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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2038
Positioning
Market Dominance
Retail Trade
Retail
$11.5B
Roger S. Penske
Penske Automotive Group, Inc., a diversified transportation services company, operates automotive and commercial truck dealerships. The company operates through four segments: Retail Automotive, Retail Commercial Truck, Other, and Non-Automotive Investments. It imports and distributes Western Star heavy-duty trucks, MAN heavy and medium duty trucks, buses, and Dennis Eagle refuse collection vehicles with associated parts.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = PAG ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$ARCO Arcos Dorados Holdings Inc. | 73 | 85 | 89 | 65 | - | - | 29.1% | 5.1% | 46.8% | 7.3% | 3.3% | 3.2% | 3.4% | 153.0x | $1.5B | VS | |
$IMKTA INGLES MARKETS INC | 70 | 73 | 89 | 76 | 11.3x | 4.1x | 5.3% | 3.3% | 23.9% | 2.2% | 1.6% | -5.4% | 1.0% | 32.0x | $1.3B | VS | |
$SGU STAR GROUP, L.P. | 69 | 82 | 79 | 63 | - | - | 26.2% | 7.8% | 31.5% | 6.4% | 4.1% | 1.0% | 6.1% | 63.0x | $399M | VS | |
$EZPW EZCORP INC | 68 | 77 | 82 | 89 | 7.2x | 4.2x | 12.0% | 6.4% | 58.6% | 11.7% | 8.6% | 9.7% | 0.0% | 51.0x | $1.2B | VS | |
$HTHT H World Group Ltd | 68 | 91 | 44 | 84 | - | - | 24.9% | 4.9% | 100.0% | 21.8% | 13.0% | 6.2% | 2.9% | 45.0x | $101.1B | VS | |
$DDL Dingdong (Cayman) Ltd | 68 | 86 | 82 | 57 | - | - | 42.4% | 4.0% | 100.0% | 0.9% | 1.3% | 12.3% | 0.0% | 201.0x | $1.2B | VS | |
$SBH Sally Beauty Holdings, Inc. | 68 | 83 | 92 | 77 | 5.1x | 2.3x | 27.5% | 6.9% | 51.6% | 8.9% | 5.3% | -0.4% | 0.0% | 177.0x | $1.6B | VS | |
$SPH SUBURBAN PROPANE PARTNERS LP | 67 | 80 | 90 | 53 | - | 13.0x | 18.6% | 4.7% | 60.7% | 14.4% | 7.4% | 7.9% | 7.1% | 202.0x | $1.2B | VS | |
$IHG INTERCONTINENTAL HOTELS GROUP PLC /NEW/ | 67 | 63 | 81 | 67 | - | - | -29.5% | 13.1% | 58.6% | 40.7% | 27.4% | 6.8% | 1.3% | - | $21.5B | VS | |
$ROST ROSS STORES, INC. | 67 | 63 | 55 | 83 | 25.2x | 16.5x | 34.8% | 13.3% | 28.0% | 11.6% | 9.1% | 10.4% | 1.0% | 26.0x | $51.6B | VS | |
$PAG PENSKE AUTOMOTIVE GROUP, INC. | 50 | 41 | 66 | 49 | 11.8x | 9.8x | 16.4% | 5.5% | 16.6% | 4.2% | 3.1% | -0.0% | 2.9% | 27.0x | $11.5B | ||
| SECTOR BENCH | - | - | - | - | - | 21.4x | 9.1x | 8.9% | 2.9% | 36.2% | 3.9% | 1.6% | 3.8% | 0.0% | 0.6x | - | REF |
PENSKE AUTOMOTIVE GROUP, INC. (PAG) receives a "Reduce" rating with a composite score of 49.8/100. It ranks #2038 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Roger S. Penske
Chief Executive Officer
Labor Force
26,500
41
49
81
Audit Verdict: Average governance indicators based on financial metrics.
No recent insider transactions available for PAG
In-line with peers — no strong momentum signal
Trading at a discount to fundamentals — favorable entry valuation
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Moderate investment profile
Mid-range overall rating
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Relative valuation derived from Retail Trade sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for PAG.
View All RatingsConservative accounting — High cash conversion efficiency
Material decline in asset turnover efficiency detected
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 41 | 32 | +9ALPHA |
| MOMENTUM | 49 | 46 | +3NEUTRAL |
| VALUATION | 66 | 73 | -7DRAG |
| INVESTMENT | 49 | 88 | -39DRAG |
| STABILITY | 81 | 87 | -6DRAG |
| SHORT INT | 18 | 4 | +14ALPHA |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 13.3% vs WACC 8.9% (spread +4.4%)
GM 17% vs sector 36%, OM 4% vs sector 4%
Capital turnover 5.16x
Rev growth -0%, 10yr history
Interest coverage 4.6x, Net debt/EBITDA 5.0x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
PENSKE AUTOMOTIVE GROUP, INC. receives a Reduce rating from our analysis, with a composite score of 49.8/100 and 2 out of 5 stars, ranking #2038 out of 7,333 stocks. PAG's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
PAG's quality score of 41/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 16.4% (sector avg: 8.9%), gross margins of 16.6% (sector avg: 36.2%), net margins of 3.1% (sector avg: 1.6%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
PAG's value score of 66/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 11.77x, an EV/EBITDA of 9.84x, a P/B ratio of 1.92x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
With an investment score of 49/100, PAG exhibits moderate growth-oriented spending. Key growth metrics include revenue growth of -0.0% vs. a sector average of 3.8% and a return on assets of 5.5% (sector: 2.9%). The company appears to be balancing growth investments with capital returns, though the pace of investment may not be enough to accelerate top-line growth meaningfully.
PAG is currently showing below-average momentum at 49/100, which may indicate weakening institutional interest or negative sentiment shifts. Revenue growth stands at -0.0% year-over-year, while a beta of 0.71 reflects its sensitivity to broader market moves. Investors should note that declining momentum can precede further price weakness, though contrarian opportunities sometimes emerge at these levels.
PAG shows good financial stability with a score of 81/100. Key stability metrics include a beta of 0.71 and a debt-to-equity ratio of 27.00x (sector avg: 0.6x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
PENSKE AUTOMOTIVE GROUP, INC.'s short interest score of 18/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include elevated leverage (D/E: 27.00x). At $11.5B (large-cap), PAG carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
PAG pays a solid dividend yield of 2.9%, contributing an income component to total returns. This moderate yield suggests a balance between returning capital to shareholders and retaining earnings for reinvestment — a common profile among quality compounders.
PENSKE AUTOMOTIVE GROUP, INC. is a large-cap company in the Retail Trade sector, ranked #0 of 50 in its sector (100th percentile) and #2038 of 7,333 overall (72nd percentile). Key comparisons include ROE of 16.4% exceeding the 8.9% sector median and operating margins of 4.2% above the 3.9% sector average. This top-quartile standing reflects exceptional competitive strength relative to Retail Trade peers.
While PAG currently exhibits a REDUCE profile, superior opportunities exist within the RETAIL TRADE sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Retail Trade Alpha →Quant Factor Profile
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Improvement in Short Int. (18) would have the largest impact on the composite score.
EV/EBITDA 8% ABOVE SECTOR MEDIAN
ROE 84% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 54% BELOW SECTOR MEDIAN
AUDIT DATA AS OF SEP 30, 2025 (Q2 FY2025)
We rate PENSKE AUTOMOTIVE GROUP, INC. (PAG) as a Reduce with a composite score of 49.8/100 at a current price of $161.83. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in stability (81th percentile) and value (66th percentile), which together account for the majority of the composite score. All factors score above the 40th percentile, indicating no material weakness in the quantitative profile. We assign a Narrow Moat rating (43/100), Low uncertainty, and Standard capital allocation.
Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
PENSKE AUTOMOTIVE GROUP, INC. holds a top-quartile position (#0 of 50) within the Retail Trade sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 49.8/100 places it at rank #2038 in our full 7,333-stock universe. With a $11.5B market capitalization, PENSKE AUTOMOTIVE GROUP, INC. operates at meaningful scale within the Retail Trade sector, providing competitive advantages in distribution, procurement, and customer reach.
Revenue contraction of -0% combined with momentum at the 49th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 17% (-19.6pp vs sector) narrow to operating margins of 4% (+0.3pp vs sector) and net margins of 3.1%, yielding a gross-to-net conversion rate of 18%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.
At a current price of $161.83, PENSKE AUTOMOTIVE GROUP, INC. is trading near fair value based on current fundamentals. Our value factor score of 66/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 11.8x (a 45% discount to the sector median of 21.4x), EV/EBITDA of 9.8x (near the sector median), P/B of 1.9x, P/S of 0.4x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.
Returns on equity of 16.4% exceed the cost of equity for most companies, indicating genuine shareholder value creation and a reinvestment engine that compounds wealth over time.
A value factor score of 66/100 suggests the market is underpricing these fundamentals, creating a potential margin of safety for new investors.
A conservative balance sheet (27% D/E) provides financial flexibility for acquisitions, buybacks, or weathering economic downturns without dilution.
A 2.87% dividend yield provides income while you wait, and dividends historically account for a significant portion of total equity returns.
The Reduce rating (composite 49.8/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
We assign a Low uncertainty rating to PENSKE AUTOMOTIVE GROUP, INC.. The company exhibits strong financial stability with a beta of 0.71, conservative leverage (27% D/E), and a stability factor in the 81th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.
We identify no major risk factors at this time. The company's stability factor sits at the 81th percentile with quality at the 41th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.
Key risk mitigants include: conservative leverage (27% D/E) limits balance sheet risk; above-average stability (81th percentile) suggests predictable business dynamics; a 2.87% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate PENSKE AUTOMOTIVE GROUP, INC.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 16.4%, and the balance sheet is managed within acceptable parameters (D/E: 27%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; PENSKE AUTOMOTIVE GROUP, INC. falls short on at least one dimension.
There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 2.87% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.
In summary, PENSKE AUTOMOTIVE GROUP, INC. receives a Reduce rating with a composite score of 49.8/100 (rank #2038 of 7,333). Our quantitative framework assigns a Narrow Moat (43/100, trend: stable), Low uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 57/100.
Our analysis does not support a constructive view on PENSKE AUTOMOTIVE GROUP, INC. at this time. The combination of the current quantitative profile, low uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We assign PENSKE AUTOMOTIVE GROUP, INC. a Narrow Moat rating with a composite moat score of 43/100. The ROIC-WACC spread of +4.4% is the primary signal of economic value creation. The company possesses identifiable competitive advantages, though they are less entrenched than those of wide-moat peers. Our analysis indicates that PENSKE AUTOMOTIVE GROUP, INC. can sustain above-average returns on invested capital for at least 10 years, with the strongest contributor being growth durability at 10.5/20.
The strongest moat sources are growth durability (10.5/20) and reinvestment efficiency (10/20). Rev growth -0%, 10yr history. Capital turnover 5.16x. These pillars form the core of PENSKE AUTOMOTIVE GROUP, INC.'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include economic value creation (5.4/20) and financial resilience (6.8/20). ROIC 13.3% vs WACC 8.9% (spread +4.4%). Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect PENSKE AUTOMOTIVE GROUP, INC.'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include declining revenues (-0%) that pressure the earnings outlook, returns on equity of 16.4% driving shareholder value creation. The margin cascade from 17% gross to 4% operating to 3.1% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality is adequate though not exceptional, with the quality factor at the 41th percentile.
The margin profile shows gross margins of 17%, operating margins of 4%, net margins of 3.1%. Return metrics include ROE of 16.4% and ROA of 5.5%. Relative to the Retail Trade sector, gross margins are 19.6 percentage points below the sector median of 36%, and ROE of 16.4% compares to a sector median of 8.9%.
The balance sheet reflects a conservatively managed balance sheet with D/E of 27%, a dividend yield of 2.87%, revenue growth of -0%. The sector median D/E is 1%, putting PENSKE AUTOMOTIVE GROUP, INC. at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Revenue decline of -0% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
Above 50MA
37.18%
Net New Highs
+51081
Tariff costs are becoming unsustainable for automakers, and they are going to have to raise prices or cut features, said the president of Sonic Automotive.
Penske Automotive Group, Inc. (NYSE: PAG), a diversified international transportation services company and one of the world's premier automotive and commercial truck retailers with operations across four continents and eight countries, announced today that it has completed the acquisition of Lexus of Orlando and Lexus of Winter Park, two high-performing Lexus dealerships serving the fast-growing Central Florida market.
Penske Automotive Group’s third quarter results broadly matched Wall Street’s revenue expectations, with relative stability in U.S. auto retail operations balancing weakness in commercial truck and U.K. businesses. Management attributed U.S. strength to a 9% rise in same-store new vehicle sales and higher service revenue, while higher BEV (battery electric vehicle) penetration and the expiration of a federal tax credit weighed on profits. CEO Roger Penske explained that “seasonality was coupled
Penske Automotive Group, a diversified international transportation services company, announced an 11% increase in its quarterly dividend to $1.19 per share, representing the 16th consecutive quarterly increase. The company has also completed acquisitions representing $2 billion in estimated annualized revenues year-to-date.
The Cherokee rejoins the compact and midsize vehicle markets after a three-year hiatus and will seek to compete with the Toyota and Honda hybrid vehicles.