GET DAILY SIGNALSSonic Automotive (SAH) Posts Record Revenue in Q3 but Misses EPS Estimates
Key Takeaways
- Sonic Automotive (SAH) posted record total revenue of roughly $4.0 billion for the third quarter of fiscal 2026, up about 0.4% year over year.
- Adjusted earnings per share (EPS) came in at $1.30, below the analyst consensus estimate of $1.66.
- GAAP (Generally Accepted Accounting Principles) diluted EPS was $1.28, compared with $1.33 in the prior-year quarter.
- Total gross profit reached a record $617.5 million, helped by all-time-high fixed operations gross profit of $265.4 million.
- EchoPark and Powersports delivered strong growth, while the core Franchised Dealerships segment saw revenue and gross profit decline.
- The board raised the quarterly dividend to $0.41 per share, up from $0.38 a year earlier.
- For more detail on this ticker's Major News, Today's Price Move, Price Targets, and Forecast, explore the additional pages available for SAH.
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Earnings Context and Why It Matters
Sonic Automotive stands as one of the largest automotive retailers in the country, running franchised dealerships along with its used-vehicle EchoPark brand and an expanding Powersports operation. The third quarter of fiscal 2026 serves as an important checkpoint for how the company is handling affordability challenges across the industry, changes in electric vehicle demand, and varying vehicle margins. With new-vehicle gross profit per unit facing pressure sector-wide, I am watching whether Sonic's diversified approach can counter softness in its main franchise business. These results also inform capital allocation choices, given the ongoing share repurchase program and the recent dividend increase.
Reported Results
For the third quarter ended September 30, Sonic Automotive reported total revenue of $3,988.8 million. That figure marks a quarterly record and reflects a modest 0.4% increase from $3,973.8 million a year earlier, though it fell slightly short of the analyst consensus near $4.03 billion. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Net income declined to $41.1 million from $46.8 million in the prior-year period. Diluted EPS from continuing operations reached $1.28 versus $1.33 a year ago. On an adjusted basis, EPS came in at $1.30, missing the consensus estimate of $1.66.
Total gross profit hit a record $617.5 million. Fixed operations posted an all-time quarterly high of $265.4 million in gross profit. The EchoPark segment increased revenue 14% to $596 million and achieved record gross profit of $58.9 million, while Powersports revenue jumped 35% to a record $113.7 million. In contrast, Franchised Dealerships revenue fell 3% to $3.3 billion, with new-vehicle same-store unit volume down 7% and gross profit off 2%.
Market Reaction and Investor Sentiment
The earnings release prompted a measured response, as the adjusted EPS shortfall weighed on sentiment. Record revenue and gross profit highlighted the strength of Sonic's diversified model, yet investors focused on the profit shortfall tied to higher SG&A expenses as a percentage of gross profit and softer same-store new-vehicle volume. Management pointed to a pull-forward of EV sales in the prior-year quarter, particularly in luxury brands and California stores, which made year-over-year comparisons tougher. Sentiment had already been cautious ahead of the report, and the mixed picture—solid EchoPark and Powersports growth offset by franchise softness—produced a tempered reaction.
Forward Outlook and Key Factors to Monitor
Looking ahead, attention should turn to how Sonic controls its cost structure, especially SG&A as a percentage of gross profit, which affected results this quarter. Management noted it remains within full-year guidance on that metric even with lower-than-expected fixed-operations growth.
The EchoPark segment continues to draw focus. The company guided fourth-quarter adjusted EBITDA to a range of $2 million to $4 million, which factors in $5 million to $7 million in added brand-marketing costs for its largest EchoPark branding push to date.
Trends in new- and used-vehicle gross profit per unit, EV inventory levels, and recovery in F&I gross profit per unit also warrant monitoring. On the capital front, the dividend increase to $0.41 per share and $528 million remaining under the share-repurchase authorization reflect confidence in long-term cash generation, with management balancing buybacks against potential acquisitions.
Exploring AI Tools for Deeper Analysis
In my own research process, I often turn to Tickeron’s AI Screener to quickly filter comparable names in the automotive retail space and spot shifting momentum. It helps surface technical patterns and fundamentals that complement traditional earnings reviews, giving a clearer view of relative performance without manual effort. This kind of tool has become a regular part of how I cross-check sector trends and identify ideas worth watching more closely.
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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.
SAH's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for SAH turned positive on October 05, 2026. Looking at past instances where SAH's MACD turned positive, the stock continued to rise in 38 of 42 cases over the following month. The odds of a continued upward trend are 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where SAH's RSI Oscillator exited the oversold zone, 18 of 21 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 86%.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 35 of 49 cases where SAH's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 71%.
The Momentum Indicator moved above the 0 level on October 16, 2026. You may want to consider a long position or call options on SAH as a result. In 63 of 88 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 72%.
Following a +5.93% 3-day Advance, the price is estimated to grow further. Considering data from situations where SAH advanced for three days, in 227 of 317 cases, the price rose further within the following month. The odds of a continued upward trend are 72%.
Bearish Trend Analysis
The 50-day moving average for SAH moved below the 200-day moving average on October 13, 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 SAH 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 72%.
The Aroon Indicator for SAH entered a downward trend on October 09, 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 SMR rating for this company is 46 (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 Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 62 (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 (1.961) is normal, around the industry mean (1.344). P/E Ratio (9.970) is within average values for comparable stocks, (11.336). Projected Growth (PEG Ratio) (0.597) is also within normal values, averaging (0.695). Dividend Yield (0.026) settles around the average of (0.011) among similar stocks. P/S Ratio (0.159) is also within normal values, averaging (0.919).
The Tickeron Price Growth Rating for this company is 63 (best 1 - 100 worst), indicating steady price growth. SAH’s price grows at a higher 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 78 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SAH’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 84, placing this stock better than average.
The Tickeron PE Growth Rating for this company is 85 (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.
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Fundamental Analysis Ratings
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General Information
an automotive retailer
Industry AutomotiveAftermarket
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