Earnings Beat and Acquisitions Could Be a Game Changer For AutoNation (AN)

• AutoNation, Inc. reported strong third quarter results for 2025, with revenue rising to US$7.04 billion and net income reaching US$215.1 million, both higher than the same period last year; the company also completed a share repurchase tranche and spent approximately US$350 million on acquisitions in Denver and Chicago this year.
• The completion of a multi-billion dollar buyback program alongside continued M&A activity and robust financial performance highlights AutoNation's ongoing focus on disciplined capital allocation and market expansion.
• We'll examine how AutoNation's stronger earnings and active acquisitions shape its updated investment narrative and growth outlook.

Find companies with promising cash flow potential yet trading below their fair value.

AutoNation Investment Narrative Recap

To be a shareholder in AutoNation, you need to believe the company can capitalize on its established dealership network and scale, even as digital-first and direct-to-consumer auto sales models reshape the industry. The recent news of robust earnings and ongoing acquisitions signals continued disciplined capital allocation, but these developments do not materially change the near-term focus on managing heightened competition or margin risk from evolving retail channels.

Among the latest announcements, AutoNation’s US$350 million in acquisitions for the Denver and Chicago markets stand out as particularly relevant. This investment supports the company’s efforts to build density in key regions, a critical catalyst tied to optimizing scale, cost efficiency, and long-term competitiveness, even as the business faces pressures from new retail models and inventory shifts.

Yet, what hasn’t changed is the potential risk if digital-first competitors accelerate their gains, investors need to be aware that ...

Read the full narrative on AutoNation (it's free!)

AutoNation is expected to generate $29.9 billion in revenue and $871.6 million in earnings by 2028. This outlook reflects a projected 2.9% annual revenue growth and a $237.8 million increase in earnings from the current $633.8 million.

Uncover how AutoNation's forecasts yield a $228.30 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Two members of the Simply Wall St Community estimate AutoNation’s fair value between US$228 and US$322 per share. While some expect disciplined expansion to support resilient growth, rising digital competition continues to capture attention and could impact future potential. Explore several viewpoints to understand the full spectrum of market opinion.

Explore 2 other fair value estimates on AutoNation - why the stock might be worth as much as 61% more than the current price!

Build Your Own AutoNation Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your AutoNation research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free AutoNation research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate AutoNation's overall financial health at a glance.

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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.

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