Asbury Automotive Group, Inc. (ABG) Stock Analysis

Asbury Automotive Group’s primary competitive edge lies in its scale, operational discipline, and focus on high-margin segments. With 150+ dealership locations and 196 franchises across 31 brands, ABG is among the five largest U.S. auto retailers, trailing only Lithia, AutoNation, Penske, and Group 1 in size. Its parts and service business—responsible for 45% of gross profit in 2024—has proven resilient, with gross margin expanding to 58.3% in Q1 2025, outpacing most peers. This segment benefits from a growing national car parc and the increasing complexity of vehicles, which favors franchised dealers over independents.

ABG’s cost structure is lean: it consistently leads public peers in adjusted SG&A as a percentage of gross profit (63.9% in Q1 2025), reflecting disciplined expense management. The company’s digital retailing platform, Clicklane, and the integration of Total Care Auto (TCA) for F&I products, further differentiate its customer offering and capture more of the vehicle ownership lifecycle.

Strategic acquisitions—most recently the $1.34 billion Herb Chambers deal—have expanded ABG’s luxury mix and geographic reach, supporting revenue growth and scale benefits. However, ABG’s margins in new and used vehicle sales have compressed as industry supply normalizes, and it faces the same macro headwinds as rivals. Nonetheless, its strong service business, disciplined operations, and technology investments provide a durable advantage over less diversified or less efficient competitors.