Highlights

  • One-year basic EPS growth is 38.33%, with a P/E of 9.79 and PEG of 0.75.
  • Second quarter net income was $57.4 million, against a net loss of $45.6 million.
  • Total revenues were $3,934.0 million in the second quarter, against $3,657.2 million.
  • Sonic repurchased 2.2 million Class A shares for $142.0 million in six months.

Sonic Automotive (NYSE:SAH) reported second quarter 2026 net income of $57.4 million, and the undervalued growth stock figures read 38.33% one-year growth in basic earnings per share, a trailing twelve-month P/E of 9.79 and an expected-basis PEG of 0.75, with shares trading at USD 62.23 on October 28, 2026, down 2.28%. On the company's side, the automotive retailer borrowed $150.0 million under a Bridge Facility on March 27, announced an increase in its Class A share repurchase authorization on April 30, and approved a $0.41 per share dividend payable October 15.

Based in Charlotte, North Carolina, and incorporated in Delaware, Sonic Automotive describes itself as one of the largest automotive retailers in the U.S. by reported total revenue. It reports three segments: Franchised Dealerships, with 107 stores covering 127 new vehicle franchises and 15 collision repair centers in 17 states; EchoPark, with 18 pre-owned vehicle stores in 10 states; and Powersports, with 20 locations and 46 franchises in five states.

Growth: Second Quarter Earnings, Revenues and Segment Income

Net income was $57.4 million in the second quarter against a net loss of $45.6 million a year earlier, and $118.3 million for the six months against $25.0 million. Basic earnings per common share were $1.82 against a loss of $1.34, and diluted earnings per common share were $1.79 against a loss of $1.34. The prior-year quarter included impairment charges of $172.4 million, against none in the current quarter.

Total revenues were $3,934.0 million against $3,657.2 million, and gross profit was $616.2 million against $602.2 million. New vehicle revenue was $1,794.1 million against $1,695.5 million, and retail used vehicle revenue was $1,329.7 million against $1,180.7 million.

Segment income, defined as income before taxes and impairment charges, was $70.7 million for Franchised Dealerships against $91.6 million, $7.2 million for EchoPark against $11.7 million, and $2.3 million for Powersports against no income. In the first half, the company acquired one Powersports business with six locations for approximately $66.3 million.

Valuation: P/E of 9.79, PEG of 0.75 and Equity

The P/E ratio of 9.79 is measured on trailing twelve-month earnings, and the PEG ratio of 0.75 on expected growth. Total stockholders' equity was $1,025.6 million at June 30, 2026, against $1,068.1 million at December 31, 2025.

Net cash used in operating activities was approximately $64.7 million for the six months, against $332.6 million provided a year earlier.

Capital Returns, Debt and Liquidity

Sonic repurchased 2.2 million Class A shares for $142.0 million in the six months. Remaining availability was $527.9 million at June 30, 2026, after the April 2026 authorization of $500.0 million joined the July 2022 authorization of $500.0 million. The Board approved a $0.41 per share dividend paid July 15, and a further $0.41 per share payable October 15 to shareholders of September 15.

Total debt was $1,758.8 million, including $650.0 million of 4.625% Senior Notes due 2029, $500.0 million of 4.875% Senior Notes due 2031 and the $150.0 million Bridge Facility. Total available liquidity resources were $676.1 million, including $19.2 million of cash and a $275.0 million floor plan deposit balance. Capital expenditures were approximately $154.5 million for the six months.

Disclosed Risks and Outlook for 2026

New vehicle gross profit per unit was $2,999 against $3,318, retail used vehicle gross profit per unit was $983 against $1,131, and selling, general and administrative expenses were $444.6 million against $412.6 million. The Bridge Facility matures on the earlier of 364 days after March 27, 2026 or a refinancing of the Mortgage Facility. Current maturities of long-term debt were $193.3 million against $52.4 million.

The company disclosed that an adverse resolution of legal matters, including class actions and actions by governmental authorities, could have a material adverse effect on its business. On the second quarter call held July 30, management cited affordability challenges and tariffs, said a greater mix of battery electric and higher-mileage vehicles had put pressure on EchoPark finance and insurance profit per unit, and said some competitors that are not fully compliant with FTC pricing rules create pricing discrepancies in certain markets.

On that call, management raised its full-year 2026 new vehicle gross profit per unit guidance to $2,850 to $3,000 from $2,700 to $3,000, kept used vehicle guidance of $1,350 to $1,450 and said second half used gross profit per unit may be lower than the first half. It guided to EchoPark adjusted EBITDA of $35 million to $40 million, including $8 million to $12 million of fourth quarter brand marketing expense, and expects one new EchoPark location in Orlando in the fourth quarter and two to four in 2027. The filing states the company generally expects an effective tax rate of 27% to 30%.