ABG in August: Is It Time to Buy or Bail?

The detailed monthy forecast below outlines the model’s expectations for ABG’s price evolution ($193.36 to $319.79). It includes projected ranges (Min, Avg, Max), potential ROI based on the average projection versus the current price, and a derived model signal for each period.

Over the forecast horizon (2025-08 to 2026-08), ABG’s price is projected by the model to fluctuate between approximately $193.36 and $319.79.

The projected price range remains relatively consistent (from $223.02 – $223.02 to $218.43 – $308.12), implying stable forecast uncertainty.

ABG demonstrates, with its Trailing P/E at 8.39x and Forward P/E at 8.28x, suggests an attractive valuation opportunity. This indicates modest improvement expectations Meanwhile, its Price/Sales ratio of 0.26x and Price/Book of 1.19x show that the company trades at multiples that warrant attention. These metrics provide insight into market positioning.

From an enterprise value perspective, The enterprise value to revenue ratio of 0.52x indicates reasonable revenue-based valuation, and its the EV/EBITDA multiple of 8.30x suggests reasonable earnings-based valuation. These valuation metrics provide a comprehensive view of the company’s current market positioning.

Although the market considers Asbury Automotive Group, Inc. to be a key player in the Auto & Truck Dealerships industry with a 4.51 B market cap, its enterprise value is much higher at 8.98 B, with 4.47B of that value added by debt. Investors are confident about Asbury Automotive Group, Inc.’s future earnings, but keep in mind the risk of that large amount of debt.

The valuation ratios tell an interesting story: at 0.52x revenue and 8.30x EBITDA, Asbury Automotive Group, Inc. trades at a valuation that reflects its market position. This reflects the company’s strong market position and brand assets. But it also means the stock may have little room for error. The upcoming 2025-07-29 earnings report will be crucial in showing whether Asbury Automotive Group, Inc.’s businesses can grow into this valuation. Essentially, you’re paying for quality – but quality doesn’t come cheap.

An analysis of the key metrics in ABG’s margin performance shows the company has solid control over its costs and prices. The company is successful in controlling its production costs, as shown by the gross margin of 17.05%, and it also profits well from its core operations, reflected in the 5.89% operating margin. A 6.27% EBITDA margin indicates ABG is capable of generating strong cash flow from its operations before accounting for financing and tax strategies. All things considered, ABG can hold onto around $3.130 in net profit for every $1 of its revenue over the last twelve months. While the business’s revenue is increasing at an aggressive rate (3.00%), investors should monitor if this pace can be sustained without eroding profit margins.

ABG’s 1.08 B in EBITDA and 2.94 B in gross profit indicate its raw earning power, while the 540.00 M in net income reveals how effectively it converts that power into bottom-line results. The company appears to be balancing its pursuit of growth with the need to maintain profitability. Despite healthy gross margins, there is a significant difference between the company’s gross and net margins (17.05% vs. 3.13%). This is likely due to high operating expenses, interest costs, or taxes, which are key areas for investors to watch. In the future, maintaining steady or improving margins will be critical. ABG needs to defend its pricing power and control operating costs, as this will help sustain profitability, especially if revenue growth moderates.

This section summarizes the collective view of professional analysts covering ABG. The consensus recommendation is ‘Hold’. 8 analyst(s) contributed to this consensus view. The mean price target is $253.50, with individual targets ranging from $215.00 – $335.00. Based on the mean target ($253.50), this implies a potential upside of ~13.7% from the current price ($223.02). This provides a gauge of Wall Street sentiment regarding the stock’s potential.

ABGs financial data clearly shows that strengths and weaknesses can appear together. The ROE and ROA of 15.20% and 6.15%, respectively, reflect a highly efficient use of capital, often seen in fast-growing firms. The 1.21x Debt/Equity ratio (with 4.55 B in debt and 74.70 M in cash) points to the fact that ABG has taken on a manageable debt load to fuel its operations and growth. Even with its debt, the company’s ability to bring in 964.90 M in operating cash flow (TTM) proves that its core business can steadily produce cash, which is a significant strength.

The Current Ratio of 1.30x and Quick Ratio of 0.23x show a solid liquidity position, able to cover its short-term liabilities. Furthermore, ABG’s 472.55 M in levered free cash flow suggests it can still generate significant cash for shareholders even after meeting its financial obligations.

Analyzing the last 15 trading days from July 18, 2025 to August 01, 2025, ABG saw its stock post a return of -3.02%. The recent trading range was between $212.85 and $240.83, with an average volume of 241,147 shares traded daily.

There is currently 1 M worth of short interest in ABG, and the short ratio (or days to cover) is 6.0x. This means that at the stock’s recent average trading volume, it would take several days for all short positions to be covered. This moderate level indicates a balance between bearish bets and the market’s ability to absorb them without extreme volatility.

With 8.91% of the public float sold short, a moderate percentage of the stock is being shorted, showing some bearish sentiment but not an extreme level. This level has remained relatively stable compared to last month’s value of 1 M, suggesting a shift in bearish sentiment. With notable short interest, investors should be aware of potential volatility spikes, which could be triggered by news events that force short sellers to cover their positions.

When looking at the price range over the past year, the stock has seen a high of $312.56 and a low of $201.68. This wide gap tells us the stock has been through significant fluctuations, likely influenced by market sentiment or company-specific news. Currently, the 50-day moving average stands at $242.14, which is slightly below the 200-day moving average of $244.45. This setup may signal a short-term pullback or consolidation phase, especially for technical traders tracking momentum and trend direction.

A beta of 0.88x suggests the stock’s movement is generally in line with the broader market. Combined with a moderate 30-day annualized volatility of 35.9%, it’s clear this stock sees frequent price swings. For investors, this means potential for gains, but also higher downside risk. These indicators matter when deciding position sizing or entry timing, especially if you’re managing a portfolio that balances stability with growth exposure.

Investing in ABG involves various risks. This section outlines potential factors identified through data analysis and general market considerations. It is not exhaustive.