Sonic Automotive is 46.5% under its high at 8.4x next year’s earnings, and a 10% owner just bought $1.7M. What's your take fellas?

Paul Rusnak, a 10% owner of Sonic Automotive (SAH), bought $1.66M of the stock (open market buy) on Oct 5 at an average of $59.76.

SAH closed at $60.52 on Oct 7, down 0.8%.

It is 46.5% under its 52-week high ($113.06) and below both its 50 day ($75.69) and 200 day ($73.33) averages.

The numbers I looked at:
10x last year’s earnings, 8.4x next year’s expected earnings, a 21% return on equity and a 1% profit margin. On the fund side, LSV Asset Management opened a new position holding $62.2M at the end of Q2 2026, and JPMorgan added to $25M.

My read is that the multiple is low for a reason: a 1% margin means a small change in car sales or financing costs moves profit a lot. The 21% return on equity looks great but can be flattered by debt.

What I can’t tell from the numbers is how much of the 46.5% drop is a cyclical dip versus a real change in the business. For people who follow auto retail, does 8.4x next year’s earnings look cheap or fair ?