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Why Sonic Automotive (SAH) is a Top Growth Stock for the Long-Term

Zacks Equity Research
·2 min read

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why This 1 Growth Stock Should Be On Your Watchlist

Different than value or momentum investors, growth-oriented investors are concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, they'll want to focus on the Growth Style Score, which analyzes characteristics like projected and historical earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

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Sonic Automotive (SAH)

Sonic Automotive is one of the leading automotive retailers in the United States. Apart from selling new and used cars and light trucks, the company offers warranties, service contracts, vehicle financing and insurance. Further, it provides maintenance and repair services, and sells replacement parts and aftermarket automotive products.

SAH is a Zacks Rank #3 (Hold) stock, with a Growth Style Score of A and VGM Score of A. Earnings are expected to grow 21.3% year-over-year for the current fiscal year, with sales growth of 32.1%.

Four analysts revised their earnings estimate higher in the last 60 days for fiscal 2022, while the Zacks Consensus Estimate has increased $0.22 to $10.26 per share. SAH also boasts an average earnings surprise of 26.6%.

Looking at cash flow, Sonic Automotive is expected to report cash flow growth of 78.7% this year; SAH has generated cash flow growth of 21.7% over the past three to five years.

SAH should be on investors' short lists because of its impressive growth fundamentals, a good Zacks Rank, and strong Growth and VGM Style Scores.


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