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AN, AutoNation

AutoNation, Inc., through its subsidiaries, is one of the largest automotive retailers in the United States.

As of December 31, 2025, we owned and operated 323 new vehicle franchises from 245 stores located in the United States, predominantly in major metropolitan markets in the Sunbelt region.

The core brands of new vehicles that we sell, representing approximately 89% of the new vehicles that we sold in 2025, are manufactured by Toyota (including Lexus), Honda, Ford, General Motors, BMW, Mercedes-Benz, Stellantis, and Volkswagen (including Audi and Porsche).

Latest annual: FY2025 10-K

AN · AutoNation

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$27.6B

+3.2% YoY · 6% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $27.5B 5-yr avg $26.8B

Gross margin 18% 5-yr avg 19%

Operating margin 4.4% 5-yr avg 6.1%

ROIC 15% 5-yr avg 23%

Owner-earnings margin 0% 5-yr avg 3%

Free cash flow margin −0% 5-yr avg 2%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is led by AN Reportable Segment, Premium Luxury (37%) and AN Reportable Segment, Import (30%), with 2 more segments behind.
What moves the needle: Gross margin has run about 17% and operating margin about 4.1% through the cycle, a thin spread that turns the result on volume and the cost of what it sells far more than on the price it sets. On a spread this thin the operating result swings hard on small moves in cost or volume — it has ranged from 2.8% to 7.5% over the years, so the cost line is where the needle moves. Inventory runs near 13% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run in the teens (median 14%, above 15% in 5 of 10 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. Owner earnings, the cash-based check, have been thin too. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 4 segments, the largest AN Reportable Segment, Premium Luxury at 37%.

Revenue by reportable segment, FY2025

AN Reportable Segment, Premium Luxury37%$10.3B
AN Reportable Segment, Import30%$8.4B
AN Reportable Segment, Domestic27%$7.5B
Corporate Segment and Other Operating5%$1.4B

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$21.6B	$21.5B	$21.4B	$21.3B	$20.4B	$25.8B	$27.0B	$26.9B	$26.8B	$27.6B	$27.5B	RevenueRevenue
15%	16%	16%	17%	17%	19%	20%	19%	18%	18%	18%	Gross marginGross mgn
11%	11%	12%	12%	12%	11%	11%	12%	12%	12%	12%	SG&A / revenueSG&A/rev
$890M	$843M	$778M	$824M	$563M	$1.9B	$2.0B	$1.7B	$1.3B	$1.2B	$1.2B	Operating incomeOp. inc.
4.1%	3.9%	3.6%	3.9%	2.8%	7.4%	7.5%	6.1%	4.9%	4.5%	4.4%	Operating marginOp. mgn
$431M	$435M	$396M	$450M	$382M	$1.4B	$1.4B	$1.0B	$692M	$649M	$679M	Net incomeNet inc.
39%	32%	25%	26%	31%	24%	25%	24%	24%	27%	27%	Effective tax rateTax rate
											Cash flow & returns
$516M	$540M	$511M	$769M	$1.2B	$1.6B	$1.7B	$724M	$315M	$112M	$187M	Operating cash flowOp. cash
$60M	$85M	$90M	$288M	$796M	$220M	$259M	($337M)	($414M)	($584M)	($623M)	Working capital & otherWC & other
$245M	$313M	$401M	$269M	$156M	$216M	$329M	$410M	$329M	$309M	$291M	CapexCapex
1.1%	1.5%	1.9%	1.3%	0.8%	0.8%	1.2%	1.5%	1.2%	1.1%	1.1%	Capex / revenueCapex/rev
$451M	$475M	$446M	$705M	$1.1B	$1.5B	$1.6B	$642M	$234M	$28M	$103M	Owner earningsOwner earn.
2.1%	2.2%	2.1%	3.3%	5.6%	6.0%	5.9%	2.4%	0.9%	0.1%	0.4%	Owner earnings marginOE mgn
$272M	$227M	$110M	$500M	$1.1B	$1.4B	$1.3B	$314M	($14M)	($198M)	($104M)	Free cash flowFCF
1.3%	1.1%	0.5%	2.3%	5.2%	5.5%	5.0%	1.2%	−0.1%	−0.7%	−0.4%	Free cash flow marginFCF mgn
$410M	$77M	$67M	$5M	$400K	$433M	$192M	$271M	$0	$459M	$390M	AcquisitionsAcquis.
$497M	$435M	$100M	$45M	$367M	$2.3B	$1.7B	$874M	$460M	$792M	—	BuybacksBuybacks
14%	12%	13%	12%	8%	28%	27%	24%	20%	15%	15%	ROICROIC
19%	18%	15%	14%	12%	58%	67%	46%	28%	28%	30%	Return on equityROE
19%	18%	15%	14%	12%	58%	67%	46%	28%	28%	30%	Retained to equityRetained/eq
											Balance sheet
$65M	$69M	$49M	$42M	$570M	$60M	$73M	$61M	$60M	$59M	$66M	Cash & investmentsCash+inv
$1.0B	$1.1B	$707M	$662M	$595M	$540M	$635M	$762M	$774M	$693M	$600M	ReceivablesReceiv.
$3.5B	$3.4B	$3.7B	$3.3B	$2.6B	$1.8B	$2.0B	$3.0B	$3.4B	$3.4B	$3.4B	InventoryInvent.
$304M	$310M	$306M	$290M	$335M	$396M	$328M	$345M	$377M	$370M	$377M	Accounts payablePayables
$4.2B	$4.2B	$4.1B	$3.7B	$2.9B	$2.0B	$2.4B	$3.5B	$3.8B	$3.7B	$3.7B	Operating working capitalOper. WC
$4.7B	$4.8B	$4.9B	$4.4B	$4.2B	$2.8B	$3.1B	$4.3B	$4.7B	$4.6B	$4.6B	Current assetsCur. assets
$5.8B	$5.6B	$5.7B	$5.1B	$4.2B	$3.1B	$3.4B	$5.6B	$6.3B	$5.5B	$5.6B	Current liabilitiesCur. liab.
0.8×	0.9×	0.9×	0.9×	1.0×	0.9×	0.9×	0.8×	0.7×	0.8×	0.8×	Current ratioCurr. ratio
$1.5B	$1.5B	$1.5B	$1.5B	$1.2B	$1.2B	$1.3B	$1.5B	$1.5B	$1.4B	$1.4B	GoodwillGoodwill
$10.1B	$10.3B	$10.7B	$10.5B	$9.9B	$8.9B	$10.1B	$12.0B	$13.0B	$14.4B	$14.6B	Total assetsAssets
$1.8B	$2.4B	$2.0B	$1.9B	$2.1B	$2.9B	$3.6B	$3.1B	$2.6B	$3.7B	$3.7B	Total debtDebt
$1.7B	$2.3B	$1.9B	$1.9B	$1.5B	$2.8B	$3.5B	$3.1B	$2.6B	$3.6B	$3.6B	Net debt / (cash)Net debt
$2.3B	$2.4B	$2.7B	$3.2B	$3.2B	$2.4B	$2.0B	$2.2B	$2.5B	$2.3B	$2.2B	Shareholders’ equityEquity
0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.1%	0.2%	0.2%	Stock comp / revenueSBC/rev
—	—	—	—	$318M	—	—	—	—	$65M	$65M	Goodwill written downGW imp.
											Per share
104M	98.2M	91.3M	90.5M	88.7M	75.0M	56.7M	44.9M	40.9M	38.1M	35.1M	Shares out (diluted)Shares
$208.18	$219.29	$234.53	$235.75	$229.88	$344.59	$475.93	$600.20	$654.41	$725.23	$783.28	Revenue / shareRev/sh
$4.15	$4.43	$4.34	$4.97	$4.30	$18.31	$24.29	$22.74	$16.92	$17.04	$19.34	EPS (diluted)EPS
$4.34	$4.84	$4.89	$7.79	$12.92	$20.66	$27.98	$14.31	$5.71	$0.74	$2.93	Owner earnings / shareOE/sh
$2.62	$2.31	$1.21	$5.52	$11.86	$18.83	$23.62	$6.99	$-0.34	$-5.18	$-2.96	Free cash flow / shareFCF/sh
$2.36	$3.19	$4.39	$2.98	$1.76	$2.88	$5.80	$9.14	$8.03	$8.12	$8.28	Cap. spending / shareCapex/sh
$22.26	$24.13	$29.75	$34.94	$36.48	$31.69	$36.12	$49.25	$60.08	$61.45	$63.44	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+14.9%/yr	+25.8%/yr
Owner earnings / share	−17.8%/yr	−43.6%/yr
EPS	+17.0%/yr	+31.7%/yr
Capital spending / share	+14.7%/yr	+35.8%/yr
Book value / share	+11.9%/yr	+11.0%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

38Mpeak FY2016

ROIC

15%low FY2020

Gross margin

18%low FY2016

Net debt ÷ owner earnings

129.3×peak FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$28Mowner earningsvs.$649Mnet incomelow FY2025

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $28M of owner earnings, the operating cash left after the $84M it takes just to hold its position. It put $226M more into growth; free cash flow, after that spending, was ($198M).

Reported net income$649M

Owner earnings$28M · 0% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$649M	$692M	$1.0B	$1.4B	$1.4B
Stock-based compensationreal costnon-cash, but a real cost	+$47M	+$37M	+$40M	+$32M	+$35M
Working capital & othertiming of cash in and out, other non-cash items	−$584M	−$414M	−$337M	+$259M	+$220M
Cash from operations	$112M	$315M	$724M	$1.7B	$1.6B
Maintenance capital expenditurethe spending needed just to hold position and volume	−$84M	−$81M	−$82M	−$82M	−$78M
Owner earnings	$28M	$234M	$642M	$1.6B	$1.5B
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$226M	−$247M	−$329M	−$247M	−$137M
Free cash flow	($198M)	($14M)	$314M	$1.3B	$1.4B
Owner-earnings marginowner earnings ÷ revenue	0%	1%	2%	6%	6%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $84M, roughly its depreciation, the rate its assets wear out). The other $226M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $47M), owner earnings is nearer ($18M).

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

Interest expense not tagged in the data

What this means
No usable interest-expense line was tagged in the filing data, but the balance sheet carries real net debt — so the interest burden here is unknown, not absent. Read the debt on the net-debt check below.
How heavy is the debt, net of cash? $3.6B · 2.9× operating profit

Meaningful net debt

Cash $59M − debt $3.7B

What this means
Netting $59M of cash and short-term investments against $3.7B of debt leaves $3.6B owed, about 2.9× a year's operating profit (3.0× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 58d

Tight

DSO 9 + DIO 55 − DPO 6 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 14%

Solid through the cycle

10-yr median, range 8%–28%; 15% latest = NOPAT $910M ÷ invested capital $6.0B

Industry peers: median 13%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 15% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 2%

Thin through the cycle

10-yr median margin, range 0%–6%; latest $28M = operating cash $112M − maintenance capex $84M

Industry peers: median 3%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 0% of revenue this year, a 2% median across 10 years. Treating stock comp as the real expense it is (less $47M of SBC) leaves ($18M).
Are earnings backed by cash? 0.17×

Thinly cash-backed

Cash from ops $112M ÷ net income $649M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 2807%

Returned more than it generated

Dividends + buybacks $792M ÷ Owner Earnings $28M

What this means
The company returned more than it generated: against $28M of Owner Earnings, $792M (2807%) went back to shareholders, $0 dividends, $792M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $47M stock comp, the real buyback was about $745M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 3.70×

Expanding

Capex $309M ÷ depreciation $84M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $27.6B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.84×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $3.7B vs ($893M) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +87%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $23.53/share (latest year $19.40), the averaged base the calculator's gate runs on, and book value is $69.96/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 5 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 4% → 5% (3-yr avg ends)

In the filing’s words The filing attributes gains to higher prices, but the margin in the record has not followed — the claim outruns the result here.

What this means
Through the cycle the operating margin widened — about 4% early to 5% lately, median 4% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth −13%/yr

What this means
Owner earnings shrank about 13% a year over the record.
Worst year 2020 · 2.8% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing Raised, but not as a competitor

The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product.

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$4.6B

Cash & short-term investments$66M
Receivables$600M
Inventory$3.4B
Other current assets$470M

Current liabilities$5.6B

Debt due within a year$8M
Accounts payable$377M
Other current liabilities$5.2B

Current ratio0.81×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.20×stricter: inventory excluded

Cash ratio0.01×strictest: cash alone against what's due

Working capital($1.0B)the cushion left after near-term bills

Debt due this year vs. cash$8M due · $66M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Revenue, latest quarter vs. a year ago−2.1%the freshest read on whether the business is still growing

Current ratio, recent quarters0.8× → 0.8×

Deeper floors

Tangible book value($209M)equity stripped of goodwill & intangibles

Debt incl. operating leases$2.0B$463M of it operating leases; with finance leases, “total fixed claims” below reaches $4.6B (annual-report basis)

Deferred revenue$119Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$75M

'27$320M

'28$420M

'29$618M

'30$518M

later$1.9B

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$75Mthe first rung: what must be repaid or rolled over within the year

Within two years$394Mthe near wall, the part most exposed to today’s credit conditions

Biggest single year$618Min 2029the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$3.8Bevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$66M

One year of owner earnings (FY2025)$28M

Together, against $75M due next year1.3×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $94M against the $75M due in the twelve months after the Dec 31, 2025 schedule: 1.3 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the balance-sheet debt.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$188M

'27$97M

'28$92M

'29$88M

'30$78M

later$620M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$188Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$1.2Bevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$867Mthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$3.7B

Lease obligations (present value)$867M

Total fixed claims on the business$4.6B

Counting the leases the way Buffett does, the fixed claims on this business come to $4.6B, of which the leases are 19%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Dec 31, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2016–2025

Over the record, the business generated $8.0B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$3.0B · 37%
Buybacks$7.6B · 95%

Returned to owners$7.6B
104% of the owner earnings the business produced over the span, $0 as dividends and $7.6B as buybacks.
Source of funding−$2.6B
Reinvestment and shareholder returns ran $2.6B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $1.8B to $3.7B.
Average price paid for buybacks—
Buybacks ran $7.6B over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−66.2%
The diluted count fell from 104M to 35M, so the buybacks outran the stock issued to staff.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$2.4B17% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity60%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$1.9Bover 10 years buying other businesses, against $3.0B of capital spent building

$384M written down across 2 years (2020, 2025): goodwill the company has already conceded it overpaid for, charged against earnings. That is roughly 20% of the cash it put into acquisitions over the span. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Michael Jackson	$18.3M	$42.2M	$1.5B
2021	Michael Manley	$8.5M	$8.2M	$1.5B
2022	Michael Manley	$13.5M	$12.7M	$1.6B
2023	Michael Manley	$13.6M	$20.3M	$642M
2024	Michael Manley	$15.9M	$22.6M	$234M
2025	Michael Manley	$34.4M	$48.8M	$28M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership1.4%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$47M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why AutoNation is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

3 of the 6 tests turned up something to look into; the other 3 came back clean.

Look hereIs it less profitable than it was?1.1% vs 2.1%
The owner-earnings margin averaged 2.1% early in the record and 1.1% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid debt outgrow the business?$1.8B → $3.7B
Debt rose from $1.8B to $3.7B while owner earnings went from about $457M to $301M — about 3.9 years of owner earnings in debt then, about 12 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereAre "one-time" charges a yearly habit?10 of 10 years
Management took an impairment or write-down in 10 of the last 10 years, $501M in all. A charge taken almost every year is not one-time; it is the business — past deals coming due, and an admission the assets were worth less than what was paid. Munger's rule: when the "one-time" keeps happening, it is the business. Read it beside the goodwill the company still carries.

And these came back clean

Did the share count rise anyway?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Auto Dealers & Services

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
LADLithia Motors	$37.6B	15%	4.3%	12%	1%
PAGPenske Automotive	$31.8B	16%	3.7%	13%	3%
ANAutoNation	$27.6B	18%	4.3%	14%	2%
KMXCarMax	$25.9B	12%	5.3%	4%	0%
GPIGroup 1 Automotive	$22.6B	16%	3.9%	13%	3%
CVNACarvana	$20.3B	14%	-0.7%	-3%	-17%
MUSAMurphy USA	$19.4B	90%	3.6%	20%	3%
ABGAsbury Automotive Group Inc	$18.0B	17%	4.8%	14%	4%
Group median	—	16%	4.1%	13%	2%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what AutoNation has delivered.

AutoNation’s latest year shows negative owner earnings, the mark of a build-out: total capital spending outruns the cash the business throws off today. So the tool opens on the steady-state base (maintenance capex in place of the build-out spend), the cash it would earn at rest; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, AutoNation earns about $634M on its 2.3% median owner-earnings margin. This year’s 0.1% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($634M) Net of stock comp (−$47M) Steady-state · maintenance capex ($103M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−46%/yr

Owner-earnings growth · ’16→’25−13%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow ($104M) on 33M shares outstanding, per the 10-Q cover, as of 2026-04-29; net debt $3.6B. The if-converted diluted count is 35M, 5% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base opens on the steady-state figure (the latest year is negative on total capex mid-build-out); clear Steady-state to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($291M) runs well above depreciation ($84M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $103M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh AN against another business →

The owners of AN: the meeting and the votes →

Cite: Owner Scorecard, "AutoNation (AN), the owner's record," https://ownerscorecard.com/c/AN, data as of 2026-07-09.

Manual order: ← AMZN its page in the Manual ANAB →

Industry order: ← ABG the Auto Dealers & Services chapter AZO →