Recent News
On September 18, 2025 Benchmark raised its price target on Sonic Automotive to $85 while citing EchoPark’s improving profitability and planned location growth.
The company opened a new EchoPark delivery center in Huntsville, Alabama, adding to the EchoPark footprint as management continues its stated push toward broader national coverage.
Sonic announced an operational realignment that temporarily suspends eight EchoPark locations to reallocate inventory to higher-demand markets and reduce expenses as management adapts to pre-owned market volatility.
EchoPark relocated and expanded its Houston Southwest Freeway experience center to a larger facility, increasing local inventory capacity and customer experience footprint.
Technical Analysis
ADX at 28.97 indicates strong trend strength, supporting the case for a directional move rather than chop toward the near-term valuation. Directional indicators show DI+ increasing and DI- decreasing, a bullish alignment that favors upward price bias relative to the current valuation.
MACD at -1.43 has been increasing and recently crossed above its signal line (-2.07), which signals improving momentum despite MACD remaining below zero; this implies a shift from negative momentum toward bullish momentum that can fuel a short-term recovery into resistance.
MRO at -32.44 and increasing implies price sits materially below the modeled target and carries measurable upward potential as the oscillator converges toward zero.
RSI at 42.23 and increasing demonstrates rebuilding buying pressure without reaching overbought territory, allowing room for further gains before momentum extremes constrain upside.
Price sits above the 12-day EMA (price12dayEMA 62.73) and the 20-day average (62.39) while remaining below the 50-day (67.83) and 200-day (70.37) averages; that structure supports a tactical rally into near-term resistance near the 50-day and the superTrend upper band at $65.29, with larger trend hurdles near the 200-day average. Ichimoku Tenkan (62.28) and Kijun (63.16) levels lie below the close, reinforcing the short-term bullish technical posture.
Fundamental Analysis
Revenue totaled $3,657,200,000 with gross profit of $602,200,000, producing a gross margin of 16.47% (+6.16 percentage points QoQ and +5.46 percentage points YoY). Operating income reads $149,100,000 for an operating margin of 4.08%, which improved QoQ by 3.74 percentage points and improved YoY by 33.06% in percentage terms, indicating operating leverage from revenue mix and fixed-operations gains.
EBIT stands at -$24,800,000, translating to an EBIT margin of -0.68%, which sits well below the industry peer mean EBIT margin of 13.09% and the industry peer median of 14.21%. EBIT margin declined QoQ by 117.25% and declined YoY by 122.13%, highlighting a drag from non-operating items and interest expense that suppressed earnings before interest and taxes relative to core operations.
Net income totaled -$45,600,000 and diluted EPS came in at $1.41 versus an estimate of $1.74, producing an EPS surprise of -18.97%. Forward EPS reads $1.54 with a forward P/E of 45.41, while the current reported P/E equals 34.45. PEG stands at 0.72 and forward PEG at 0.95, indicating the market is pricing longer-term growth expectations into multiples despite current earnings volatility.
Balance sheet and leverage show total debt of $4,164,300,000, net debt of $3,405,500,000, debt-to-assets 70.22%, and debt-to-equity 4.04x (404%). Interest expense totaled $44,300,000 and interest coverage remains negative at -55.98%, reflecting current earnings insufficiency to cover interest and elevating sensitivity to interest costs despite a low reported cost of debt at 0.712%.
Liquidity metrics reveal current ratio 1.03 and quick ratio 0.24 with cash and short-term investments at $110,400,000; working capital sits positive at $70,600,000. Cash conversion cycle 65.28 days exceeds the industry peer mean of 9.41 days, indicating slower cash conversion relative to peers and heavier working capital tied up in inventory cycles.
Free cash flow measured $102,700,000 with a free cash flow yield of 3.89% and a free cash flow decline QoQ and YoY; cash flow to earnings sits at 314.47%, driven by non-cash charges and timing differences. Return on equity registers -4.43% and return on assets -0.77%, both negative as the company navigates a capital-intensive recovery phase.
Valuation context: WMDST values the stock as under-valued. Current market multiples (P/E 34.45, P/B 2.56) embed a mix of recovery expectations for EchoPark and balance-sheet leverage. EchoPark operational adjustments and expansion initiatives should influence mid-cycle profitability assumptions; investors who model recovery-driven cash flows should reconcile elevated leverage and interest coverage constraints when updating valuation scenarios.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-06-30 |
| REPORT DATE: | 2025-10-23 |
| NEXT REPORT DATE: | 2026-01-22 |
| CASH FLOW | Begin Period Cash Flow | $ 64.6 M |
| Operating Cash Flow | $ 136.8 M | |
| Capital Expenditures | $ -34.10 M | |
| Change In Working Capital | $ 16.3 M | |
| Dividends Paid | $ -11.90 M | |
| Cash Flow Delta | $ 45.8 M | |
| End Period Cash Flow | $ 110.4 M | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 3.7 B | |
| Forward Revenue | $ -1.05 B | |
| COSTS | ||
| Cost Of Revenue | $ 3.1 B | |
| Depreciation | $ 35.0 M | |
| Depreciation and Amortization | $ 35.0 M | |
| Research and Development | — | |
| Total Operating Expenses | $ 3.5 B | |
| PROFITABILITY | ||
| Gross Profit | $ 602.2 M | |
| EBITDA | $ 15.7 M | |
| EBIT | $ -24.80 M | |
| Operating Income | $ 149.1 M | |
| Interest Income | $ -1.40 M | |
| Interest Expense | $ 44.3 M | |
| Net Interest Income | $ -45.70 M | |
| Income Before Tax | $ -69.10 M | |
| Tax Provision | $ -23.50 M | |
| Tax Rate | 34.0 % | |
| Net Income | $ -45.60 M | |
| Net Income From Continuing Operations | $ -45.60 M | |
| EARNINGS | ||
| EPS Estimate | $ 1.74 | |
| EPS Actual | $ 1.41 | |
| EPS Difference | $ -0.33 | |
| EPS Surprise | -18.966 % | |
| Forward EPS | $ 1.54 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 5.9 B | |
| Intangible Assets | $ 829.3 M | |
| Net Tangible Assets | $ 200.3 M | |
| Total Current Assets | $ 2.8 B | |
| Cash and Short-Term Investments | $ 110.4 M | |
| Cash | $ 110.4 M | |
| Net Receivables | $ 397.9 M | |
| Inventory | $ 2.1 B | |
| Long-Term Investments | $ 123.3 M | |
| LIABILITIES | ||
| Accounts Payable | $ 173.0 M | |
| Short-Term Debt | $ 2.0 B | |
| Total Current Liabilities | $ 2.7 B | |
| Net Debt | $ 3.4 B | |
| Total Debt | $ 4.2 B | |
| Total Liabilities | $ 4.9 B | |
| EQUITY | ||
| Total Equity | $ 1.0 B | |
| Retained Earnings | $ 1.4 B | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 30.15 | |
| Shares Outstanding | 34.150 M | |
| Revenue Per-Share | $ 107.09 | |
| VALUATION | Market Capitalization | $ 2.6 B |
| Enterprise Value | $ 6.7 B | |
| Enterprise Multiple | 426.249 | |
| Enterprise Multiple QoQ | 1180.072 % | |
| Enterprise Multiple YoY | 1485.822 % | |
| Enterprise Multiple IPRWA | SAH: 426.249 high: 193.836 mean: 59.429 median: 54.088 low: -60.697 |
|
| EV/R | 1.83 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 5.76 | |
| Asset To Liability | 1.21 | |
| Debt To Capital | 0.802 | |
| Debt To Assets | 0.702 | |
| Debt To Assets QoQ | 1.877 % | |
| Debt To Assets YoY | 100.588 % | |
| Debt To Assets IPRWA | high: 1.021 SAH: 0.702 median: 0.525 mean: 0.494 low: 0.116 |
|
| Debt To Equity | 4.045 | |
| Debt To Equity QoQ | 8.937 % | |
| Debt To Equity YoY | 88.047 % | |
| Debt To Equity IPRWA | high: 5.017 SAH: 4.045 median: 0.954 mean: 0.557 low: -3.067 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 2.562 | |
| Price To Book QoQ | 32.15 % | |
| Price To Book YoY | 29.2 % | |
| Price To Book IPRWA | high: 9.42 mean: 3.629 median: 2.613 SAH: 2.562 low: -4.629 |
|
| Price To Earnings (P/E) | 34.448 | |
| Price To Earnings QoQ | -18.214 % | |
| Price To Earnings YoY | -7.781 % | |
| Price To Earnings IPRWA | high: 244.435 mean: 76.908 median: 76.414 SAH: 34.448 low: -147.847 |
|
| PE/G Ratio | 0.718 | |
| Price To Sales (P/S) | 0.721 | |
| Price To Sales QoQ | 24.535 % | |
| Price To Sales YoY | 32.949 % | |
| Price To Sales IPRWA | high: 16.979 mean: 7.161 median: 6.123 SAH: 0.721 low: 0.164 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 45.409 | |
| Forward PE/G | 0.947 | |
| Forward P/S | -2.502 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | -725.818 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.62 | |
| Asset Turnover Ratio QoQ | -0.134 % | |
| Asset Turnover Ratio YoY | 0.581 % | |
| Asset Turnover Ratio IPRWA | high: 0.676 SAH: 0.62 mean: 0.316 median: 0.291 low: 0.086 |
|
| Receivables Turnover | 8.015 | |
| Receivables Turnover Ratio QoQ | 10.918 % | |
| Receivables Turnover Ratio YoY | 0.018 % | |
| Receivables Turnover Ratio IPRWA | high: 93.227 mean: 13.936 median: 8.425 SAH: 8.015 low: 0.318 |
|
| Inventory Turnover | 1.529 | |
| Inventory Turnover Ratio QoQ | -4.986 % | |
| Inventory Turnover Ratio YoY | -4.174 % | |
| Inventory Turnover Ratio IPRWA | high: 3.491 SAH: 1.529 mean: 0.777 median: 0.723 low: 0.204 |
|
| Days Sales Outstanding (DSO) | 11.385 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | 65.279 | |
| Cash Conversion Cycle Days QoQ | 7.963 % | |
| Cash Conversion Cycle Days YoY | 1.868 % | |
| Cash Conversion Cycle Days IPRWA | high: 200.951 SAH: 65.279 median: 11.907 mean: 9.413 low: -94.879 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 51.802 | |
| CapEx To Revenue | -0.009 | |
| CapEx To Depreciation | -0.974 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 2.5 B | |
| Net Invested Capital | $ 4.5 B | |
| Invested Capital | $ 4.5 B | |
| Net Tangible Assets | $ 200.3 M | |
| Net Working Capital | $ 70.6 M | |
| LIQUIDITY | ||
| Cash Ratio | 0.041 | |
| Current Ratio | 1.026 | |
| Current Ratio QoQ | -6.015 % | |
| Current Ratio YoY | -6.723 % | |
| Current Ratio IPRWA | high: 3.829 mean: 1.209 median: 1.047 SAH: 1.026 low: 0.15 |
|
| Quick Ratio | 0.243 | |
| Quick Ratio QoQ | -35.608 % | |
| Quick Ratio YoY | -33.185 % | |
| Quick Ratio IPRWA | high: 2.234 mean: 0.405 SAH: 0.243 median: 0.228 low: 0.074 |
|
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 265.242 | |
| Cost Of Debt | 0.712 % | |
| Interest Coverage Ratio | -0.56 | |
| Interest Coverage Ratio QoQ | -117.984 % | |
| Interest Coverage Ratio YoY | -126.509 % | |
| Interest Coverage Ratio IPRWA | high: 76.11 mean: 14.685 median: 7.924 SAH: -0.56 low: -23.158 |
|
| Operating Cash Flow Ratio | -0.053 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 5.213 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | -3.832 | |
| Dividend Payout Ratio | -0.261 | |
| Dividend Rate | $ 0.35 | |
| Dividend Yield | 0.005 | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 0.931 % | |
| Revenue Growth | 0.162 % | |
| Revenue Growth QoQ | -102.581 % | |
| Revenue Growth YoY | -92.055 % | |
| Revenue Growth IPRWA | high: 50.0 % median: 9.382 % SAH: 0.162 % mean: -0.171 % low: -57.432 % |
|
| Earnings Growth | 47.973 % | |
| Earnings Growth QoQ | -2514.343 % | |
| Earnings Growth YoY | 493.138 % | |
| Earnings Growth IPRWA | high: 250.0 % SAH: 47.973 % median: 25.806 % mean: 15.861 % low: -413.636 % |
|
| MARGINS | ||
| Gross Margin | 16.466 % | |
| Gross Margin QoQ | 6.15 % | |
| Gross Margin YoY | 5.463 % | |
| Gross Margin IPRWA | high: 96.246 % median: 44.264 % mean: 41.284 % SAH: 16.466 % low: 7.163 % |
|
| EBIT Margin | -0.678 % | |
| EBIT Margin QoQ | -117.252 % | |
| EBIT Margin YoY | -122.128 % | |
| EBIT Margin IPRWA | high: 20.408 % median: 14.211 % mean: 13.092 % SAH: -0.678 % low: -21.084 % |
|
| Return On Sales (ROS) | 4.077 % | |
| Return On Sales QoQ | 3.74 % | |
| Return On Sales YoY | 33.061 % | |
| Return On Sales IPRWA | high: 20.656 % median: 14.17 % mean: 13.135 % SAH: 4.077 % low: -21.084 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ 102.7 M | |
| Free Cash Flow Yield | 3.893 % | |
| Free Cash Flow Yield QoQ | -45.4 % | |
| Free Cash Flow Yield YoY | -139.383 % | |
| Free Cash Flow Yield IPRWA | high: 12.388 % SAH: 3.893 % median: 0.623 % mean: 0.352 % low: -30.926 % |
|
| Free Cash Growth | -31.897 % | |
| Free Cash Growth QoQ | -114.132 % | |
| Free Cash Growth YoY | -96.034 % | |
| Free Cash Growth IPRWA | high: 290.52 % median: -2.575 % SAH: -31.897 % mean: -34.716 % low: -376.591 % |
|
| Free Cash To Net Income | -2.252 | |
| Cash Flow Margin | -3.921 % | |
| Cash Flow To Earnings | 3.145 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.02 | |
| Return On Assets (ROA) | -0.772 % | |
| Return On Assets QoQ | -164.333 % | |
| Return On Assets YoY | -205.034 % | |
| Return On Assets IPRWA | high: 5.121 % median: 3.312 % mean: 2.802 % SAH: -0.772 % low: -7.954 % |
|
| Return On Capital Employed (ROCE) | -0.769 % | |
| Return On Equity (ROE) | -0.044 | |
| Return On Equity QoQ | -168.433 % | |
| Return On Equity YoY | -201.559 % | |
| Return On Equity IPRWA | high: 0.225 median: 0.045 mean: 0.023 SAH: -0.044 low: -0.288 |
|
| DuPont ROE | -4.302 % | |
| Return On Invested Capital (ROIC) | -0.36 % | |
| Return On Invested Capital QoQ | -115.727 % | |
| Return On Invested Capital YoY | -109.034 % | |
| Return On Invested Capital IPRWA | high: 15.529 % median: 10.259 % mean: 8.601 % SAH: -0.36 % low: -13.266 % |
|