AutoNation Reports Q4 Earnings with Mixed Results
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4d ago
0mins
Should l Buy AN?
Source: seekingalpha
AutoNation Inc's stock rose 7.00% as it reached a 5-day high amid positive market conditions, with the Nasdaq-100 and S&P 500 both up over 1%.
The company's Q4 2025 earnings report revealed a non-GAAP EPS of $5.08, exceeding expectations by $0.20, despite a 4.3% decline in revenue to $6.93 billion. This performance indicates effective cost management strategies, although the revenue miss reflects challenges from market competition and fluctuating consumer demand. Additionally, AutoNation's share buyback plan aims to enhance shareholder value, demonstrating confidence in future growth prospects.
The mixed results highlight AutoNation's resilience in profitability, but the revenue decline raises concerns about market demand. Investors will be closely monitoring the company's strategies moving forward, especially in light of the competitive landscape.
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Analyst Views on AN
Wall Street analysts forecast AN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AN is 250.13 USD with a low forecast of 220.00 USD and a high forecast of 300.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
6 Buy
2 Hold
0 Sell
Strong Buy
Current: 204.020
Low
220.00
Averages
250.13
High
300.00
Current: 204.020
Low
220.00
Averages
250.13
High
300.00
About AN
AutoNation, Inc., through its subsidiaries, is an automotive retailer in the United States. Its segments include Domestic, Import, Premium Luxury, and AutoNation Finance. The Domestic segment is comprised of retail automotive franchises that sell new vehicles manufactured by Ford, General Motors, and Stellantis. The Import segment is primarily comprised of retail automotive franchises that sell new vehicles manufactured by Toyota, Honda, Hyundai, Subaru, and Nissan. The Premium Luxury segment is primarily comprised of retail automotive franchises that sell new vehicles manufactured by Mercedes-Benz, BMW, Lexus, Audi, and Jaguar Land Rover. The franchises in each of its Domestic, Import, and Premium Luxury segments also sell used vehicles, parts and automotive services, and automotive finance and insurance products. The AutoNation Finance segment is comprised of its captive auto finance company, which provides indirect financing to qualified retail customers on vehicles it sells.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AutoNation Reports Q4 2025 Earnings with Mixed Results
- Revenue Growth: AutoNation reported total revenue of $6.9 billion for Q4 2025, a 9% decline year-over-year, yet achieved a 3% increase in annual revenue to $27.6 billion, demonstrating resilience in a challenging market environment.
- Adjusted Net Income: The adjusted net income for Q4 was $186 million, down 6.5% from the previous year, but the annual adjusted net income increased by 8% to $770 million, indicating effective cost control and operational optimization.
- Cash Flow and Buybacks: The company generated over $1 billion in adjusted free cash flow and reduced its share count by 10% through $785 million in stock repurchases, enhancing the potential for earnings per share growth, which rose by 16% year-over-year to $20.22.
- Market Outlook: Management anticipates a slight decline in the market for 2026, although they expect stable new vehicle profitability and continued growth in aftersales and finance, reflecting a cautiously optimistic outlook for the future.
See More
U.S. Stocks Rise, AutoNation Shares Surge
- Market Performance: U.S. stocks traded higher midway through trading, with the S&P 500 gaining approximately 1.6%, the Dow rising 2.01% to 49,891.59, and the NASDAQ climbing 1.84% to 22,954.50, indicating a positive market sentiment and increased investor confidence.
- Sector Dynamics: Information technology shares gained 2.5% on Friday, while communication services stocks fell by 2%, reflecting a preference for tech stocks and concerns over the communication sector, which may impact future performance of related companies.
- AutoNation Earnings: Shares of AutoNation, Inc. (NYSE:AN) surged over 7% after posting fourth-quarter results, reporting adjusted earnings per share of $5.08, a 2% year-over-year increase that beat analyst expectations of $4.85, despite sales of $6.929 billion missing the consensus estimate of $7.200 billion, showcasing the company's resilience in profitability.
- Economic Indicators: The U.S. Manheim Used Vehicle Value Index rose 2.4% month-over-month in January, while the University of Michigan's consumer sentiment index increased by 0.9 points to 57.3, exceeding market estimates of 55, indicating a rebound in consumer confidence that could positively influence future spending.
See More
AutoNation Sales Miss Consensus Estimates Amid Declining Unit Sales
- Sales Decline: AutoNation reported quarterly sales of $6.929 billion, missing the consensus estimate of $7.200 billion, reflecting a 4% year-over-year decline primarily due to lower unit sales of both new and used vehicles, indicating weakened market demand.
- Gross Profit Drop: Quarterly gross profit fell 2% year-over-year to $1.214 billion, with same-store gross profit declining 4% to $1.188 billion, driven by lower vehicle unit sales and profit per unit, highlighting pressure on profitability.
- Share Buyback: The company repurchased 1.7 million shares for $350 million at an average price of $209 per share during the quarter, and a total of $785 million in 2025, resulting in a 10% reduction in shares outstanding, aimed at enhancing earnings per share.
- Financial Services Growth: Customer Financial Services posted an 8% growth in unit profitability for the quarter, demonstrating strong performance in after-sales and financial services, as CEO Mike Manley emphasized ongoing investments to deliver shareholder returns.
See More
AutoNation Surpasses Q2 Earnings Estimates Significantly
- Revenue Performance: AutoNation reported Q2 revenue of $6.9 billion, a 4.3% year-over-year decline primarily due to a 5% drop in new and used vehicle sales, although after-sales revenue increased, indicating resilience in challenging market conditions.
- Profitability Metrics: Same-store gross profit fell 4% to $1.19 billion, with adjusted operating income down 7% to $335.1 million; however, the earnings per share of $5.08 exceeded the consensus estimate of $4.88, reflecting relative stability in profitability.
- Financial Health: As of December 31, AutoNation had $1.8 billion in liquidity, including $63 million in cash and $1.7 billion in available credit, with a leverage ratio of 2.44, demonstrating the company's financial robustness and ability to navigate market fluctuations.
- Share Buyback: In Q4, AutoNation repurchased 1.7 million shares of common stock for a total of $350 million at an average price of $209 per share, indicating the company's commitment to enhancing shareholder value and boosting market confidence.
See More
AutoNation Reports Q4 2025 Earnings with Mixed Results
- Earnings Beat: AutoNation's Q4 2025 non-GAAP EPS of $5.08 exceeded expectations by $0.20, demonstrating resilience in profitability despite overall revenue decline, which indicates effective cost management strategies.
- Revenue Decline: The company's revenue for Q4 stood at $6.93 billion, a 4.3% year-over-year decrease, missing market expectations by $310 million, reflecting challenges from intensified market competition and fluctuating consumer demand.
- Strong Cash Flow: Operating activities generated $112 million in cash, with adjusted free cash flow exceeding $1 billion, showcasing effective cash management that supports future investments and shareholder returns.
- Share Buyback Plan: AutoNation plans to repurchase $785 million in shares in 2025, representing a 10% reduction in outstanding shares, aimed at enhancing EPS and shareholder value, reflecting the company's confidence in future growth prospects.
See More
Movers in the Market: Amazon, Novo Nordisk, Molina, Roblox, Hub Group, and Others
- Stock Market Movement: Stock futures increased on Friday despite concerns regarding artificial intelligence spending.
- Big Tech Earnings Impact: Recent earnings reports from major technology companies did not alleviate fears related to AI investments.
See More
AutoNation Reports Q4 2025 Earnings with Mixed Results
- Revenue Growth: AutoNation reported total revenue of $6.9 billion for Q4 2025, a 9% decline year-over-year, yet achieved a 3% increase in annual revenue to $27.6 billion, demonstrating resilience in a challenging market environment.
- Adjusted Net Income: The adjusted net income for Q4 was $186 million, down 6.5% from the previous year, but the annual adjusted net income increased by 8% to $770 million, indicating effective cost control and operational optimization.
- Cash Flow and Buybacks: The company generated over $1 billion in adjusted free cash flow and reduced its share count by 10% through $785 million in stock repurchases, enhancing the potential for earnings per share growth, which rose by 16% year-over-year to $20.22.
- Market Outlook: Management anticipates a slight decline in the market for 2026, although they expect stable new vehicle profitability and continued growth in aftersales and finance, reflecting a cautiously optimistic outlook for the future.
See More
U.S. Stocks Rise, AutoNation Shares Surge
- Market Performance: U.S. stocks traded higher midway through trading, with the S&P 500 gaining approximately 1.6%, the Dow rising 2.01% to 49,891.59, and the NASDAQ climbing 1.84% to 22,954.50, indicating a positive market sentiment and increased investor confidence.
- Sector Dynamics: Information technology shares gained 2.5% on Friday, while communication services stocks fell by 2%, reflecting a preference for tech stocks and concerns over the communication sector, which may impact future performance of related companies.
- AutoNation Earnings: Shares of AutoNation, Inc. (NYSE:AN) surged over 7% after posting fourth-quarter results, reporting adjusted earnings per share of $5.08, a 2% year-over-year increase that beat analyst expectations of $4.85, despite sales of $6.929 billion missing the consensus estimate of $7.200 billion, showcasing the company's resilience in profitability.
- Economic Indicators: The U.S. Manheim Used Vehicle Value Index rose 2.4% month-over-month in January, while the University of Michigan's consumer sentiment index increased by 0.9 points to 57.3, exceeding market estimates of 55, indicating a rebound in consumer confidence that could positively influence future spending.
See More
AutoNation Sales Miss Consensus Estimates Amid Declining Unit Sales
- Sales Decline: AutoNation reported quarterly sales of $6.929 billion, missing the consensus estimate of $7.200 billion, reflecting a 4% year-over-year decline primarily due to lower unit sales of both new and used vehicles, indicating weakened market demand.
- Gross Profit Drop: Quarterly gross profit fell 2% year-over-year to $1.214 billion, with same-store gross profit declining 4% to $1.188 billion, driven by lower vehicle unit sales and profit per unit, highlighting pressure on profitability.
- Share Buyback: The company repurchased 1.7 million shares for $350 million at an average price of $209 per share during the quarter, and a total of $785 million in 2025, resulting in a 10% reduction in shares outstanding, aimed at enhancing earnings per share.
- Financial Services Growth: Customer Financial Services posted an 8% growth in unit profitability for the quarter, demonstrating strong performance in after-sales and financial services, as CEO Mike Manley emphasized ongoing investments to deliver shareholder returns.
See More
AutoNation Surpasses Q2 Earnings Estimates Significantly
- Revenue Performance: AutoNation reported Q2 revenue of $6.9 billion, a 4.3% year-over-year decline primarily due to a 5% drop in new and used vehicle sales, although after-sales revenue increased, indicating resilience in challenging market conditions.
- Profitability Metrics: Same-store gross profit fell 4% to $1.19 billion, with adjusted operating income down 7% to $335.1 million; however, the earnings per share of $5.08 exceeded the consensus estimate of $4.88, reflecting relative stability in profitability.
- Financial Health: As of December 31, AutoNation had $1.8 billion in liquidity, including $63 million in cash and $1.7 billion in available credit, with a leverage ratio of 2.44, demonstrating the company's financial robustness and ability to navigate market fluctuations.
- Share Buyback: In Q4, AutoNation repurchased 1.7 million shares of common stock for a total of $350 million at an average price of $209 per share, indicating the company's commitment to enhancing shareholder value and boosting market confidence.
See More
AutoNation Reports Q4 2025 Earnings with Mixed Results
- Earnings Beat: AutoNation's Q4 2025 non-GAAP EPS of $5.08 exceeded expectations by $0.20, demonstrating resilience in profitability despite overall revenue decline, which indicates effective cost management strategies.
- Revenue Decline: The company's revenue for Q4 stood at $6.93 billion, a 4.3% year-over-year decrease, missing market expectations by $310 million, reflecting challenges from intensified market competition and fluctuating consumer demand.
- Strong Cash Flow: Operating activities generated $112 million in cash, with adjusted free cash flow exceeding $1 billion, showcasing effective cash management that supports future investments and shareholder returns.
- Share Buyback Plan: AutoNation plans to repurchase $785 million in shares in 2025, representing a 10% reduction in outstanding shares, aimed at enhancing EPS and shareholder value, reflecting the company's confidence in future growth prospects.
See More
Movers in the Market: Amazon, Novo Nordisk, Molina, Roblox, Hub Group, and Others
- Stock Market Movement: Stock futures increased on Friday despite concerns regarding artificial intelligence spending.
- Big Tech Earnings Impact: Recent earnings reports from major technology companies did not alleviate fears related to AI investments.
See More
