Overview#

Asbury Automotive Group has released its financial results for the first quarter of 2026, showing that both earnings and revenue did not meet analysts' expectations. The company reported an adjusted earnings per share (EPS) of $5.37, which is lower than the anticipated $5.63. Additionally, revenue totaled $4.1 billion, falling short of the forecasted $4.38 billion. Following this news, Asbury's stock price decreased by 0.52% in pre-market trading, settling at $198.99.

Key Factors Impacting Performance#

The disappointing results can be attributed to several factors. Severe winter weather significantly disrupted operations, affecting sales of both new and used vehicles. Furthermore, Asbury is in the midst of transitioning to the Tekion Dealership Management System (DMS), a process expected to continue until fall 2026. Despite these challenges, the company has maintained a solid liquidity position and is actively divesting underperforming assets to realign its business strategy.

Financial Highlights#

  • Revenue: $4.1 billion, below the forecast of $4.38 billion.
  • Earnings per share: $5.37, missing the expected $5.63.
  • Gross profit: $727 million, with a margin of 17.7%, an increase of 22 basis points from the previous year.
  • Adjusted operating margin: 5.0%.
  • Adjusted net income: $102 million.

Market Reaction#

In response to the earnings report, Asbury’s stock experienced a slight decline, reflecting investor concerns over the missed forecasts and ongoing operational hurdles. The stock is currently trading within its 52-week range, which has seen a high of $274.5 and a low of $184.61, now just 8% above its lowest point. Despite the recent challenges, some analysts suggest that the stock may be undervalued based on its price-to-earnings (P/E) ratio of 7.74 and a price/earnings to growth (PEG) ratio of 0.46, indicating potential growth opportunities.

Future Outlook#

Looking ahead, Asbury Automotive is optimistic about EPS growth in the upcoming quarters, as it navigates through its current operational challenges and continues its strategic initiatives.