersecurity risk assessments and multi-layered preventive controls[182]. - The Board of Directors oversees cybersecurity threats as a critical component of overall risk management, with regular updates provided during meetings[186]. - The Chief Information Officer, with over 25 years of experience, is responsible for implementing and overseeing the Information Security Program[187]. - A cybersecurity incident involving CDK Global impacted the company's Premier Truck Group business, leading to a temporary disruption in operations[175]. - The company relies heavily on third-party vendors for its information systems, which are critical for operations, including customer relationship management and financial reporting[173]. Financial Obligations and Risks - The company has $4.0 billion in floor plan notes payable, $1.9 billion in non-vehicle long-term debt, and $5.3 billion in future lease commitments, indicating significant financial obligations[145]. - The company faces risks related to a concentrated customer base and the financial health of its customers, which could affect sales and profitability[130]. - The company retains substantial risk related to general liability, workers' compensation, and property insurance, potentially leading to significant claims and losses[113]. - The introduction of shares from Penske Corporation's pledged stock could materially adversely affect the company's stock price[172]. Employee and Workplace Insights - As of December 31, 2024, the company employed approximately 28,900 people, with about 683 covered by collective bargaining agreements[90]. - The company achieved a turnover rate of approximately 20%, which is below industry averages[92]. - In 2024, 79 of the company's dealerships were recognized in the "Automotive News Best Dealerships To Work For," including nine of the top ten spots nationally[89].

Core Insights - Penske Automotive Group (PAG) reported fourth-quarter 2024 adjusted earnings of $3.54 per share, a 2.6% increase year over year, surpassing the Zacks Consensus Estimate of $3.37 [1] - The company achieved net sales of $7.72 billion, exceeding the Zacks Consensus Estimate of $7.56 billion, and reflecting a 6.2% increase from the previous year [1] Financial Performance - Gross profit for the quarter rose 6.1% year over year to $1.26 billion, while operating income expanded 25.6% to $333.8 million [2] - Foreign currency exchange positively impacted revenues by $57 million, net income by $1 million, and earnings per share by 1 cent [2] - SG&A costs totaled $886 million, up 6.1% year over year [7] Segment Performance - Retail Automotive segment revenues increased 8.8% year over year to $6.72 billion, surpassing the Zacks Consensus Estimate of $6.4 billion [4] - Same-store retail units declined 2% year over year to 102,542, but same-store new-vehicle revenues rose 7.2% to $3.16 billion [3] - Retail Commercial Truck segment revenues decreased 14.5% to $774 million, falling short of the consensus estimate of $968 million [5] - The Commercial Vehicle Distribution and Other segment's revenues increased 18.3% to $224 million, exceeding the estimate of $199 million [6] Shareholder Actions - PAG repurchased 0.4 million shares of common stock for $58.7 million, with $156.8 million of stock repurchase authorization remaining outstanding [8] - The company increased its dividend by 2.5% to $1.22 per share, marking the 17th consecutive quarterly increase [8] Debt and Cash Position - As of December 31, 2024, Penske had cash and cash equivalents of $72.4 million, down from $96.4 million a year earlier [7] - Long-term debt decreased to $1.13 billion from $1.42 billion as of December 31, 2023 [7]