Sonic Automotive Inc. Common Stock (SAH)

FairStock Score: 36/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Buffett-and-Graham-style investor, I want an understandable business at a price that gives me a margin of safety. Sonic Automotive is understandable: it sells new and used vehicles, parts, and service through franchised dealerships, EchoPark, and Powersports. The scale is real—in fiscal 2025, the year ended 2025-12-31, revenue was $15.2B—but auto retail is a tough, cyclical, thin-margin trade. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $3.9B and net income was $57.4M, a 1.46% margin. That is a small cushion. The balance sheet worries me more: FairStock’s debt-to-equity reading is 4.56, its Altman Z-Score is 1.26, and trailing free cash flow is -$55.2M, a -2.8% FCF yield. High reported ROE of 20.63% looks less impressive when ROCE is only 5.25%, suggesting leverage is doing much of the work. At the 2026-10-13 close of $61.06, the stock trades at a FairStock P/E of 9.72, P/B of 1.88, and EV/EBITDA of 9.93. The Graham Number is $67.71, offering a 9.82% margin of safety, which is not bad but not deep. Growth is uneven: in fiscal 2023, the year ended 2023-12-31, net income was $178.2M; in fiscal 2024, the year ended 2024-12-31, it was $216.0M; and in fiscal 2025, the year ended 2025-12-31, it was $118.7M. The Lynch classification is SLOW GROWER—Shrinking, with profit down 23.6% a year over four years, and the Piotroski F-Score is 3/9. I see a leveraged, cyclical retailer with a modest discount, not a wonderful business at a bargain price.

In plain English: Sonic Automotive sells new and used cars, parts, and repair services through dealerships and powersports stores. The business is large but thin-margined and carries a lot of debt, and its recent cash flow was negative. At the 2026-10-13 close of $61.06, the price looks somewhat cheap against its reported earnings and accounting value, but the risks are significant.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer