Is Sonic Automotive, Inc. overvalued or undervalued?

As of 24 July 2025, the valuation grade for Sonic Automotive, Inc. has moved from very attractive to attractive, indicating a shift in perception. The company appears to be fairly valued based on its current metrics. Key ratios include a P/E ratio of 21, an EV to EBITDA of 13.17, and a PEG ratio of 2.63, which suggest that the stock is priced in line with its earnings potential relative to growth.
In comparison to its peers, Sonic Automotive has a P/E ratio of 17.92, which is higher than Rush Enterprises, Inc. at 15.86 but lower than PriceSmart, Inc. at 24.74. This positions Sonic Automotive in a competitive yet cautious space within the retailing industry. Notably, the company has outperformed the S&P 500 with a 1-year return of 41.38% compared to the index's 17.14%, reinforcing the notion that while the stock is fairly valued, it has demonstrated strong performance relative to broader market trends.