ABG

Asbury Automotive Group Inc

Industrial/Transportation, Consumer


Presented:12/16/2020
Price:$144.78
Cap:$2.79B
Current Price:$225.83
Cap:$4.51B

Presented

Date12/16/2020
Price$144.78
Market Cap$2.79B
Ent Value$4.10B
P/E Ratio13.41x
Book Value$42.10
Div Yield0%
Shares O/S19.29M
Ave Daily Vol211,061
Short Int17.50%

Current

Price$225.83
Market Cap$4.51B
Asbury Automotive Group, Inc. operates as a holding company, which engages in the automotive dealership. Its services include oil change, car brakes, changing tires, check engine light, battery, and wheel alignment. The company was founded in 1995 and is headquartered in Duluth, GA.

Publicly traded companies mentioned herein: Asbury Automotive Group Inc (ABG), Carvana Co (CVNA), Lithia Motors Inc (LAD), Shift Technologies Inc (SFT), Vroom Inc (VRM)

Highlights

The presenter is long shares of Asbury Automotive Group Inc (ABG), which has traditionally operated brick-and-mortar car dealerships. ABG recently announced its digital strategy, centered around its e-commerce platform Clicklane, to compete with online automotive retailers such as CVNA, LAD, VRM, and SFT. Clicklane is expected to complete its roll out to all stores by Q1’21. The presentation from ABG seems very similar to LAD’s strategy but its targets appear more modest and achievable than that of LAD. The company’s five-year target implies a 2025 EPS of $30 – $35, a figure he considers exceptionally strong given ABG’s ~$144 share price. Using a modest ~10x earnings multiple yields a ~$330 share price value on 2025 numbers. He also believes the stock is cheap on next year’s numbers, which limits the downside risk to ABG. 

Highlighting the five-year targets of ABG and LAD supports his belief that ABG’s plan is more conservative:

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Idea Discussion

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