Stock performance snapshot and recent returns

With no single headline event driving the move, Asbury Automotive Group (ABG) has still drawn attention after a recent stretch of mixed returns, including a 4.7% one day decline and weaker performance over the past year.

Over the past week the stock is down 3.8%, with a smaller decline over the past month and past 3 months. Year to date the share price is up modestly, while the 3 year and 5 year total returns remain positive.

The recent 1 day share price decline of 4.7% and 7 day share price return of 3.9% place Asbury Automotive Group’s US$238.04 share price at the lower end of its recent range, while the 5 year total shareholder return of 66.9% points to a much stronger longer term record.

If this kind of mixed performance has you reassessing your options in autos, it could be a good moment to see what is happening with auto manufacturers.

With the shares trading at US$238.04, a 7.3% gap to the average analyst price target and a modelled intrinsic value implying a larger discount, you have to ask whether this is a genuine opportunity or if the market is already pricing in future growth.

Most Popular Narrative: 6.8% Undervalued

Asbury Automotive Group's most followed narrative points to a fair value of about $255.50, compared with the recent share price of $238.04, suggesting a modest valuation gap built on detailed earnings and cash flow assumptions.

The acquisition of Herb Chambers expands Asbury's presence in a stable, affluent market (New England) with a high mix of luxury brands, expected to further boost average transaction values and provide earnings resilience, supporting future revenue and margin growth.

Continued investment in digital retail via Clicklane and full rollout of the Tekion DMS are expected to drive operational efficiencies, improve employee productivity, reduce SG&A as a percent of gross profit, and increase transaction volumes, which is expected to positively impact margins and EBITDA over time.

Curious what kind of revenue path and steady margins are baked into that fair value, and how much weight is on future earnings versus the discount rate assumptions? The full narrative lays out the earnings bridge, expected profit conversion, and the valuation multiple it all rolls up to, but keeps one key tension between growth and capital returns for you to judge.

Result: Fair Value of $255.50 (UNDERVALUED)

However, that story can change quickly if acquisition driven growth strains leverage, or if digital and direct to consumer models chip away at traditional dealership economics.

Build Your Own Asbury Automotive Group Narrative

If you see the numbers differently or prefer to weigh the assumptions yourself, you can stress test the data and Do it your way in just a few minutes.

A great starting point for your Asbury Automotive Group research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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.