Sonic Automotive Price To Earning vs. Return On Equity
| SAH Stock | USD 69.93 0.50 0.72% |
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross Profit Margin | 0.12 | 0.1563 |
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| Operating Profit Margin | 0.0198 | 0.0295 |
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For Sonic Automotive profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Sonic Automotive to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Sonic Automotive utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Sonic Automotive's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Sonic Automotive over time as well as its relative position and ranking within its peers.
Sonic |
Sonic Automotive's Revenue Breakdown by Earning Segment
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Is Automotive Retail space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Sonic Automotive. If investors know Sonic will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Sonic Automotive listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth 0.109 | Dividend Share 1.2 | Earnings Share 5.64 | Revenue Per Share 409.817 | Quarterly Revenue Growth (0.04) |
The market value of Sonic Automotive is measured differently than its book value, which is the value of Sonic that is recorded on the company's balance sheet. Investors also form their own opinion of Sonic Automotive's value that differs from its market value or its book value, called intrinsic value, which is Sonic Automotive's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Sonic Automotive's market value can be influenced by many factors that don't directly affect Sonic Automotive's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Sonic Automotive's value and its price as these two are different measures arrived at by different means. Investors typically determine if Sonic Automotive is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Sonic Automotive's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.
Sonic Automotive Return On Equity vs. Price To Earning Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Sonic Automotive's current stock value. Our valuation model uses many indicators to compare Sonic Automotive value to that of its competitors to determine the firm's financial worth. Sonic Automotive is currently regarded as top stock in price to earning category among its peers. It is rated second in return on equity category among its peers reporting about 0.02 of Return On Equity per Price To Earning. The ratio of Price To Earning to Return On Equity for Sonic Automotive is roughly 52.63 . As of now, Sonic Automotive's Return On Equity is increasing as compared to previous years. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Sonic Automotive's earnings, one of the primary drivers of an investment's value.Sonic Return On Equity vs. Price To Earning
Price to Earnings ratio is typically used for current valuation of a company and is one of the most popular ratios that investors monitor daily. Holding a low PE stock is less risky because when a company's profitability falls, it is likely that earnings will also go down as well. In other words, if you start from a lower position, your downside risk is limited. There are also some investors who believe that low Price to Earnings ratio reflects the low pricing because a given company is in trouble. On the other hand, a higher PE ratio means that investors are paying more for each unit of profit.
Sonic Automotive |
| = | 11.02 X |
Generally speaking, the Price to Earnings ratio gives investors an idea of what the market is willing to pay for the company's current earnings.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Sonic Automotive |
| = | 0.21 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Sonic Return On Equity Comparison
Sonic Automotive is currently under evaluation in return on equity category among its peers.
Sonic Automotive Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Sonic Automotive, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Sonic Automotive will eventually generate negative long term returns. The profitability progress is the general direction of Sonic Automotive's change in net profit over the period of time. It can combine multiple indicators of Sonic Automotive, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | 1.8 M | 1.9 M | |
| Operating Income | 423.6 M | 224.2 M | |
| Income Before Tax | 241.9 M | 254 M | |
| Total Other Income Expense Net | -181.7 M | -172.6 M | |
| Net Income | 178.2 M | 187.1 M | |
| Income Tax Expense | 63.7 M | 40.8 M | |
| Net Income Applicable To Common Shares | 101.8 M | 105.6 M | |
| Net Loss | -51.4 M | -48.8 M | |
| Non Operating Income Net Other | 230 K | 241.5 K | |
| Interest Income | 100 K | 95 K | |
| Net Interest Income | -172.7 M | -164.1 M | |
| Change To Netincome | 365.2 M | 383.5 M | |
| Net Income Per Share | 5.09 | 5.35 | |
| Income Quality | (0.09) | (0.08) | |
| Net Income Per E B T | 0.74 | 0.57 |
Sonic Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Sonic Automotive. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Sonic Automotive position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Sonic Automotive's important profitability drivers and their relationship over time.
Use Sonic Automotive in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Sonic Automotive position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sonic Automotive will appreciate offsetting losses from the drop in the long position's value.Sonic Automotive Pair Trading
Sonic Automotive Pair Trading Analysis
The ability to find closely correlated positions to Sonic Automotive could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Sonic Automotive when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Sonic Automotive - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Sonic Automotive to buy it.
The correlation of Sonic Automotive is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Sonic Automotive moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Sonic Automotive moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Sonic Automotive can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Sonic Automotive position
In addition to having Sonic Automotive in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Check out World Market Map. For more detail on how to invest in Sonic Stock please use our How to Invest in Sonic Automotive guide.You can also try the Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
To fully project Sonic Automotive's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Sonic Automotive at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Sonic Automotive's income statement, its balance sheet, and the statement of cash flows.