AutoNation's Buybacks Have Been A Game-Changer

Oct. 18, 2022 12:10 PM ETAutoNation, Inc. (AN)KMX8 Comments
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Summary

  • While AutoNation, Inc. shares are down, other car dealers have performed worse, but I expect the company to report differentiated results next week.
  • AutoNation's diversified revenue streams insulate it from normalization in used car prices.
  • Having bought back 1/4 of the company and with share repurchases ongoing, EPS will be held relatively well, even as results normalize.
  • With my base-case 2023 EPS of $12, AutoNation shares are just 8.5x earnings, making the stock a buy.

AutoNation Reports Quarterly Earnings

Mario Tama

Shares of AutoNation, Inc. (NYSE:AN) have lost about 13% of their value over the past year; not a great result, but certainly far better than competitors like CarMax, Inc. (KMX), which have been halved. Following

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Over ten years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an article, just let me know!

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in AN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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