Sonic Automotive (SAH): Revisiting Valuation After Recent Share Price Rebound

Sonic Automotive (SAH) has quietly pulled ahead in recent trading, with the stock up about 7% over the past month even as its past 3 months performance remains weak.

See our latest analysis for Sonic Automotive.

That recent 1 month share price return of 7.23 percent has only just begun to offset a softer 90 day share price return of negative 16.59 percent. However, longer term total shareholder returns above 40 percent over three years suggest the broader story is still constructive around 66.6 dollars.

If Sonic’s move has you reassessing the auto space, it might be worth seeing how other auto manufacturers are shaping up as potential opportunities.

With shares still trading below analyst targets and three year returns strong despite recent volatility, the key question now is whether Sonic Automotive is quietly undervalued or if the market is already pricing in its next leg of growth.

Most Popular Narrative Narrative: 14.7% Undervalued

At a last close of 66.60 dollars versus a narrative fair value near 78 dollars, Sonic Automotive is framed as modestly mispriced with room for upside.

Expansion and enhancement of EchoPark Sonic's used vehicle platform is positioned to capitalize on the growing U.S. vehicle parc and a high-growth, higher-margin used car market, improved access to lease returns in 2026 to 2028 is expected to drive volume and earnings growth at EchoPark, directly boosting overall company revenue and EBITDA.

Read the complete narrative.

Curious how a mature auto retailer gets this kind of upside narrative? The explanation is a powerful mix of margin gains, recurring revenue and re-rated earnings.

Result: Fair Value of $78.10 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, longer term upside relies on resilient service demand and dealer relevance. Both of these could be pressured by faster EV adoption and direct to consumer sales.

Find out about the key risks to this Sonic Automotive narrative.

Build Your Own Sonic Automotive Narrative

If this perspective does not quite fit your view, or you prefer to dig into the numbers yourself, you can build a custom narrative in just minutes: Do it your way

A great starting point for your Sonic Automotive research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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