Auto dealers as a group saw gains Wednesday, but it's far from certain that the group will move higher amid high interest rates and low inventories. AutoNation may be an exception to the rule though. It has reported double-digit profit every quarter over the past year, although its growth rate has trended down. On Wednesday the Relative Strength (RS) Rating for AutoNation rose into a higher percentile, as it got a lift from 70 to 78, according to MarketSmith. AutoNation stock rose.
The upwardly revised 78 RS Rating means that Fort Lauderdale, Fla.-based AutoNation is outperforming 78% of stocks in IBD's database on price performance. The bump higher puts it just a few points below the threshold for the best stocks to buy and watch.
Market research shows that the market's biggest winners typically have an RS Rating of over 80 as they launch their largest climbs. See if AutoNation can continue to show renewed price strength and clear that threshold.
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AutoNation Stock Among Top 19% Overall
The operator of 339 dealerships offering new and used vehicles has an outstanding 96 Earnings Per Share Rating, out of 99, and a respectable 81 Composite Rating. That puts it among the top 19% for a group of five key fundamental and technical metrics.
AutoNation stock rose 2% on Wednesday to 115.47. The auto dealership operator's stock dropped to a 20.59 low in March 2020 amid the Covid market crash. Over the next couple of years it rose steadily to an all-time high 135.57 on Aug. 19. It's mostly moved sideways since then and hasn't formed a clear pattern yet. See if the stock goes on to build a promising consolidation that could kick off a new climb.
Earnings per share grew 17% last quarter to a hefty $6 per share. The prior three quarters its EPS grew 121%, 107% and then 34%. Revenue grew 4% last quarter to $6.67 billion.
Peers In Auto Dealers Group
AutoNation stock holds the No. 8 rank among its peers in the Retail/Wholesale-Auto Parts industry group. Asbury Automotive and Rush Enterprises A are also among the group's highest-rated stocks. Meanwhile, CarMax was downgraded by JPMorgan Wednesday to underweight from neutral. JPMorgan analyst Rajat Gupta maintained a 60 price target though. CarMax edged up fractionally to 67.43.
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