One-glance verdict
Overvalued
$120.38 our estimate vs market $220.03
Wall Street consensus: $211.88 (76.0% higher than our fair-value estimate)
83% above our estimate, beyond the bull case
Fundamentals snapshot
Penske Automotive Group, Inc.
PAG · NYQ · Consumer Cyclical · Auto & Truck Dealerships
Current price
$220.03
52-week range
$140.12 - $227.00
Market cap
$14.45B
Balance sheet
Stretched
4.88x Stretched
Net debt $9.30B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 0.1% last year.
- Reward Returns 15.8% on equity, ahead of 50% of its peers.
- Risk Stock trades 64.6% above its 5-year average P/E.
- Risk Net debt grew 26.4% over 3 years.
What this company does
Penske Automotive Group, Inc.
Penske Automotive Group operates car and commercial truck dealerships around the world, making most of its money from selling new and used vehicles. The company also earns a lot from services like repairs, parts, and financing, which often have higher profit margins (the percentage of each sale a company keeps as profit). This combination is important because the steady income from services helps the company do well even when fewer people are buying new cars.
How the company got here
Penske Automotive Group started in 1990 as United Auto Group. A major turning point came in 1999 when it was acquired by the Penske Corporation, led by racing legend Roger Penske. This led to a name change to Penske Automotive Group in 2009 and a strategic focus on expanding internationally, particularly in the United Kingdom. Over the years, the company has grown by acquiring other dealership groups and has diversified its business beyond just selling passenger cars.
What it actually does
Penske Automotive Group is a transportation services company that most people would recognize as a large group of car and truck dealerships. They sell new and used vehicles, from luxury cars to commercial trucks, in the United States and several other countries. Beyond just selling vehicles, they also provide maintenance and repair services, sell replacement parts, and help customers with financing and insurance products. The company also has a significant business in distributing commercial vehicles, engines, and power systems, mainly in Australia and New Zealand.
Retail Automotive
This is the company's largest business, making up the vast majority of its revenue. It consists of traditional car dealerships that sell new and used vehicles from a wide range of brands, with a special focus on premium and luxury names. When you buy a car from one of their dealerships, they also offer services like vehicle financing (arranging loans for customers), selling insurance products, and providing extended service contracts. This segment also includes their service centers that perform routine maintenance and repairs, which provides a steady stream of business.
Retail Commercial Truck
This part of the company operates dealerships that sell new and used commercial trucks from brands like Freightliner and Western Star. Think of the large trucks you see on the highway; this segment sells and services those vehicles for businesses. Similar to the car dealerships, these locations also offer parts, maintenance, and repair services to truck owners and fleet operators. This business provides diversification, meaning it helps the company rely on more than just the passenger car market.
Other
This smaller segment involves the distribution of commercial vehicles, engines, and power systems, primarily in Australia and New Zealand. Instead of just selling directly to individual customers, this part of the business acts as a wholesaler and distributor for major brands like MAN trucks and Dennis Eagle refuse collection vehicles. It's a way for the company to be involved in the transportation industry beyond the dealership model.
Non-Automotive Investments
This segment holds the company's investment in other transportation-related businesses, most notably a significant 28.9% stake in Penske Transportation Solutions (PTS). PTS is a large business that leases and manages huge fleets of trucks for other companies, offering services like truck rentals and supply chain logistics (managing the movement of goods). This investment gives Penske Automotive a piece of a different, but related, part of the transportation world without having to manage it day-to-day.
What management is betting on now
The company's leadership is focused on growing by acquiring more dealerships, especially those selling premium car brands and commercial trucks. They are also heavily investing in their parts and service business, which tends to have higher profit margins (the amount of profit made per dollar of sales) and is less affected by economic ups and downs than vehicle sales. Additionally, Penske is putting money into technology to improve the customer experience and is focused on sustainability by working to reduce its environmental impact.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$190.10M
FY2024 Q4
$131.60M
FY2025 Q1
$206.10M
FY2025 Q2
$118.90M
FY2025 Q3
$300.40M
FY2025 Q4
$25.10M
FY2026 Q1
$152.40M
FY2026 Q2
$131.80M
Revenue
$8.51B
Net income
$260.40M
Diluted EPS
3.96
Operating cash flow
$204.10M
Free cash flow
$131.80M
Fetching…
Sources
Revenue
$7.86B
Net income
$234.50M
Diluted EPS
3.56
Operating cash flow
$215.00M
Free cash flow
$152.40M
Fetching…
Sources
Revenue
$7.77B
Net income
$186.10M
Diluted EPS
2.83
Operating cash flow
$123.20M
Free cash flow
$25.10M
Fetching…
Sources
Revenue
$7.70B
Net income
$213.00M
Diluted EPS
3.23
Operating cash flow
$379.50M
Free cash flow
$300.40M
Fetching…
Sources
Revenue
$7.66B
Net income
$250.00M
Diluted EPS
3.78
Operating cash flow
$189.70M
Free cash flow
$118.90M
Fetching…
Sources
Revenue
$7.60B
Net income
$244.30M
Diluted EPS
3.66
Operating cash flow
$282.70M
Free cash flow
$206.10M
Fetching…
Sources
Revenue
$8.08B
Net income
$249.30M
Diluted EPS
3.73
Operating cash flow
$217.70M
Free cash flow
$131.60M
Fetching…
Sources
Revenue
$7.59B
Net income
$226.10M
Diluted EPS
3.39
Operating cash flow
$271.00M
Free cash flow
$190.10M
Fetching…
Sources
Is it cheap or expensive?
Fair value $120.38 vs current price $220.03
Wall Street consensus is the average analyst price target: $211.88 (76.0% higher than our fair-value estimate).
Our most-likely fair value is $120.38 a share — about 45.3% below today's price of $220.03, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $9.3B. Interest coverage 4.9x.
Net debt
$9.30B
Interest coverage
4.88x
Penske Automotive Group, Inc.'s profit covers its interest bill about 4.9 times over. which is stronger than every peer shown here.
Stretched
Worse cushion
Baseline
Better cushion
PAG
BASELINE
Penske Automotive Group, Inc.
Total debt $9.37B Interest coverage 4.88x This is the baseline the peer rows are being compared against.
Total debt $11.33B Interest coverage 2.94x -40% vs PAG Carries about 1.7x less debt cushion than PAG.
Total debt $16.56B Interest coverage 1.83x -62% vs PAG Carries about 2.7x less debt cushion than PAG.
Total debt $5.78B Interest coverage 3.36x -31% vs PAG Carries about 1.5x less debt cushion than PAG.
Total debt $5.53B Interest coverage 3.59x -26% vs PAG Carries about 1.4x less debt cushion than PAG.
Total debt $4.67B Interest coverage 2.86x -41% vs PAG Carries about 1.7x less debt cushion than PAG.
What you should know
The case for and against PAG
3 Rewards
3 Risks
Rewards
-
Revenue grew 0.1% last year.
-
Returns 15.8% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 64.6% above its 5-year average P/E.
-
Net debt grew 26.4% over 3 years.
-
Operating margin compressed from 5.3% to 4.0% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
15.99x
Forward P/E
15.29x
P/B
2.48x
P/S
0.45x
EV/EBITDA
16.95x
PEG ratio
2.18x
Profitability
How much profit each dollar creates
Gross margin
16.1%
Operating margin
4.0%
Net margin
2.8%
ROE
15.8%
ROA
4.2%
Health
Liquidity and balance-sheet strength
Debt / equity
1.61x
Current ratio
0.97x
Quick ratio
0.17x
Total debt
$9.37B
Total cash
$69.50M
Growth
How the business has been compounding
Revenue TTM
$31.84B
Revenue 5Y CAGR
5.6%
EPS TTM
13.76
EPS 5Y CAGR
-8.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$921.80M
Free CF TTM
$650.50M
FCF margin
2.0%
Dividend
Shareholder payout
Yield
2.6%
Payout ratio
40.1%
Last ex-div date
2026-08-14