汽车经销商享有多样化的收入来源和竞争护城河-分析师

With a diverse business model that generates cash through sales, financing and service, and robust competitive moat, franchised auto dealerships are “shareholder friendly businesses” in the long-term but with a more cautious immediate outlook from earnings normalization on a post-COVID boom.

Stephens analysts Jeff Lick and Thomas Wendler initiate coverage of the Public 6 with an Overweight rating for AutoNation (AN), Lithia Motors (LAD), Asbury Automotive Group (ABG), Group 1 Automotive (GPI), Penske Automotive Group (PAG), and Sonic Automotive (SAH) on the group’s diverse cash stream and essential need to the public.

Cautiousness, however, is driven by the belief that the timing and depth of negative year-over-year earnings will last another year and be deeper than reflected in the current street estimates.

Inventory levels should normalize with Q3 data showing 66 days of supply of new inventory, the first quarter since 2019 where new unit inventory is at or near average. But while days sales outstanding (“DSO”) have returned to trend, gross profit per unit on new vehicles is still 87% above average.

The team also initiated Carvana (NYSE:CVNA) with an Overweight rating, labeling the company a “category killer” in the used vehicle retail market.

“[Carvana] is transforming the used vehicle retail market, the largest consumer vertical in the U.S. CVNA combines a digital, virtual showroom with a regionally centralized back end that enables economies of scale and generates superior financial metrics in virtually every area of the business,” Stephens analysts said.

Despite having just 1% of the market, Carvana is expected to be the most profitable used vehicle player on an EBITDA basis by year-end, and in the early stages of being the same category killer in the segment as Home Depot (HD), Ulta (ULTA), and Chipotle (CMG).

Carvana (CVNA) are higher by ~4% on Thursday, with gains of 2-3% for AutoNation (AN), Lithia Motors (LAD), Group 1 Automotive (GPI), and Sonic Automotive (SAH). 

More on Carvana

• Carvana: Surprising Profits; Turnaround Is Accelerating (Rating Upgrade)
• Carvana: I Was Wrong In 2022, But My Buyside Analyst Friend Got It Right (Rating Upgrade)
• Carvana: Are The Headline Numbers Too Good?
• Carvana unveils its first auction Megasite in Kansas City
• 3G Capital top Q2 moves include cutting Meta, new stakes in Uber, MercadoLibre, Carvana