GET DAILY SIGNALSAsbury Automotive Group (ABG) Posts Q3 2026 Results: Revenue -8% as Tekion Rollout Completes
Key Takeaways
- Asbury Automotive Group (NYSE: ABG) reported third quarter 2026 revenue of $4.4 billion, down 8% from a year earlier.
- Net income was $105 million ($5.84 per diluted share), down 29% from $147 million in the prior-year quarter.
- Adjusted earnings per share (EPS) came in at $6.16, down 21% year over year and below the Wall Street consensus estimate of $6.42.
- Gross profit reached $732 million (16.6% margin), while adjusted operating margin was 4.9%.
- The company completed its company-wide Tekion dealership management system conversion and its Total Care Auto rollout during the quarter.
- A Federal Trade Commission (FTC) administrative proceeding against the company was dismissed in early October.
Earnings Context and Why It Matters
Asbury Automotive Group is one of the largest automotive retail and service companies in the U.S., operating 155 new vehicle dealerships and a growing parts, service, and finance and insurance (F&I) business. This report mattered because it marked the culmination of one of the company's most ambitious technology initiatives — moving its entire dealer network onto a single Tekion platform. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry. Investors were also watching how new vehicle margins are normalizing after a period of elevated pricing, how the used vehicle business is recovering, and whether management can bring leverage down toward its long-term target. The quarter mixed a profit decline with an operational milestone, giving shareholders a clearer view of the company's post-conversion earnings power.
Reported Results
Asbury reported total revenue of $4.4 billion for the third quarter of 2026, an 8% decline from $4.8 billion in the prior-year period and below the consensus estimate of roughly $4.51 billion. Gross profit was $732 million with a gross margin of 16.6%, while adjusted operating margin was 4.9%.
Net income was $105 million, or $5.84 per diluted share, down 29% from $147 million ($7.52 per share) a year ago. Adjusted net income, a non-GAAP measure that excludes items such as Tekion implementation costs, was $111 million, or $6.16 per diluted share, down 21% year over year and below the analyst consensus of $6.42. Management noted that a non-cash deferral headwind tied to Total Care Auto (TCA) reduced adjusted EPS by $0.69; without that impact, adjusted EPS would have been $6.85.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $218 million, and adjusted selling, general, and administrative (SG&A) expenses ran at 67.4% of gross profit, reflecting the peak of the Tekion conversion workload. Used retail volume rose 4.5% sequentially, and the company ended the quarter with $1.0 billion in liquidity and a transaction-adjusted net leverage ratio of 3.5x.
Market Reaction and Investor Sentiment
Shares of ABG moved higher following the report, as investors weighed the earnings miss against the strategic milestone of completing the Tekion rollout. While adjusted EPS of $6.16 came in below the $6.42 consensus estimate, the market appeared to focus on the forward-looking story: the heavy implementation work is now behind the company, and management signaled that SG&A leverage should improve beginning in the fourth quarter. The early dismissal of the FTC administrative proceeding also removed a regulatory overhang that had weighed on sentiment around the company's F&I practices. The divergence between headline results and the longer-term efficiency narrative highlights how investors are prioritizing execution momentum over a single quarter's profit decline.
Forward Outlook and Key Factors to Monitor
With the Tekion conversion now complete across all active stores, the central question for investors is how quickly efficiency gains translate into the income statement. Management said it expects adjusted SG&A as a percentage of gross profit to reach the low-60% range by the end of 2027, driven by productivity improvements as store teams adapt to the new system.
Several factors will shape the coming quarters. First, watch whether the used vehicle recovery continues — management anticipates used volume to increase on a year-over-year basis in the fourth quarter after several consecutive quarters of improvement. Second, monitor new vehicle margins as pricing normalizes and electric vehicle (EV) volume laps the prior year's tax-credit-driven comparisons. Third, track progress on deleveraging: the company aims to bring its net leverage ratio below 3x by mid-2027, after which management said it would consider renewed share buybacks and tuck-in acquisitions.
Finally, keep an eye on the continued integration of Total Care Auto, which remains a non-cash deferral headwind into 2027, and on parts and service performance, which management acknowledged was not where it wanted it to be this quarter but expects to improve as the technology transition settles.
Using Tickeron Tools for Deeper Analysis
In my own review of the quarter, I turned to Tickeron’s AI Screener to compare ABG against peers on key metrics like margins and leverage trends. The tool helped surface similar names in the sector that showed stronger sequential volume gains, giving extra context to how Asbury’s results fit into the broader auto retail picture. It is a practical way to cross-check earnings data with technical and fundamental filters without spending hours on manual screens.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
ABG's RSI Indicator ascends from oversold territory
The RSI Oscillator for ABG moved out of oversold territory on October 15, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 24 similar instances when the indicator left oversold territory. In 24 of the 24 cases the stock moved higher. This puts the odds of a move higher at 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 22, 2026. You may want to consider a long position or call options on ABG as a result. In 64 of 93 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 69%.
The Moving Average Convergence Divergence (MACD) for ABG just turned positive on October 15, 2026. Looking at past instances where ABG's MACD turned positive, the stock continued to rise in 35 of 45 cases over the following month. The odds of a continued upward trend are 78%.
Following a +4.99% 3-day Advance, the price is estimated to grow further. Considering data from situations where ABG advanced for three days, in 219 of 314 cases, the price rose further within the following month. The odds of a continued upward trend are 70%.
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
The 50-day moving average for ABG moved below the 200-day moving average on September 24, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ABG declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 70%.
The Aroon Indicator for ABG entered a downward trend on October 23, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 51 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.791) is normal, around the industry mean (1.359). P/E Ratio (6.425) is within average values for comparable stocks, (11.327). Projected Growth (PEG Ratio) (0.449) is also within normal values, averaging (0.695). Dividend Yield (0.005) settles around the average of (0.012) among similar stocks. P/S Ratio (0.207) is also within normal values, averaging (0.919).
The Tickeron SMR rating for this company is 60 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 74 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 74 (best 1 - 100 worst), indicating slightly worse than average price growth. ABG’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. ABG’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 85, placing this stock worse than average.
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Fundamental Analysis Ratings
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General Information
an operator of an automotive retailers
Industry AutomotiveAftermarket
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