Assessing Asbury Automotive Group (ABG) Valuation After Strong Three-Year Shareholder Returns

Asbury Automotive Group (ABG) has caught investor attention following its recent stock performance and steady financials over the past year. With shares up 13% in the past 12 months, the company’s growth story is worth a closer look.

See our latest analysis for Asbury Automotive Group.

Asbury’s recent momentum reflects renewed optimism in the auto retail sector, with the stock holding steady above $250. What really stands out is a 13% one-year total shareholder return and a remarkable 65% gain over the past three years. This highlights Asbury’s ability to reward long-term investors even as the broader industry evolves.

If you’re interested in seeing how other auto retailers are performing, now is the perfect time to explore the space with our curated See the full list for free.

With shares hovering close to analyst targets, investors now face a critical question: is Asbury trading below its true value, or is the market already factoring in all its growth potential?

Most Popular Narrative: 3.9% Undervalued

With Asbury Automotive Group’s last close at $251.52 and the most watched narrative indicating a fair value near $261.75, investors are eyeing a modest upside in the current market price. Here is a direct look at the core rationale shaping this narrative’s outlook.

Continued investment in digital retail via Clicklane and full rollout of the Tekion DMS are expected to drive operational efficiencies, improve employee productivity, reduce SG&A as a percent of gross profit, and increase transaction volumes. These factors could positively impact margins and EBITDA over time.

Read the complete narrative.

Curious about the quantifiable catalysts under this valuation? The narrative’s backbone is bold assumptions on revenue expansion, steady profit margins, and a payout multiple that stands out among sector peers. Which projections are moving the needle for analysts? Click through for the full story behind these numbers.

Result: Fair Value of $261.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising debt from acquisitions and persistent supply constraints on used vehicles remain key risks that could limit Asbury's growth and financial flexibility.

Find out about the key risks to this Asbury Automotive Group narrative.

Build Your Own Asbury Automotive Group Narrative

If you want to dig into the numbers and shape your own outlook for Asbury Automotive Group, it takes just a few minutes to build a personalized perspective. Do it your way

A great starting point for your Asbury Automotive Group research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Act now to strengthen your portfolio with companies positioned for tomorrow’s breakthroughs by tapping into powerful stock screens available on Simply Wall Street.

• Boost your search for high yield by targeting these 19 dividend stocks with yields > 3%, which consistently pay attractive dividends above 3% and offer potential income stability.
• Jump ahead of the curve by evaluating these 24 AI penny stocks, which are set to benefit from advances in artificial intelligence, automation, and the new wave of smart technology.
• Capitalize on underappreciated gems by reviewing these 904 undervalued stocks based on cash flows, which trade below their calculated cash flow value for superior long-term return prospects.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com