MeritValue

AUTONATION, INC.

ANdata completeness 100%18 fiscal years on file

Data notes: no data for concept 'investmentsAtFairValue'; no data for concept 'netInvestmentIncome'; no data for concept 'realEstateImpairment'; no data for concept 'dividendsPaid'

The thesis, from the filings

AUTONATION, INC. earns about 46% on invested capital, and has bought back 49% of its shares over 5 years. The applicable estimate puts fair value near $275.16 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$25.8B1$27B2$26.9B3$26.8B3$27.6B3
Net income$1.37B4$1.38B5$1.02B6$692.2M6$649.1M6
Operating cash flow$1.63B7$1.67B8$724M9$314.7M9$111.9M9
Capital expenditure$215.7M10$329M11$410.3M12$328.5M12$309.4M12
Free cash flow (derived)$1.41B7$1.34B8$313.7M9−$13.8M9−$197.5M9
Total debt$340M13$50M14$440M15$630M16$200M16
Cash & equivalents$60.4M17$72.6M18$60.8M19$59.8M20$58.6M20
Diluted shares75.0M56.7M44.9M40.9M38.1M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$614.46
your share of equity
Profit it earned you last year
$170.37
Free cash flow it threw off
−$51.84
Debt you’d be carrying
$52.49

10 shares is a claim on $614.46 of net worth that earned you $170.37 and generated −$51.84 of cash last year, against $52.49 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
46% avg · 5y
FY21 54%FY22 73%FY23 45%FY24 27%FY25 31%

It earned an average 46% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
−49% shares · 5y

Share count is down 49% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has fallen 41% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.5.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
$275.16
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$1.02B
  • growthAssumed0.0%
Graham Number
$159.69
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000350698-24-000021 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0000350698-25-000029 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001628280-26-007800 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000350698-24-000021 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000350698-25-000029 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001628280-26-007800 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000350698-24-000021 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000350698-25-000029 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001628280-26-007800 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000350698-24-000021 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000350698-25-000029 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001628280-26-007800 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000350698-23-000026 (CommercialPaper)
  14. 10-K · period ending 2022-12-31 · accession 0000350698-24-000021 (CommercialPaper)
  15. 10-K · period ending 2023-12-31 · accession 0000350698-25-000029 (CommercialPaper)
  16. 10-K · period ending 2024-12-31 · accession 0001628280-26-007800 (CommercialPaper)
  17. 10-K · period ending 2021-12-31 · accession 0000350698-23-000026 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-31 · accession 0000350698-24-000021 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0000350698-25-000029 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-31 · accession 0001628280-26-007800 (CashAndCashEquivalentsAtCarryingValue)