Sonic Automotive Inc. (NYSE: SAH)

by | Jul 25, 2025 | Daily Trade Alerts

Sonic Automotive Inc. (NYSE: SAH) – Driving Returns with Scale and Strategy

Sonic Automotive Inc. (NYSE: SAH) is one of the largest automotive retailers in the U.S., operating a network of over 100 franchised dealerships and nearly 40 EchoPark used vehicle stores. With a blend of traditional and tech-enabled car sales, SAH is executing a strategy focused on margin expansion, capital returns, and selective M&A.

In an industry that’s seen turbulence from interest rates, supply chain woes, and fluctuating demand, Sonic has quietly outperformed peers by staying nimble and disciplined with costs.

The Bigger Picture: Sonic’s Business Segments

SAH operates across:

  • Franchised Dealerships – New and used vehicle sales for brands like BMW, Honda, Ford, and Toyota.
  • EchoPark – Its standalone used-vehicle brand, focused on non-luxury, near-new cars with national scaling potential.
  • F&I and Service – High-margin segments providing steady, recession-resistant cash flow.

With resilient service revenue and EchoPark’s digital-first model, Sonic is diversifying its revenue base while expanding customer reach.

Key Catalysts Driving SAH’s Momentum

  1. EchoPark Turnaround: The segment posted positive adjusted EBITDA in Q1 2025 for the first time since its expansion push—signaling inflection.
  2. Capital Returns: SAH repurchased over $60M in stock YTD and recently boosted its buyback authorization.
  3. Cost Controls: SG&A expenses down 11% YoY; driving higher operating leverage even with softer volumes.
  4. M&A Activity: Recent dealership acquisitions in Texas and the Southeast are expected to be accretive within 12 months.
  5. Used Car Strength: Gross profit per unit on used vehicles rose 8% YoY, even as new car margins normalized.

Technical Analysis: SAH Breaking Out from Base

  • Moving Averages: Trading above both 50- and 200-day moving averages; bullish crossover occurred mid-June.
  • MACD: Positive MACD crossover with increasing histogram strength.
  • RSI: RSI at 64—momentum is strong but not overbought.
  • Chart Pattern: Flat base between $50–$55 for several weeks; breakout above $56 could target $62–65 short term.
  • Volume Trends: Strong institutional buying evident post-Q1 earnings.

Potential Risks to Consider

  • Interest Rate Sensitivity: Higher financing costs could deter both new and used car buyers.
  • Inventory Cycles: Dealer inventories are improving, but chip-related delays or OEM price shifts remain a wildcard.
  • EchoPark Execution: Expansion requires balancing scale with profitability—especially in a competitive used-car landscape.


Sonic Automotive is combining dealership scale with disciplined execution to deliver strong returns—even in a complex macro environment. With improving margins and bullish technicals, SAH could be one of the best-kept secrets in the automotive space heading into late 2025.

[sponsor]

Sponsored Content