Highlights

  • AutoNation shows 35.10% one-year basic EPS growth, a P/E of 7.45 and PEG of 0.40.
  • Second quarter net income was $182.1 million, against $86.4 million a year earlier.
  • AutoNation repurchased 2.3 million shares for $457.0 million; $618.9 million remains authorized.
  • AutoNation Finance income was $10.7 million in the second quarter, against $2.0 million.

AutoNation (NYSE:AN) reported second quarter 2026 net income of $182.1 million, and the undervalued growth stock figures read 35.10% one-year growth in basic earnings per share, a trailing twelve-month P/E of 7.45 and an expected-basis PEG of 0.40, with shares trading at USD 163.12 on October 28, 2026, down 1.03%. In its latest disclosures, the automotive retailer issued $749.2 million of asset-backed term securitization notes in January, acquired four dealerships and sold two in the first half, and closed a $550.0 million securitization in June.

AutoNation is based in Fort Lauderdale, Florida, and incorporated in Delaware. It is one of the largest automotive retailers in the United States and, at June 30, 2026, owned and operated 327 new vehicle franchises from 246 stores, selling 30 new vehicle brands, predominantly in Sunbelt metropolitan markets. It also operated 52 collision centers, 24 AutoNation USA stores and a captive auto finance company. Its four reportable segments are Domestic, Import, Premium Luxury and AutoNation Finance.

Growth: Second Quarter Earnings, Revenue and Parts and Service

Net income was $182.1 million in the second quarter against $86.4 million, and $387.5 million for the six months against $261.9 million. Basic earnings per share were $5.44 against $2.29, and diluted earnings per share were $5.39 against $2.26. For the six months, basic earnings per share were $11.36 against $6.82. The company said the 2025 quarter included non-cash goodwill and franchise rights impairments of $122.8 million after tax, and that earnings per share for the six months benefited from a net gain on minority equity investments.

Total revenue was $6,929.8 million against $6,974.4 million, down 0.6%. Operating income was $319.0 million against $217.6 million, up 46.6%. Parts and service gross profit was $607.1 million against $598.6 million, with customer-pay service gross profit up 7% and wholesale parts up 9%. AutoNation Finance income was $10.7 million against $2.0 million.

Valuation: P/E of 7.45, PEG of 0.40 and Management Commentary

The P/E ratio of 7.45 is measured on trailing twelve-month earnings, and the PEG ratio of 0.40 is on an expected basis. Net cash used in operating activities was $48.9 million for the six months against $230.3 million.

On the second quarter 2026 earnings call, Chief Executive Officer Michael Manley said the company focuses on operating profits and cash flows, and that return on invested capital and cash flow are a better proxy than unit volumes. Chief Financial Officer Thomas Szlosek said covenant leverage remains within the targeted 2x to 3x EBITDA range. The filing reports a leverage ratio of 2.77x against a requirement of 3.75x or lower.

Capital Returns and Balance Sheet: Buybacks, Acquisitions and Debt

AutoNation repurchased 0.8 million shares for $157.0 million in the second quarter and 2.3 million shares for $457.0 million in the six months, at an average price of $200.59 per share. At June 30, 2026, $618.9 million remained under the repurchase limit. The company paid $316.5 million in cash for business acquisitions, purchasing one Import store and three Premium Luxury stores.

Cash and cash equivalents were $53.3 million and revolving credit facility availability was $1,569.7 million. Commercial paper notes outstanding were $635.0 million against $200.0 million at December 31, 2025. Long-term debt, net of current maturities, was $3,717.4 million, and non-recourse debt, net of current maturities, was $2,333.9 million. Vehicle floorplan payable was $4,058.9 million.

Disclosed Risks and Outlook: Vehicle Margins, Unit Volumes and Guidance

Total gross profit was $1,231.1 million against $1,275.4 million, down 3.5%. The company said new vehicle gross profit decreased 18%, used vehicle gross profit 8% and finance and insurance gross profit 3%. New vehicle gross profit per vehicle retailed was $2,381 against $2,785. The company attributed the decline to lower unit volume against prior-year tariff-related demand, lower electric vehicle volume following the end of EV tax credits, and higher average vehicle costs. New vehicle units were 63,240 against 65,847, and used vehicle units were 64,521 against 69,736, which the company linked to supply constraints on lower-priced used vehicles.

Domestic segment revenue was $1,793.1 million against $1,920.5 million, down 6.6%. Other interest expense was $49.9 million against $46.2 million. The company identified 16 stores with lower relative performance, though franchise rights fair value exceeded carrying value. It reported no indication of a reasonably possible material loss from legal proceedings.

On its second quarter 2026 call, management said it expects selling, general and administrative expense to reach 66% to 67% of gross profit on a run rate basis by the end of 2026, and capital expenditures of approximately $325 million for the year. It expects off-lease vehicle supply to accelerate meaningfully in the second half and adjusted earnings per share growth in the second half.