Penske Automotive Group, Inc. (PAG)
Valuation Overview•Is Penske Automotive Group, Inc. Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Fragile underlying quality score of 35/100; weak margins or elevated debt leverage warrant caution.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Mixed fundamental profile with offsetting strengths and weaknesses.
Wall Street sentiment is generally neutral. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
PAG struggles with subpar profitability and pressured margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company exhibits steady, low-single-digit revenue growth however, earnings have severely contracted over the same period. However, profitability remains a major concern with severely compressed operating margins (3.9%).
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $7.9B | -0.2% | +4.6% | +9.2% | +5.1% | |
| EBITDA | $333.8M | — | -3.5% | — | — | |
| Net Income | $234.5M | -3.5% | -12.2% | — | +11.1% | |
| EPS (Diluted) | $3.56 | -2.5% | -8.7% | +16.0% | +14.6% | |
| Free Cash Flow | $152.4M | -8.7% | -14.3% | -6.1% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 16.4% | 16.5% | 16.8% | 15.9% |
| Operating Margin | 3.9% | 4.3% | 4.7% | 3.9% |
| Net Margin | 2.9% | 3.2% | 3.8% | 3.0% |
| FCF Margin | 1.4% | 2.4% | 3.1% | 2.6% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $2.91 | $3.05 | +4.8% | ||
| Q1'26 | $3.19 | $2.91 | -8.8% | ||
| Q4'25 | $3.48 | $3.23 | -7.2% | ||
| Q3'25 | — | $3.78 | — | ||
| Q2'25 | $3.28 | $3.39 | +3.4% | ||
| Q1'25 | $3.37 | $3.54 | +5.0% | ||
| Q4'24 | $3.48 | $3.36 | -3.4% | ||
| Q3'24 | $3.39 | $3.61 | +6.5% |
Total return is +6.1% (1Y), lagging the benchmark by -18.9%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +12.6% | +3.3% | — |
| 1Y | +6.1% | -18.9% | +3.2% |
| 3YCAGR | +7.0% | -13.2% | +8.8% |
| 5YCAGR | +21.6% | +8.0% | +24.6% |
| 10YCAGR | +18.4% | +4.8% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Penske Automotive Group, Inc. (PAG) valuation, health, and returns.
Penske Automotive Group, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -48.1% downside from DCF intrinsic value of $90.95)
Penske Automotive Group, Inc. has multiple valuation anchors: DCF Intrinsic Value: $90.95 | Peer Relative Fair Value: $105.71 | Wall Street Analyst Target: $176.75 (implying +0.9% upside). A convergence of these signals offers higher conviction.
Penske Automotive Group, Inc. displays weak financial health with a composite quality score of 35/100, supported by a Altman Z-Score of 2.5 (grey zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 6.9%.
Penske Automotive Group, Inc. pays a 3.0% dividend yield, covered by a 37% payout ratio with 14 years of growth, supplemented by a 1.4% buyback yield.
Penske Automotive Group, Inc.'s current growth trajectory is Decelerating. The company achieved -0.2% 1Y revenue growth and -2.5% 1Y EPS growth, compared to its 3Y revenue CAGR of +4.6%.
Wall Street consensus is Buy based on 26 analysts, beating EPS expectations in 50% of recent quarters with a 1-quarter streak. The consensus price target represents a +0.9% change from current levels.
Investment risks for Penske Automotive Group, Inc. include: -25.3% 1-year max drawdown. Volatility risk is characterized by a beta of 0.65x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.