Penske Automotive Group’s third quarter results broadly matched Wall Street’s revenue expectations, with relative stability in U.S. auto retail operations balancing weakness in commercial truck and U.K. businesses. Management attributed U.S. strength to a 9% rise in same-store new vehicle sales and higher service revenue, while higher BEV (battery electric vehicle) penetration and the expiration of a federal tax credit weighed on profits. CEO Roger Penske explained that “seasonality was coupled with the expiration of EV tax credit in the U.S., which drove a higher penetration of BEV sales...reducing total new vehicle gross per unit by approximately $100.”
Is now the time to buy PAG? Find out in our full research report (it’s free for active Edge members).
Penske Automotive Group (PAG) Q4 CY2025 Highlights:
- Revenue: $7.77 billion vs analyst estimates of $7.60 billion (flat year on year, 2.2% beat)
- Adjusted EPS: $2.85 vs analyst expectations of $3.09 (7.9% miss)
- Adjusted EBITDA: $326 million vs analyst estimates of $347.1 million (4.2% margin, 6.1% miss)
- Operating Margin: 3.5%, in line with the same quarter last year
- Locations: 365 at quarter end, up from 353 in the same quarter last year
- Same-Store Sales fell 4% year on year (5% in the same quarter last year)
- Market Capitalization: $10.91 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Penske Automotive Group’s Q4 Earnings Call
- Michael Ward (Citigroup) asked about the rationale and scaling of Chinese auto brands at Sytner Select locations. Randall Seymore, President of International Operations, explained these brands would be launched at existing sites with minimal capital expenditure and highlighted initial success in the U.K. and Germany.
- Michael Ward (Citigroup) sought clarity on the impact of the "Big Beautiful Bill" tax provision on truck demand. CFO Michelle Hulgrave confirmed that accelerated depreciation will positively influence cash flow, primarily reflected in cash flow from operations in the second half of the year.
- Rajat Gupta (JPMorgan) inquired about visibility into a recovery for Premier Truck Group. Richard Shearing, Head of North American Operations, noted that regulatory changes could remove trucking capacity, eventually tightening the market and supporting a rebound in truck demand.
- Jeffrey Lick (Stephens) questioned trends in luxury vehicle sales and gross profit per unit. Shearing pointed to strong demand for Lexus and BMW, and described how shifts in BEV sales and inventory supply are affecting gross profit trends.
- David Whiston (Morningstar) asked about the drivers of higher used vehicle gross profit in Sytner Select. Tony Pordon, EVP of Investor Relations, and Seymore credited better inventory management, rapid reconditioning, and disciplined pricing for the improvement.
Catalysts in Upcoming Quarters
Heading into upcoming quarters, our team will monitor (1) the pace of recovery in the freight and commercial truck market, (2) the effectiveness of new Chinese brand integrations in Europe, and (3) trends in service and parts revenue as vehicle ages increase. Execution of cost management initiatives and expansion in energy solutions will also be key indicators of Penske Automotive Group’s strategic progress.
Penske Automotive Group currently trades at $165.74, in line with $164.40 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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