Sonic Automotive vs. Penske Automotive: Which Auto Dealer Stock Is the Better Buy?

Sonic Automotive (NYSE: SAH) and Penske Automotive Group (NYSE: PAG | PAG Price Prediction) both reported Q4 2025 earnings into a brutal consumer backdrop, with University of Michigan sentiment at 56.4 as of January 2026, well into recessionary territory. Both missed on the bottom line, but the stories underneath are very different.

EchoPark Inflects. Penske Reshapes.

Sonic posted Q4 revenue of $3.87 billion, down slightly year over year, but gross profit hit record $598.7 million, up 4%. The headline was EchoPark, Sonic’s used-vehicle-only retail concept, which swung from a $2.6 million segment loss to $3.6 million in segment income. Full-year EchoPark adjusted EBITDA came in at $49.2 million, up 78%. CEO David Smith framed it confidently: “Our fourth quarter results reflect the strength of Sonic Automotive’s diversified business model and the disciplined execution of our long-term strategy. Despite a dynamic operating environment throughout 2025, our team delivered record performance across all three segments of our business.”

Penske reported Q4 revenue of $7.77 billion and a record service and parts quarter at $844.8 million, but the EPS miss was ugly: $2.83 versus a $3.18 consensus. New retail units fell 10%, partly from tariff pull-forward dynamics and partly from an 800-unit Land Rover and Jaguar shortfall from an OEM cyber incident. SG&A as a percentage of gross profit ballooned to 74.3% from 70.4% a year ago.

One Builds a New Concept. One Buys Better Brands.

Penske’s portfolio reshaping is deliberate. Over two years, Roger Penske divested 23 non-strategic dealerships representing $700 million in revenue and redeployed capital into Toyota and Lexus stores representing approximately $2 billion in estimated annualized revenue. Premium brands now account for 74% of retail automotive revenue, providing pricing resilience but concentrating tariff exposure.

Sonic is playing a longer game with EchoPark, planning to resume footprint expansion in late 2026 with a target of 90% of the U.S. population. That requires capital, patience, and sustained GPU discipline.

Tariffs Are the Wildcard for Both in 2026

Sonic guided new vehicle GPU to $2,700 to $3,000 per unit, flagging the second half as potentially weaker due to tariffs. Penske offered no specific quantitative guidance, which reflects the visibility problem facing the whole industry.

The key watch for Sonic is whether EchoPark can sustain GPU in the $3,400 to $3,600 range while scaling volume. For Penske, the question is whether Toyota and Lexus acquisitions can absorb SG&A pressure before freight and U.K. softness drag full-year results further.

How the Two Stocks Compare on Valuation and Income

At a forward P/E of around 11x and a dividend yield of 3.56% with 21 consecutive quarterly increases, Penske carries a forward P/E of around 11x and a dividend yield of 3.56%. SAH trades at a forward P/E closer to 9x with a 2.42% yield, reflecting a forward P/E closer to 9x and a 2.42% yield. Analysts have a $76.73 price target on SAH versus a current price near $60.69. EchoPark’s ability to sustain GPU in the $3,400 to $3,600 range while scaling volume remains the key metric to watch for Sonic, while SG&A leverage and freight trends are the primary variables to monitor at Penske.