DULUTH, Ga. - Asbury (NYSE:ABG) Automotive Group, Inc. (NYSE:ABG), a major player in the U.S. automotive retail and service sector, has been affected by a cyber-attack on one of its vendors, CDK Global (NASDAQ:CDK), which was discovered last Wednesday. The breach has impacted various services essential to Asbury's operations, including sales, service, inventory, customer relationship management, and accounting.
Despite the setback, Asbury's stores have implemented contingency plans to maintain operational status, with sales and service activities continuing, albeit at a potentially reduced pace. Notably, Koons Automotive locations in Maryland and Virginia, as well as the online vehicle purchasing platform Clicklane, have experienced minimal disruption due to their non-reliance on CDK's compromised systems.
The full extent of the cyber-attack's impact on Asbury's business operations and whether customer data was compromised remains unclear. As such, the company has yet to determine if the incident will materially affect its financial condition or operational results.
About Asbury Automotive Group: Asbury, based in Duluth, GA, operates 157 new vehicle dealerships across the U.S., offering a variety of automotive products and services. The company is listed on the Fortune 500 and has been recognized for its workplace environment by Newsweek and U.S. News & World Report.
In other recent news, Asbury Automotive Group has made significant moves, including the expansion of its share repurchase program and changes in its leadership. The company has increased its share repurchase program to $400 million, indicating a confident outlook on its long-term business prospects. This expanded authorization includes an additional $246 million added to the existing program. In 2024 alone, Asbury repurchased approximately 281,000 shares, amounting to about $59 million.
In addition to this, Asbury announced the upcoming retirement of its Chief Legal Officer (CLO), George A. Villasana. After more than 12 years of service, Villasana will transition into a Special Advisor role by June 30, 2024, before his final retirement in March 2025. Asbury is currently conducting an extensive search to select a new CLO, considering both internal and external candidates. These developments are part of the recent changes within the company.
InvestingPro Insights
In light of the recent cyber-attack on Asbury Automotive Group's vendor, investors may be evaluating the company's financial resilience and future prospects. Asbury's proactive share buyback initiative, as indicated by the InvestingPro Tips, suggests a management confident in the company's value. Moreover, the company's attractive valuation is reflected in its low earnings multiple, with a P/E Ratio of 8.41, which further dips to 7.14 when adjusted for the last twelve months as of Q1 2024.
While Asbury does not pay dividends, it has demonstrated a strong return over the past five years, a testament to its growth and operational efficiency. Nonetheless, the company does face challenges with weak gross profit margins, currently standing at 18.22% for the last twelve months as of Q1 2024. This could be a concern for investors as it may affect the company's profitability in the face of operational disruptions like the recent cyber-attack.
With a market capitalization of $4.64 billion, Asbury's financial health appears robust, supported by a solid revenue growth of 2.1% in the last twelve months as of Q1 2024. This is further underscored by a significant quarterly revenue growth of 17.28% in Q1 2024. Investors can explore additional InvestingPro Tips by visiting https://www.investing.com/pro/ABG, where they can find a comprehensive analysis to inform their investment decisions. For those considering a subscription, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
As Asbury navigates through the aftermath of the cyber-attack, these financial metrics and insights could provide investors with a clearer picture of the company's standing and potential resilience against such operational challenges.
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