3 models fit Sonic Automotive Inc. Common Stock and they disagree: 0 of 3 land within 15% of the average.
Two or more of our models back this value.
Near fair value(i)Bronze57
Valued as a mature, profitable company: Discounted cash flow, P/E comparison, EV/EBITDA comparison, Graham number, and Dividend discount.
ACCE opinionSonic Automotive Inc. Common Stock (SAH)
Fair value (3 models)
$63.64
ACCE price target
$68.00
Rating
Fairly valued
Horizon
12 months
Fair value published on 18 Oct 2026, 00:00 CEST; previously $87.68 since 14 Oct 2026, 00:00 CEST.
ACCE price target published on 11 Oct 2026, 00:00 CEST.
Price used: $61.28 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow, Dividend discount, EV/EBITDA comparison, Graham number, and P/E comparison.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
3.7% below
+3.9% to fair value
ACCE score
47
out of 100
Analysts
50% buy
12 covering
P/E
9.8x
forward 8.4x
1-year return
-6.4%
Dividend yield
2.60%
Sonic Automotive Inc. Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
Sonic Automotive runs a network of franchised new and used car dealerships across the US, with its EchoPark used-vehicle stores and a parts, service and finance operation that earns most of its gross profit. The structural case rests on the aftermarket: service and parts revenue tends to hold up through a cycle, and the company has been expanding its high-margin finance and insurance income per unit. Revenue growth of 7.6% and a return on equity of 20.6% stand out for a dealer group that trades at 9.7 times trailing earnings and 8.4 times forward. The stock is cheap on those numbers, but the operating margin of 3.4% is thin, so earnings are highly sensitive to vehicle volumes and interest rates. The Score of 45 out of 100 says the screen sees more weakness than strength, which makes this a name worth a closer look at the cash flow and inventory figures before drawing any conclusion.
⚠ Investor warnings · 4 flagsAI-assisted·How I use AI
high
Earnings declining despite revenue growth
Revenue rose 7.6% year over year, but earnings fell 12.3%. Net margin is only 1.4% and operating margin 3.4%, so thin profitability leaves little cushion.
high
Heavy leverage
Debt to equity is 3.96. Equity is thin relative to borrowings, which magnifies the impact of any downturn in dealership sales or financing conditions.
moderate
Elevated short interest
Short interest stands at 24.4% of shares outstanding, a high level that signals sustained bearish positioning and could add volatility.
moderate
Score down sharply over 90 days
The ACCE score fell from 53 to 45 over 90 days, with the quality and growth components weak at 40 and 28 respectively.
AI research notes
AI-assisted·How I use AIWritten Oct 19, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Free cash flow over the last twelve months reached $418M, and the stock's free cash flow yield is 20.8%.
Revenue grew 7.6% year over year, and the five-year average annual growth is 9.2%.
Analysts' mean price target of $88.91 sits 39.8% above the current share price, and half of covering analysts rate it Buy or Strong Buy.
Why it could disappoint
Net margin is only 1.4%, and return on invested capital of 1.8% is thin for the capital tied up in the business.
Debt to equity stands at 3.96, so the balance sheet carries heavy borrowing relative to shareholder equity.
The stock trades 3.7% below the model fair value of $63.64, and the reverse DCF implies 11.4% yearly cash flow growth forever to justify the price.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Oct 29, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
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Where SAH's valuation models land
Price
$61.28
Model fair value
$63.64
Model range
$16.28 to $122
Fair value $63.64
Price $61.28
The price sits inside the model range.
Model
Fair value
Upside
Discounted cash flow
Dividend discount
EV/EBITDA comparison
Graham number
P/E comparison
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Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
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+Conviction breakdown and growth / value / quality / momentum scores