Sonic Automotive (NYSE:SAH) Shares Gap Down on Disappointing Earnings

Sonic Automotive, Inc. (NYSE:SAH)’s stock price gapped down prior to trading on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $58.28, but opened at $54.11. Sonic Automotive shares last traded at $60.78, with a volume of 130,506 shares changing hands.

The company reported $1.52 EPS for the quarter, missing the consensus estimate of $1.53 by ($0.01). Sonic Automotive had a return on equity of 21.56% and a net margin of 0.78%.The business had revenue of $3.87 billion for the quarter, compared to the consensus estimate of $3.94 billion. During the same period in the previous year, the firm earned $1.51 EPS. The company’s revenue was down .6% on a year-over-year basis.

Sonic Automotive Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Wednesday, April 15th. Investors of record on Friday, March 13th will be paid a $0.38 dividend. The ex-dividend date is Friday, March 13th. This represents a $1.52 annualized dividend and a dividend yield of 2.4%. Sonic Automotive’s dividend payout ratio is presently 41.08%.

Sonic Automotive News Summary

Here are the key news stories impacting Sonic Automotive this week:

• Positive Sentiment: Large insider accumulation — Paul P. Rusnak bought multiple blocks of shares in February (totaling tens of thousands across filings), increasing his stake to ~5.1M shares; repeated buys from a major holder tend to support sentiment. SEC Filing: Insider Purchases
• Positive Sentiment: Dividend declared — Sonic announced a quarterly dividend of $0.38/share (ex-dividend March 13; payable April 15), implying a ~2.4% yield and a ~41% payout ratio that can attract income-oriented buyers.
• Positive Sentiment: Record gross profit flagged on the call — Management highlighted record gross profit in Q4, supporting a margin-recovery narrative despite top-line pressure. Investing.com: Record Gross Profit
• Neutral Sentiment: Earnings materials available — Slides and the full earnings call transcript are posted for deeper analysis of F&I, used-vehicle trends and inventory; analysts will parse these for guidance and margin drivers. Earnings Call Transcript
• Neutral Sentiment: Analyst mix — Needham reaffirmed a Buy and a $90 target (large upside vs. current levels), showing bullish conviction from some desks. Benzinga: Needham Reaffirmation
• Negative Sentiment: Q4 slight miss — Sonic reported $1.52 EPS (missed consensus by $0.01) and revenues of $3.87B (below estimates ~ $3.94B), with revenue down ~0.6% YoY and low net margins (~0.9%); this gives short-term bearish talking points on demand. Zacks: Q4 Miss
• Negative Sentiment: Price-target trim by Stephens — Stephens cut its target to $67 and set an Equal Weight rating, which is a near-term headwind for sentiment versus higher targets. The Fly: Stephens Cut

Analyst Ratings Changes

SAH has been the topic of a number of recent research reports. Stephens cut their target price on Sonic Automotive from $68.00 to $67.00 and set an “equal weight” rating on the stock in a research note on Thursday. Wall Street Zen cut shares of Sonic Automotive from a “buy” rating to a “hold” rating in a research note on Sunday, January 11th. Citigroup raised shares of Sonic Automotive from a “neutral” rating to a “buy” rating and set a $82.00 price objective on the stock in a research report on Thursday, November 6th. JPMorgan Chase & Co. decreased their target price on shares of Sonic Automotive from $70.00 to $67.00 and set an “underweight” rating for the company in a report on Friday, January 16th. Finally, Barclays dropped their target price on shares of Sonic Automotive from $71.00 to $69.00 and set an “equal weight” rating on the stock in a research note on Wednesday, January 21st. Four analysts have rated the stock with a Buy rating, five have given a Hold rating and one has given a Sell rating to the company’s stock. According to MarketBeat.com, Sonic Automotive currently has an average rating of “Hold” and a consensus price target of $77.75.

Insider Transactions at Sonic Automotive

In related news, major shareholder Paul P. Rusnak purchased 48,540 shares of the company’s stock in a transaction dated Friday, February 13th. The shares were purchased at an average price of $59.92 per share, with a total value of $2,908,516.80. Following the acquisition, the insider directly owned 5,088,519 shares in the company, valued at $304,904,058.48. The trade was a 0.96% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. In the last quarter, insiders have bought 100,000 shares of company stock worth $5,994,472. 42.65% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Y Intercept Hong Kong Ltd purchased a new stake in Sonic Automotive in the third quarter worth about $647,000. Jackson Creek Investment Advisors LLC grew its stake in shares of Sonic Automotive by 311.2% during the 3rd quarter. Jackson Creek Investment Advisors LLC now owns 23,571 shares of the company’s stock valued at $1,794,000 after acquiring an additional 17,839 shares during the period. CWA Asset Management Group LLC purchased a new stake in Sonic Automotive in the 3rd quarter worth approximately $2,006,000. Bryce Point Capital LLC bought a new stake in Sonic Automotive during the 2nd quarter worth approximately $793,000. Finally, Brandywine Global Investment Management LLC lifted its holdings in Sonic Automotive by 30.3% during the second quarter. Brandywine Global Investment Management LLC now owns 94,468 shares of the company’s stock valued at $7,551,000 after purchasing an additional 21,960 shares in the last quarter. Institutional investors own 46.92% of the company’s stock.

Sonic Automotive Trading Up 2.6%

The stock’s 50-day simple moving average is $62.58 and its two-hundred day simple moving average is $68.89. The company has a debt-to-equity ratio of 1.68, a current ratio of 1.02 and a quick ratio of 0.27. The firm has a market capitalization of $2.21 billion, a P/E ratio of 19.04 and a beta of 0.93.

Sonic Automotive Company Profile

Sonic Automotive, Inc is a publicly traded automotive retailer that operates a network of franchised new-car dealerships and used-vehicle dealerships across the United States. Headquartered in Charlotte, North Carolina, the company offers a range of services that include vehicle sales, leasing, finance and insurance products, service and parts, and collision repair. Sonic Automotive’s dealerships represent numerous major automotive brands, and the company also markets a broad selection of pre-owned vehicles under its own banner.

In addition to its core dealership operations, Sonic Automotive has developed digital retail capabilities that allow customers to research, shop and complete transactions online.