 AutoNation’s value lies in its high-margin service and finance divisions, a fundamental strength that suggests its current stock price is... ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ |
| | Written by Jeffrey Neal Johnson 
AutoNation’s (NYSE: AN) stock recently touched a new 52-week high, a milestone that often signals a company’s value is fully recognized by the market. For many investors, a peak price might suggest the opportunity has passed. However, a closer examination of the company's financial health and strategic operations reveals a different and more compelling picture. Key financial metrics suggest that AutoNation remains fundamentally undervalued, particularly given its operational strength. AutoNation’s financial performance is driven by more than just selling cars; the company also has a resilient and evolving business model focused on stable, high-profit segments that the market seems to be overlooking. Is AutoNation Undervalued? The core of the value argument for AutoNation rests on its key financial metrics. These numbers suggest a significant discount compared to the broader market and even within its sector, providing a quantitative snapshot of a company whose market price may not yet reflect its operational success. - Price-to-Earnings Ratio (P/E): AutoNation trades at a trailing price-to-earnings ratio (P/E) of approximately 11.89. This means investors are paying just under $12 for every dollar of the company's annual profit. This figure is considerably lower than the average for the S&P 500. It is also about half of what you would expect from a similar company within the consumer cyclical sector, indicating that the stock is not carrying the high premium seen in many other large companies.
- Price-to-Sales Ratio (P/S): Even more telling is the company’s price-to-sales ratio (P/S), which stands at a low 0.28. This metric compares the company’s total market value to its annual revenue. A figure below 1.0 is often considered a sign of undervaluation, and AutoNation’s ratio suggests its market capitalization is just a small fraction of the massive revenue it generates each year. This can indicate that the market is overly focused on profit margins and is discounting the sheer scale of the business.
This perspective is also shared by Wall Street analysts who see further room for growth. The consensus rating from nine analysts covering AutoNation’s stock is a Moderate Buy. More pointedly, Bank of America (NYSE: BAC) recently raised its price target for AutoNation to $255, suggesting a meaningful potential upside from its current trading level and reinforcing the idea that the professional analyst community sees value beyond the current price. The Engines Driving AutoNation's Future AutoNation’s value is built on a deliberate strategy that extends far beyond the vehicle showroom. The company is successfully creating a diversified and profitable business designed to thrive in all economic conditions by growing its high-margin operations and using the resulting cash flow to reward shareholders directly. While new car sales face margin pressure across the industry, AutoNation is strengthening its core by focusing on areas with more control and higher profitability. The most stable part of the business is what happens after the sale. In the first quarter of 2025, the After-Sales division (which includes parts, service, and collision repairs) delivered a record $568 million in gross profit. This segment is the company's anchor, providing a consistent, high-margin revenue stream that is less sensitive to economic cycles than vehicle sales. For investors, this creates a predictable earnings base that can smooth out the volatility often associated with retail. At the same time, the company is rapidly growing its own finance company, AutoNation Finance (ANF). By providing loans directly to customers, AutoNation captures a greater share of the profit from each transaction, a key industry metric known as profit per unit. ANF reached a significant milestone in May 2025 when it completed its first-ever $700 million asset-backed securitization. This transaction, where auto loans are bundled and sold to large investors, does two critical things: it turns future payments into immediate cash for the company and, more importantly, it serves as a powerful validation of ANF’s loan quality to the broader financial market. This success establishes a scalable, low-cost way to fund future growth. A company’s actions with its cash often speak louder than words. AutoNation’s management is demonstrating firm conviction in the stock's value through its disciplined capital allocation strategy. Fueled by the strong cash flow from its operations, the company repurchased $225 million of its stock in the first quarter alone. These buybacks reduce the number of shares on the market, directly increasing earnings per share (EPS) and signaling that leadership believes the stock is a sound investment at current prices. With over $600 million still available under its repurchase authorization, this trend is likely to continue. This capital return is complemented by strategic growth, such as the $70 million acquisition of two dealerships in Colorado, which adds revenue and expands the company’s footprint in a targeted, synergistic manner. This strategy also directly addresses market challenges. While the industry faces moderating profits on new vehicles, AutoNation has shown a keen focus on profitability in the used car segment. Though its same-store used vehicle sales volume dipped by a slight 2% in the first quarter, its gross profit per used vehicle jumped by an impressive 13.1%. This demonstrates a clear and successful strategy of prioritizing high-quality, profitable sales over simply chasing volume, which for investors should be seen as a sign of a mature and disciplined management team. A Value Investment Hiding in Plain Sight AutoNation offers a compelling narrative for value-oriented investors. The company is much more than a simple car retailer; it is a complex operation focused on generating stable profits from a diverse and growing business model. For those willing to look beyond the headline stock price, the combination of a low valuation, a robust and profitable business strategy in service and finance, and a management team demonstrating its confidence through shareholder-friendly actions presents a clear and persuasive investment case.  Read This Story Online | What does your trading day look like?
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| Written by Gabriel Osorio-Mazilli 
Even though shares of Snowflake Inc. (NYSE: SNOW) now trade at a new 52-week high, some market participants have recently come in to suggest that even higher prices are to be expected in this stock moving forward. As investors will discover, a very contrarian signal is currently unfolding in Snowflake stock, signaling a potential new rally in the coming months. All factors aside, Snowflake is one of the stocks enjoying a bullish ride in the technology sector, and that makes it a prime candidate for further momentum to come its way. The main fundamental reason is that Snowflake’s business lies outside of the current economic and geopolitical conflicts around the world, so there is no reason for investors to be too concerned about a potential decline in the stock price anytime soon. Of course, there are also some attractive factors to consider regarding the company’s key performance indicators (KPIs), as they demonstrate how closely this company is tied to the digitalization of the global economy, starting with the United States. As a technology stock, Snowflake has justified the attention of options traders and other participants alike; here’s why. Traders Hit Buy on Snowflake Stock’s Options As of late June 2025, Snowflake reported that up to 86,533 call options had been recently purchased, a significant increase from the typical volume of 57,241 by comparison. While this is surely a bullish indicator for better price action to come down the line, here is something investors need to understand about options. First, Options are not like buying shares of stock outright since these contracts involve leverage, which drives the stakes much higher for those who buy them. Second, these instruments come with an expiration date, meaning that traders now have to race against the clock to receive a payout from their investment or risk a total loss. With this amount of downside right out of the gate, investors can somewhat assume that these traders must have a higher level of conviction going into this view on Snowflake stock and its future. That is why they should watch it today as a potential runner in the coming months. As it turns out, these weren’t the only market participants who thought Snowflake stock should be trading higher than it is today. More Optimism Brews for Snowflake Stock Around the same time that this unusual call option position was reported, Sanjit Singh from Morgan Stanley initiated coverage of Snowflake stock, assigning an Overweight rating to the company. Not only that, but he also thinks that the stock’s fair value looks more like $262 per share. From its current trading position, this call suggests that Snowflake stock is poised not only to reach a new 52-week high but also to deliver an additional upside of 18% for investors to consider when making their potential buying decisions. While all this sounds bullish enough, there’s still a justification to be had if Snowflake is to deliver on this promise. According to the most recent quarterly earnings report, Snowflake reported annual revenue growth of up to 26%, reaching a high of $996.8 million for that period. What’s more significant than just this revenue growth is the source of the revenue itself, which primarily comes in the form of subscriptions. Given the current volatility and uncertainty in the economic and market environment, it isn’t too far-fetched to imagine that more investors will seek the fundamental safety and stability that a subscription-based business can offer them. This may be the reason why markets are willing to pay so much for the stock today. Because Snowflake now trades at a 30.7x price-to-book (P/B) ratio, it commands a significant premium over the rest of the computer sector, which has an average P/B valuation of 7.0x today. Premium multiples are typically tied to stocks with favorable momentum behind them and are expected to continue outperforming soon. Knowing this market dynamic, these options traders may be betting on the fact that more momentum is on its way, not to mention new buyers emerging from the institutional side of the market. In fact, up to $2.4 billion worth of institutional buying took place in the most recent quarter, in addition to the $6.2 billion that came in from the previous quarter. All of this buying may be a signal that the so-called “smart money” is already rotating into the perceived safety that this business model can provide during an uncertain time, such as today’s market. Overpaying for a stock at its highs, with leveraged options contracts with a ticking clock, may be one of the best indicators investors will find today for Snowflake stock. Read This Story Online | What if you could eliminate all the uncertainty from your trading?
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| Written by Chris Markoch 
With the notable exceptions of Novo Nordisk A/S (NYSE: NVO) and Eli Lilly & Co. (NYSE: LLY), biotechnology stocks had a rough time attracting investment capital in 2024. Small- and mid-cap biotech stocks struggled to raise capital in a higher-for-longer interest rate environment. Even large-cap drug companies were impacted as the U.S. Food & Drug Administration (FDA) took a more measured approach to drug approvals, including in breakthrough areas such as gene therapy. The sector is also starting to digest the impact of the Inflation Reduction Act on drug pricing provisions. GLP-1 drugs have been the exception. But investors who missed the strong growth of NVO and LLY are starting to look at new opportunities in 2025. The macroeconomic driver is likely to come from lower interest rates, making raising capital easier. The biotech industry is using tools such as artificial intelligence (AI) to deliver efficiencies for shareholders. Companies are increasingly using AI and machine learning to hasten drug development, opening new possibilities in areas like precision medicine. Biotechnology stocks are always a study in risk-reward. But if you have an appetite for some risk, here are three names that could shoot higher based on clinical trial results. Iovance Builds on TIL Therapy Breakthrough With New Trials Iovance Biotherapeutics Inc. (NASDAQ: IOVA) received FDA approval for Amtagvi, its tumor-infiltrating lymphocyte (TIL) therapy for solid tumors. This is the first FDA-approved TIL therapy, and it’s moved the company beyond the clinical stage to a solid revenue producer. Those revenue gains, however, are not reflected in IOVA stock, which remains a penny stock and is down 75.8% in 2025. Slower-than-expected sales of Amtagvi are raising concerns over cash burn. As of March 2025, the company had $422 million in cash, which it says will be sufficient into the second half of 2026. That’s based on its anticipated full-year cash burn of $300 million. Despite the FDA's approval of Amtagvi, another reason IOVA stock has declined in 2025 is a gap in near-term clinical catalysts. The company has other therapies in clinical trials, but there are concerns that TIL therapy may be overshadowed by CAR-T and PD-1 therapies. All of that means the risk premium on IOVA stock is likely to remain in place. However, Iovance may have asymmetric upside. Analysts give the stock a consensus price target of $12.22. That’s a 588% gain. Plus, that’s the opinion of 12 analysts, which is rare for a stock of this size. Neurocrine Biosciences Could See Revenue Increase by Over 30% Investors wanting biotech options with less risk may want to consider Neurocrine Biosciences Inc. (NASDAQ: NBIX). The company is already profitable from its flagship Ingrezza therapy, projecting revenue between $2.5 billion and $2.6 billion in 2025. Neurocrine also received approval for Crenessity for congenital adrenal hyperplasia (CAH) in late 2024. This could give the company a significant revenue boost. Many analysts believe that peak U.S. sales for Crenessity could reach $800 million to $1 billion. The risk is that Ingrezza will not meet its current revenue targets, which are already lower than analysts expected. The company also faces a difficult regulatory landscape after the passage of the Inflation Reduction Act. Crenessity also faces a complex reimbursement outlook. But the larger issue, for now, may be the drug's black box warning. This means it will require careful supervision, which may limit its initial market. Still, this is about managing risk and reward. A total of 22 analysts give NBIX stock a consensus price target of $162 which is a 27% increase. NBIX is also showing healthy growth with an increase of over 9% in its stock price since April 2025. Viking Sets Sights on Obesity Market With GLP-1 Rival Viking Therapeutics Inc. (NASDAQ: VKTX) stock is down 33% as investors wait for Phase 2 results for its GLP-1 candidate (VK2735). The company has also completed Phase 2 enrollment for an oral version of VK2735. Investor interest is high based on the success of the current GLP-1 drugs. However, the stock faces pressure on two fronts. The first comes from short sellers. Short interest of 26.71 million shares, representing 25.15% of the float. In the absence of a catalyst, the company’s growth is limited. The second battle is with Eli Lilly, which is also in the race for an oral GLP-1 candidate. Lilly is expected to get their candidate on the market first. However, Viking has teased that VK2735 may offer up to 78 weeks of durable weight loss, giving it a potential competitive edge. That would match or exceed the performance of Wegovy or Zepbound. These claims reference benchmark durations seen in rival trials, not current VKTX data. Read This Story Online | |
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