Overview Asbury Automotive Group is an automotive retail and services operator that has combined multi-year top-line and equity growth with conservative balance-sheet metrics and volatile recent profitability. Growth Trends The company shows clear multi-year growth: five‑year EPS compounded at about 14.1% , revenue per share CAGR near 19.0% and book value per share CAGR roughly 40.5% , with revenu
Asbury Automotive Group is an automotive retail and services operator that has combined multi-year top-line and equity growth with conservative balance-sheet metrics and volatile recent profitability.
The company shows clear multi-year growth: five‑year EPS compounded at about 14.1%, revenue per share CAGR near 19.0% and book value per share CAGR roughly 40.5%, with revenue per share at $1,135.27 and diluted EPS at $28.12 in the most recent quarter (EPS Diluted & Revenue per Share, Revenue & EPS Growth).
Cash generation has been a relative strength: operating cash flow historically exceeded net income by about 2.56x and net income exhibits stability (avg/stdev ≈ 3.44), while liquidity and leverage remain conservative with a current ratio of 1.85, debt-to-equity around 0.79 and interest coverage near 99x (Earnings Quality Analysis, Strategic Capital Allocation, Return on Equity (ROE), Revenue & Net Income).
There are notable weaknesses on the profitability and volatility fronts. Margins have retrenched from earlier highs to recent levels of about 17.1% gross, ~6.0% operating and a thin 2.5% net margin in the latest quarter (Profit Margin Trends). Return on equity has settled in the low‑teens (12.6%) after peaks above 30%–50% in prior years (Return on Equity (ROE)). Earnings also swung sharply after 2022: TTM net income peaked near $997.3M at 2022‑12‑31, dropped to $430.3M at 2024‑12‑31, then recovered to roughly $547.7M as of 2026‑03‑31, and EPS year‑over‑year moved from troughs of about -39.6% to a 14.3% gain—evidence of material earnings volatility (Revenue & Net Income, Revenue & EPS Growth).
Key fundamental metrics to monitor going forward include net profit margin (currently ~2.5%) and operating margin trends, the relationship of operating cash flow to net income, quarterly EPS and revenue‑per‑share trajectories (latest EPS $28.12, RPS 1,135.27), changes in leverage and liquidity (debt/equity ~ 0.79; current ratio ~ 1.85), and the P/E multiple (most recent ~6.95x) as these will indicate whether returns, cash conversion and capital allocation are stabilizing or remain uneven (Profit Margin Trends, Earnings Quality Analysis, EPS Diluted & Revenue per Share, Strategic Capital Allocation, Price-to-Earnings (PE) Ratio Trend).
The foundation of business quality and long-term value creation
ASBURY AUTOMOTIVE GROUP INC’s revenue shows a long-term upward trajectory from the mid‑2010s into the 2020s, with periodic large year‑end totals (notably $7.21B at 2019‑12‑31, $11.57B at 2022‑12‑31 and $13.63B at 2025‑12‑31). Over the most recent quarterly sequence, revenue has been in the roughly $4.1B–$4.5B range (Q2 2024–Q1 2026), with a peak near $4.50B in 2024‑12‑31 and the most recent quarter showing a modest decline to $4.11B.
Net income has been more variable than revenue. After larger year‑end earnings in 2022 (net income $353.2M), there was a drop at 2023‑12‑31 ($55.5M), followed by a recovery through 2024–2025 with quarterly net income rising to $207.1M at 2025‑12‑31 and settling at $187.8M in the latest quarter. The most recent quarterly revenue was $4.11B. The most recent quarterly net income was $187.8M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Apr 2025 to Mar 2026
Analyzing long-term margin stability and competitive positioning
ASBURY AUTOMOTIVE GROUP INC’s margins show a clear decline from the elevated levels seen in 2020–2021 toward more moderate, stable percentages in recent periods. Gross margin held near 17% in the last two full-year observations (17.2% at 2024-12-31; 17.1% at 2025-12-31). Operating margin eased slightly from 6.2% at 2024 year-end to 6.0% at 2025 year-end. The net profit margin moved from 2.7% at 2025-12-31 to 2.5% in the latest quarter ending 2026-03-31, making the most recent net margin the lowest shown since the mid-2010s aside from several prior troughs.
Earlier in the series there are pronounced inflection points: very high reported margins in 2016 (gross 47.5%, operating 36.3%) and a pronounced peak in 2021 (gross 30.0%, operating 12.5%, net 8.4%), as well as a mid-2016 operating trough of -6.2%, indicating substantial variability historically. The most recent values are: gross margin 17.1% (2025-12-31), operating margin 6.0% (2025-12-31), and net profit margin 2.5% (2026-03-31).
Understanding Profit Margins
Between Apr 2025 and Mar 2026, Asbury Automotive Group Inc converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
ASBURY AUTOMOTIVE GROUP INC’s trailing twelve‑month net income shows a pronounced rise from the mid‑2010s into a peak in 2022, climbing from the low hundreds of millions (roughly $168–$254M between 2014–2020) to a high of $997.3M at 2022-12-31. After that peak there is a clear decline through 2023–2024, with net income falling to $430.3M at 2024-12-31 before recovering into the mid‑$500M range across 2025–2026; the most recent TTM net income is $547.7M as of 2026-03-31. Key inflection points are the sharp expansion through 2021–2022 and the subsequent contraction through 2024, followed by a partial rebound in 2025–2026.
Operating cash flow (TTM) is only reported in the provided dataset for earlier periods, most recently at $652.5M on 2020-12-31 (and $84.2M at 2014-12-31). At the 2020 year end operating cash flow exceeded net income for that period ($254.4M), but no more recent operating cash flow TTM values are available in the chart to compare against the post‑2020 net income movements. The most recent Net Income (TTM) was $547.7M and the most recent Operating Cash Flow (TTM) shown was $652.5M.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
Over the most recent quarters, ASBURY AUTOMOTIVE GROUP INC's ROE has settled in the low-teens, nudging up slightly from 12.3% at the 2024 year end to 12.6% at the 2025 year end. Earlier in the window there were higher mid‑to‑high teen readings—17.0% (2024‑03‑31) and 18.6% (2023‑12‑31)—after a notable decline from a 34.3% peak at 2022‑12‑31; the series also shows a short-lived uptick to 27.7% on 2023‑09‑30 before resuming a downward trajectory into 2024–2025.
Looking further back, ROE reached much higher levels in prior years (53.8% in 2015, mid‑30s in 2017–2019 and 2022), and the recent readings remain well below those historical peaks. The most recent quarterly Return on Equity was 12.6%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
ASBURY AUTOMOTIVE GROUP INC’s financing cash flow shows notable volatility in the recent TTM data. After large positive inflows in 2021 ($2.93B) and 2023 ($1.18B), financing turned negative around the 2024 year-end (TTM -$510.3M) and remained negative into early 2025 (TTM -$499.4M) before swinging back to positive by 2025-12-31 ($653.1M) and moderating to $271.7M by 2026-03-31. Investing cash flow moved from a material negative in 2021 (TTM -$3.92B) to positive in 2022 (TTM $464.7M) and then to a negative TTM position of -$137.2M as of 2024-12-31, indicating a change in net investing activity over those periods.
Operating cash flow in the dataset is only reported through 2020, with a TTM operating cash flow of $652.5M at 2020-12-31. Taken together, the most recent available TTM values in the chart are: Operating Cash Flow TTM $652.5M, Investing Cash Flow TTM -$137.2M, Financing Cash Flow TTM $271.7M.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
ASBURY AUTOMOTIVE GROUP INC's trailing twelve-month P/E has moved in a wide band over the past decade, with a multi-year low around 3.1x in 2022-09-30 and an earlier high of 13.3x in 2014. A clear inflection occurred in 2022 when the ratio bottomed near 3x, then trended higher through 2023 and into 2024, reaching 11.0x at 2024-12-31.
In the most recent quarters the P/E has pulled back from that late-2024 peak: it was 8.2x on 2025-06-30, rose to 9.2x on 2025-12-31, then declined to 6.9x on 2026-03-31. The most recent Price-to-Earnings (PE) ratio was 6.9x.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.