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1. Company Snapshot

1.a. Company Description

Asbury Automotive Group, Inc., together with its subsidiaries, operates as an automotive retailer in the United States.It offers a range of automotive products and services, including new and used vehicles; and vehicle repair and maintenance services, replacement parts, and collision repair services.The company also provides finance and insurance products, including arranging vehicle financing through third parties; and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation, prepaid maintenance, and credit life and disability insurance.


As of December 31, 2021, the company owned and operated 205 new vehicle franchises representing 31 brands of automobiles at 155 dealership locations; and 35 collision centers in the United States.Asbury Automotive Group, Inc.was founded in 1996 and is headquartered in Duluth, Georgia.

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1.b. Last Insights on ABG

Asbury Automotive Group's recent performance was positively driven by acquisitions, share buybacks, and revenue growth. The company acquired $2.9 billion in annualized revenue and repurchased $100 million in shares, demonstrating its strategic expansion and commitment to enhancing shareholder value. Its Q4 2025 revenue rose nearly 4% year-over-year, driven by robust sales. Additionally, several institutional investors, including Congress Asset Management Co. and Creative Planning, have taken or increased positions in the company. (Source: MarketBeat, reports a consensus rating of "Hold" from analysts)

1.c. Company Highlights

2. Asbury Automotive Group's Q4 2025 Earnings: A Strong Performance

Asbury Automotive Group reported a strong fourth quarter 2025, with revenues reaching a record $4.7 billion, accompanied by a gross profit of $793 million, also a quarterly record. The gross profit margin expanded by 31 basis points to 17%. The company's adjusted operating margin was 5.4%, and adjusted earnings per share (EPS) came in at $6.67, slightly below estimates of $6.7. The company's financial performance was highlighted by a 6% year-over-year increase in used gross profit, driven by an 18% rise in used retail gross profit per unit to $1,749.

Publication Date: Feb -10

📋 Highlights
  • Record Fourth-Quarter Revenue and Profit:: Generated $4.7 billion in revenue with $793 million gross profit (17% margin), both fourth-quarter records, reflecting improved leverage and strategic capital decisions.
  • Strong Capital Allocation:: Deployed $186 million in CapEx, repurchased $50 million in shares (Q4) and $100 million annually, while acquiring $2.9 billion in revenue-generating assets to expand geographic reach.
  • Used Vehicle Profit Growth:: Achieved 6% YoY increase in total used gross profit, with per-unit retail gross profit rising 18% to $1,749, driven by Techeon software adoption in 46 stores.
  • EPS Adjustments and Noncash Impacts:: Adjusted EPS was $6.67, but TCA deferrals reduced it by $0.31/share (excluding deferrals, $6.98). Noncash impairments and gains totaled $87 million and $26 million respectively.
  • Strategic Technology Rollout:: Techeon software implementation expanded to 46 stores, with 125 remaining, expected to offset duplicated costs by mid-2026 and improve operational efficiency.

Operational Highlights

The company's operational performance was marked by the successful rollout of Techeon, a new software platform, to 15 additional stores during the quarter, bringing the total count to 46 stores, or over 25% of its portfolio. The company expects to complete the rollout to its remaining 125 stores by the third quarter of this year. As David Hult noted, "We managed our portfolio and allocated capital to areas that generate the greatest returns for the business and our shareholders, which has long been a core pillar of Asbury's strategic plan."

Outlook and Guidance

Looking ahead, the company expects a challenging environment in 2026, with a forecast of slightly lower same-store revenue growth. However, the company is confident in its ability to navigate this environment, with a focus on maximizing gross profit rather than chasing volume. The company's SAAR forecast has been updated to 15.9% from 15.7%, based on third-party assessments. Analysts estimate revenue growth of 1.2% for the next year.

Valuation and Metrics

Asbury Automotive Group's current valuation metrics indicate a relatively attractive profile, with a P/E Ratio of 12.24, P/B Ratio of 1.11, and EV/EBITDA of 9.94. The company's Return on Equity (ROE) stands at 9.29%, while its Net Debt / EBITDA ratio is 5.58. The Free Cash Flow Yield is 15.85%, indicating a healthy cash generation capability.

Key Drivers and Challenges

The company's key drivers include the successful rollout of Techeon, a focus on maximizing gross profit, and a renewed strategy in fixed operations. However, the company faces challenges such as a potentially tighter supply environment in 2026, which may affect affordability and consumer credit availability. The high cost of sales, particularly for new vehicles, remains a pressure point on margins.

3. NewsRoom

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Principal Financial Group Inc. Reduces Stake in Asbury Automotive Group, Inc. $ABG

Feb -08

Source: defenseworld.net

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Asbury Q4 Earnings Miss Expectations, Revenues Rise Y/Y

Feb -06

Source: zacks.com

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Asbury Automotive Group, Inc. (ABG) Q4 2025 Earnings Call Transcript

Feb -05

Source: seekingalpha.com

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Asbury Automotive (ABG) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates

Feb -05

Source: zacks.com

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Asbury Automotive Group (ABG) Lags Q4 Earnings and Revenue Estimates

Feb -05

Source: zacks.com

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Asbury Automotive Group Reports Fourth Quarter Results

Feb -05

Source: businesswire.com

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Asbury Automotive Group Appoints New Director to Its Board

Feb -04

Source: businesswire.com

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Asbury Automotive Group (ABG) to Release Earnings on Thursday

Jan -29

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.43%)

6. Segments

Dealerships

Expected Growth: 7.5%

Asbury Automotive Group's 7.5% dealership growth is driven by strategic acquisitions, increasing F&I product penetration, and a focus on high-margin brands. Additionally, the company's One Asbury initiative aims to enhance the customer experience, driving revenue growth through increased retention and referrals. Furthermore, a strong used vehicle market and growing demand for luxury vehicles also contribute to the segment's growth.

Total Care Auto

Expected Growth: 8.5%

Total Care Auto's 8.5% growth is driven by increasing demand for vehicle maintenance and repair services, expansion of Asbury's service center network, and strategic acquisitions. Additionally, the rise of electric and autonomous vehicles, which require more complex and frequent maintenance, contributes to the segment's growth.

Eliminations

Expected Growth: 0.0%

Asbury Automotive Group, Inc. reports zero growth in eliminations, indicating a stable consolidation of intercompany transactions. This is driven by consistent internal sales and purchases, with no significant changes in business segments or accounting practices. The lack of growth suggests effective management of intercompany eliminations, maintaining a stable financial reporting structure.

7. Detailed Products

New Vehicle Sales

Asbury Automotive Group, Inc. sells new vehicles from various manufacturers such as Toyota, Ford, and Honda through its dealerships.

Used Vehicle Sales

The company sells pre-owned vehicles, including certified pre-owned vehicles, through its dealerships and online platforms.

Parts and Service

Asbury Automotive Group, Inc. offers parts and service repairs for vehicles, including routine maintenance, repairs, and warranty work.

Collision Repair

The company provides collision repair services, including body shop repairs and paintless dent repair, through its dealerships and standalone collision centers.

Finance and Insurance

Asbury Automotive Group, Inc. offers financing and insurance products, including extended warranties and service contracts, to customers.

Aftermarket Parts and Accessories

The company sells aftermarket parts and accessories, including tires, wheels, and performance upgrades, through its dealerships and online platforms.

8. Asbury Automotive Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Asbury Automotive Group, Inc. faces moderate threat from substitutes, as customers have limited alternatives for purchasing and servicing vehicles.

Bargaining Power Of Customers

Asbury Automotive Group, Inc. has a large customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Asbury Automotive Group, Inc. relies on a few large suppliers for vehicles and parts, giving them some bargaining power, but the company's large scale of operations helps to mitigate this.

Threat Of New Entrants

The automotive retail industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to compete with Asbury Automotive Group, Inc.

Intensity Of Rivalry

The automotive retail industry is highly competitive, with many established players competing for market share, which increases the intensity of rivalry for Asbury Automotive Group, Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 60.61%
Debt Cost 4.41%
Equity Weight 39.39%
Equity Cost 9.80%
WACC 6.53%
Leverage 153.88%

11. Quality Control: Asbury Automotive Group, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Value: 6.8

Growth: 7.0

Quality: 4.6

Yield: 5.0

Momentum: 5.0

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Quality: 3.5

Yield: 0.0

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Asbury Automotive Group

A-Score: 4.7/10

Value: 7.7

Growth: 7.3

Quality: 3.7

Yield: 0.0

Momentum: 3.5

Volatility: 6.0

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Value: 6.8

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Quality: 4.2

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

228.56$

Current Price

228.56$

Potential

-0.00%

Expected Cash-Flows