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AutoNation (AN) Gains But Lags Market: What You Should Know

AutoNation (AN) closed the most recent trading day at $110.58, moving +0.64% from the previous trading session.

This story originally appeared on Zacks

In the latest trading session, AutoNation (AN) closed at $110.58, marking a +0.64% move from the previous day. The stock lagged the S&P 500's daily gain of 0.88%.

- Zacks

Coming into today, shares of the auto retailer had lost 9.08% in the past month. In that same time, the Retail-Wholesale sector lost 4.22%, while the S&P 500 gained 1.2%.

AN will be looking to display strength as it nears its next earnings release. In that report, analysts expect AN to post earnings of $4.01 per share. This would mark year-over-year growth of 68.49%. Meanwhile, our latest consensus estimate is calling for revenue of $6.43 billion, up 19.04% from the prior-year quarter.

AN's full-year Zacks Consensus Estimates are calling for earnings of $14.84 per share and revenue of $25.58 billion. These results would represent year-over-year changes of +108.43% and +25.44%, respectively.

It is also important to note the recent changes to analyst estimates for AN. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 9.71% higher. AN is holding a Zacks Rank of #1 (Strong Buy) right now.

Valuation is also important, so investors should note that AN has a Forward P/E ratio of 7.41 right now. Its industry sports an average Forward P/E of 7.8, so we one might conclude that AN is trading at a discount comparatively.

It is also worth noting that AN currently has a PEG ratio of 0.37. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Automotive - Retail and Whole Sales stocks are, on average, holding a PEG ratio of 0.48 based on yesterday's closing prices.

The Automotive - Retail and Whole Sales industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 6, which puts it in the top 3% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AN in the coming trading sessions, be sure to utilize Zacks.com.

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