NYSE:ABG
ASBURY AUTOMOTIVE GROUP INC
A robust North American automotive parts manufacturer delivering essential components and services with resilient operating cash flow growth.
Key Metrics
Investment Thesis
Bull Case
Investors may find value in ABG's ability to generate consistent operating cash flow ($775.2M) that significantly exceeds net income, indicating high quality earnings and conservative accounting practices. The strategic acquisition strategy has successfully diversified the revenue base, reducing reliance on any single product line or customer segment while driving long-term organic growth.
Bear Case
The company faces concerns over its leverage profile, with current liabilities of $3.56B exceeding current assets, suggesting potential liquidity pressure if cash conversion slows. The massive divestiture activity of $566.5M and heavy investing cash outflows could signal strategic restructuring or a lack of profitable organic investment opportunities in the near term.
About ASBURY AUTOMOTIVE GROUP INC
ASBURY AUTOMOTIVE GROUP INC (ABG) is a premier automotive solutions provider serving the North American market with specialized parts, manufacturing services, and aftermarket components. The company leverages a diverse portfolio to support OEMs and independent repair shops across various vehicle segments. With strong operational cash flows and significant recent acquisitions, ABG continues to expand its footprint in the competitive automotive supply chain.
Analysis
Management Discussion
Despite a slight contraction in net income from $430.3M in 2024 to $492.0M in 2025, revenue expanded robustly to $18.00B, driven by successful acquisitions totaling $1.76B and effective cost management. Operating profit reached $860.6M, reflecting strong operational efficiency, though the company navigated challenges including inventory adjustments of -$72.7M and significant investing outflows of -$1.46B related to M&A activity.
Industry Overview
The automotive parts industry is highly fragmented but trending toward consolidation, favoring companies with scale and supply chain resilience. Demand remains sensitive to vehicle sales cycles and fleet renewal rates, creating a cyclical environment where established players like ABG benefit from customer loyalty and inventory depth.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $15.43B | $14.80B | $17.19B | $18.00B |
| Cost of Revenue | $12.33B | $12.05B | $14.24B | $14.93B |
| Gross Profit | $3.10B | $2.76B | $2.95B | $3.07B |
| Operating Expenses | $1.83B | $1.80B | $2.11B | $2.21B |
| Operating Income | $1.27B | $953.5M | $835.6M | $860.6M |
| G&A | $1.76B | $1.62B | $1.89B | $1.99B |
| Stock-Based Comp | $20.6M | $23.5M | $26.7M | $27.7M |
| D&A | $69.0M | $67.7M | $75.0M | $82.4M |
| Other OpEx | $64.6M | $184.9M | $224.5M | $223.5M |
| Non-Operating Income | $46.5M | $-152.2M | $-260.3M | $-198.4M |
| Interest Expense | $160.6M | $165.7M | — | — |
| Pre-Tax Income | $1.32B | $801.3M | $575.3M | $662.2M |
| Income Tax | $321.8M | $198.8M | $145.0M | $170.2M |
| Continuing Ops | $997.3M | $602.5M | $430.3M | $492.0M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $997.3M | $602.5M | $430.3M | $492.0M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $997.3M | $602.5M | $430.3M | $492.0M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $1.91B | $3.06B | $3.14B | $3.38B |
| Marketable Securities | $5.4M | $6.2M | $14.4M | $500.0K |
| Inventory | $959.2M | $1.77B | $1.98B | $2.14B |
| Other Current Assets | $945.2M | $1.28B | $1.14B | $1.24B |
| Long-Term Assets | $6.11B | $7.10B | $7.20B | $8.24B |
| PP&E (Net) | $1.94B | $2.32B | $2.55B | $3.07B |
| Goodwill | $1.78B | $2.01B | $2.04B | $2.28B |
| Operating Leases | $235.4M | $241.8M | $220.1M | $240.6M |
| Other LT Assets | $2.15B | $2.54B | $2.38B | $2.65B |
| Total Assets | $8.02B | $10.16B | $10.34B | $11.62B |
| Current Liabilities | $1.03B | $2.88B | $2.84B | $3.56B |
| Accounts Payable | $147.4M | $155.6M | $169.1M | $152.3M |
| Current Leases | $23.6M | $26.2M | $28.1M | $27.6M |
| Deferred Revenue | $218.9M | $228.6M | $235.5M | $243.6M |
| Other Current Liab | $636.5M | $2.46B | $2.40B | $3.13B |
| Long-Term Liabilities | $4.08B | $4.04B | $4.00B | $4.17B |
| LT Operating Leases | $218.4M | $222.1M | $200.0M | $221.6M |
| Other LT Liab | $3.37B | $3.31B | $3.27B | $3.36B |
| Total Liabilities | $5.12B | $6.92B | $6.83B | $7.73B |
| Shareholders' Equity | $2.90B | $3.24B | $3.50B | $3.89B |
| Retained Earnings | $2.61B | $2.96B | $3.22B | $3.62B |
| AOCI | $74.4M | $61.1M | $56.8M | $40.6M |
| Treasury Stock | $1.06B | — | — | — |
| Total L&E | $8.02B | $10.16B | $10.34B | $11.62B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $997.3M | $602.5M | $430.3M | $492.0M |
| Non-Cash Adjustments | $-507.1M | $-1.11B | $-81.1M | $334.5M |
| Working Capital Changes | $205.8M | $820.3M | $322.0M | $-51.3M |
| Cash from Operations | $696.0M | $313.0M | $671.2M | $775.2M |
| Cash from Investing | $464.7M | $-1.68B | $-137.2M | $-1.46B |
| Debt Issuances | $0 | $0 | — | $546.5M |
| Share Buybacks | $9.2M | $11.4M | $10.2M | $12.8M |
| Cash from Financing | $-1.10B | $1.18B | $-510.3M | $653.1M |
| FX Effect | $0 | $0 | $0 | $-100.0K |
| Net Change in Cash | $56.4M | $-189.6M | $23.7M | $-29.0M |
| Beginning Cash | $178.9M | $235.3M | $45.7M | $69.4M |
| Ending Cash | $235.3M | $45.7M | $69.4M | $40.4M |
Frequently Asked Questions
How does ASBURY AUTOMOTIVE GROUP INC make money?
The company's revenue is driven by aftermarket parts distribution, original equipment manufacturing (OEM) supply contracts, and specialized repair services for light and heavy-duty vehicles. Key streams include high-margin proprietary component production alongside diversified sourcing of third-party parts to meet fluctuating market demands.
What are the main risks for ABG?
Significant exposure to automotive industry cyclicality and potential demand slowdowns affecting parts sales volumes. Rising raw material costs and supply chain disruptions could compress gross margins despite revenue growth. Heavy debt load relative to equity, evidenced by substantial current liabilities, poses refinancing risks in a tightening credit environment.
What is ABG's competitive advantage?
ABG maintains a deep network of strategic relationships with top-tier OEMs and independent dealerships, ensuring consistent order flow and pricing power. The firm's vertically integrated supply chain allows for rapid response to market volatility, while its extensive proprietary product lines create high barriers to entry for competitors.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.