9 Best Auto and Truck Dealership Stocks to Buy Now

Why It Matters

Dealership stocks remain a rare growth play in a market where EV demand is faltering and policy shifts threaten traditional incentives, offering investors exposure to steady cash flow and hedge‑fund‑driven upside.

Key Takeaways

• Penske's Q4 revenue fell to $7.8B, EPS $2.83
• Lithia posted record $37.6B revenue, EPS $32.32
• Citi cut price targets for both Penske and Lithia by ~8%
• Dealerships benefit from hedge‑fund‑driven stock picks, outpacing market
• EV sales dropped to 6.5% after $7,500 credit ended

Pulse Analysis

The U.S. auto dealership sector has proven surprisingly resilient despite a broader dip in electric‑vehicle (EV) sales. After the federal $7,500 tax credit expired, EV market share slipped to 6.5% over the last quarter, pressuring manufacturers but leaving traditional dealers with a steady flow of gasoline‑powered inventory. Higher fuel prices have partially offset the slowdown, sustaining consumer interest in conventional models and preserving dealer margins.

Penske Automotive Group and Lithia & Driveway dominate the list of recommended stocks, each reporting distinct financial narratives. Penske’s fourth‑quarter revenue declined to $7.8 billion, with adjusted EPS of $2.91, prompting Citi to lower its price objective to $193. Lithia, meanwhile, posted a record $37.6 billion in full‑year revenue and a robust EPS of $32.32, while repurchasing $947 million of its own shares and completing $2.4 billion of acquisitions. Both firms saw Citi trim price targets by roughly 8%, yet analysts retained buy ratings, signaling confidence in their diversified service models and strategic growth initiatives.

From an investment perspective, the appeal lies in the alignment with elite hedge‑fund positions. Insider Monkey’s quarterly newsletter, which mirrors top hedge‑fund picks, claims a 498.7% cumulative return since 2014, far outpacing the broader market. As policymakers continue to reshape EV incentives and gasoline‑vehicle regulations, dealership stocks that combine solid cash generation with hedge‑fund backing present a compelling, lower‑volatility entry point for investors seeking exposure to the automotive retail ecosystem.