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

Sonic Automotive, Inc. (NYSE:SAH)’s share price gapped down before the market opened on Wednesday following a weaker than expected earnings announcement. 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 traded.

The company reported $1.52 earnings per share for the quarter, missing analysts’ consensus estimates of $1.53 by ($0.01). The company had revenue of $3.87 billion during the quarter, compared to analyst estimates of $3.94 billion. Sonic Automotive had a return on equity of 21.65% and a net margin of 0.86%.Sonic Automotive’s quarterly revenue was down .6% on a year-over-year basis. During the same period in the prior year, the firm earned $1.51 EPS.

Sonic Automotive Announces Dividend

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

Key Sonic Automotive News

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

• Positive Sentiment: Major insider accumulation — Paul P. Rusnak bought roughly 100,000 shares across February purchases, increasing his stake to ~5.1M shares (average price ~ $59.95). Insider buying at scale signals confidence from a controlling shareholder and likely supports the stock. SEC Filing: Insider Purchases
• Positive Sentiment: Dividend declared — Sonic announced a quarterly dividend of $0.38 per share (ex-dividend March 13; payable April 15), implying a ~2.4% yield. The cash return can attract income-focused investors.
• Positive Sentiment: Record gross profit — Management reported record gross profit for Q4, suggesting underlying operational strength even as top-line growth was muted. This was highlighted by press coverage and helps justify the stock’s strength. Sonic Automotive misses Q4 expectations despite record gross profit
• Neutral Sentiment: Company materials available — The earnings presentation and conference-call materials (slides, transcript) are posted, giving investors more detail on margins, inventory and F&I trends to parse. Analysts and investors will use these to re-run forecasts. Earnings Call Presentation
• Negative Sentiment: Slight miss on results — Q4 EPS was $1.52 vs. consensus $1.53 and revenue was $3.87B vs. $3.94B expected; revenue declined ~0.6% year-over-year and net margin is slim (~0.86%), which gives bears ammunition that demand and margins remain challenged. Zacks: Q4 Earnings and Revenues Miss Estimates

Wall Street Analyst Weigh In

A number of research analysts recently issued reports on SAH shares. Barclays lowered 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. Wall Street Zen cut Sonic Automotive from a “buy” rating to a “hold” rating in a research report on Sunday, January 11th. Citigroup upgraded Sonic Automotive from a “neutral” rating to a “buy” rating and set a $82.00 target price for the company in a research note on Thursday, November 6th. JPMorgan Chase & Co. dropped their price target on Sonic Automotive from $70.00 to $67.00 and set an “underweight” rating on the stock in a research report on Friday, January 16th. Finally, Morgan Stanley set a $68.00 price objective on shares of Sonic Automotive in a research note on Monday, December 8th. Four equities research analysts have rated the stock with a Buy rating, five have given a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat.com, Sonic Automotive currently has a consensus rating of “Hold” and a consensus target price of $79.63.

Insider Activity

In other news, major shareholder Paul P. Rusnak bought 11,481 shares of Sonic Automotive stock in a transaction that occurred on Tuesday, February 17th. The stock was purchased at an average cost of $59.95 per share, with a total value of $688,285.95. Following the completion of the transaction, the insider directly owned 5,100,000 shares in the company, valued at $305,745,000. This trade represents a 0.23% increase in their ownership of the stock. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Insiders purchased 100,000 shares of company stock worth $5,994,472 in the last quarter. Insiders own 42.65% of the company’s stock.

Hedge Funds Weigh In On Sonic Automotive

A number of hedge funds have recently made changes to their positions in the business. Goldman Sachs Group Inc. lifted its position in shares of Sonic Automotive by 124.9% during the 1st quarter. Goldman Sachs Group Inc. now owns 355,328 shares of the company’s stock worth $20,239,000 after buying an additional 197,336 shares during the period. Bridgeway Capital Management LLC bought a new position in shares of Sonic Automotive during the fourth quarter valued at $7,384,000. Qube Research & Technologies Ltd acquired a new stake in shares of Sonic Automotive in the 3rd quarter valued at $7,450,000. Vanguard Group Inc. grew its holdings in shares of Sonic Automotive by 6.2% in the 3rd quarter. Vanguard Group Inc. now owns 1,646,450 shares of the company’s stock worth $125,278,000 after purchasing an additional 96,836 shares during the last quarter. Finally, ProShare Advisors LLC acquired a new stake in shares of Sonic Automotive during the 2nd quarter worth about $6,564,000. Institutional investors and hedge funds own 46.92% of the company’s stock.

Sonic Automotive Stock Up 8.1%

The stock has a market capitalization of $2.15 billion, a P/E ratio of 17.03 and a beta of 0.93. The company has a current ratio of 1.02, a quick ratio of 0.27 and a debt-to-equity ratio of 1.68. The firm’s fifty day moving average is $62.64 and its 200-day moving average is $68.92.

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.