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Group 1 Automotive (GPI)
NYSE:GPI
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Group 1 Automotive
(NYSE:GPI)
73Outperform
Positive Factors
Earnings
GPI reported adjusted EPS from continuing operations of $10.17, above both estimate and consensus.
Sales Performance
Finance & Insurance same-store sales increased 10.9% YoY, better than the estimate for a -1.8% YoY decrease.
Negative Factors
Operating Expenses
Adjusted SG&A as a % of gross profit was worse than the 67.7% estimate, and increased 360bps YoY.
Used Units Performance
Used unit comps in the US were weaker than expected, suggesting GPI traded margins for volumes.
Group 1 Automotive (GPI) vs. S&P 500 (SPY)
Market Cap
$5.33B
Dividend Yield0.46%
Average Volume (3M)194.09K
Price to Earnings (P/E)11.6
Beta (1Y)0.81
Revenue Growth15.13%
EPS Growth-15.91%
CountryUS
Employees20,413
SectorConsumer Cyclical
Sector Strength59
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)35.53
Shares Outstanding12,934,719
10 Day Avg. Volume156,898
30 Day Avg. Volume194,094
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.91
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit3.15
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$460.80Price Target Upside11.73% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Group 1 Automotive Business Overview & Revenue Model
Company DescriptionGroup 1 Automotive, Inc. (GPI) is a leading operator in the automotive retail industry, primarily engaged in the sale of new and used cars, light trucks, and vehicle parts. The company also offers automotive maintenance and repair services and arranges related financing, insurance, and service contracts. With a wide network of dealerships across the United States, the United Kingdom, and Brazil, Group 1 Automotive represents a diverse portfolio of automotive brands, catering to a broad customer base with varying transportation needs.
How the Company Makes MoneyGroup 1 Automotive generates revenue primarily through the sale of new and used vehicles, which constitutes a significant portion of its income. The company also earns money from its parts and service departments, which provide vehicle repairs, maintenance, and the sale of automotive parts. Additionally, Group 1 Automotive derives income from finance and insurance products, including arranging third-party vehicle financing and offering extended service contracts and insurance products to customers. The company's strategic partnerships with major automotive manufacturers and financial institutions enhance its ability to offer a comprehensive suite of products and services, thereby contributing to its overall earnings.
Group 1 Automotive Financial Statement Overview
Summary
Group 1 Automotive exhibits strong financial health with consistent revenue and profit growth, robust return metrics, and efficient operations. However, high leverage and declining free cash flow warrant close monitoring. The company is well-positioned in the auto dealership industry, but potential risks from economic fluctuations and capital structure need to be managed carefully.Income Statement
Group 1 Automotive's income statement shows robust performance with consistent revenue growth from $10.85 billion in 2020 to $20.97 billion TTM. Gross and net profit margins are healthy at 15.9% and 2.3% TTM, respectively. EBIT and EBITDA margins indicate strong operational efficiency at 4.3% and 4.7%, respectively, despite a slight decline in EBIT over the past year.85
Very Positive
Balance Sheet
The company's balance sheet reflects a stable financial position. The debt-to-equity ratio is high at 1.76, indicating leveraged operations typical for the industry. ROE is strong at 15.9%, signaling effective use of equity capital. The equity ratio is solid at 30.3%, demonstrating a healthy proportion of equity financing.78
Positive
Cash Flow
Cash flow analysis reveals mixed results. Operating cash flow to net income is positive, emphasizing cash-generating capability. However, free cash flow has decreased from the previous year. The free cash flow to net income ratio stands at 32.6%, lower than prior periods, indicating potential challenges in maintaining high cash flow levels.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 19.93B | 17.87B | 16.22B | 13.48B | 10.85B | Gross Profit |
| 3.24B | 3.02B | 2.97B | 2.44B | 1.77B | EBIT |
| 909.10M | 968.60M | 1.09B | 884.40M | 486.10M | EBITDA |
| 1.02B | 1.06B | 1.21B | 963.40M | 568.70M | Net Income Common Stockholders |
| 498.10M | 601.60M | 751.50M | 552.10M | 286.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 34.40M | 57.20M | 47.90M | 14.90M | 87.30M | Total Assets |
| 9.82B | 7.77B | 6.72B | 5.75B | 5.09B | Total Debt |
| 5.24B | 3.89B | 3.35B | 2.85B | 2.68B | Net Debt |
| 5.20B | 3.84B | 3.30B | 2.83B | 2.59B | Total Liabilities |
| 6.85B | 5.10B | 4.48B | 3.92B | 3.64B | Stockholders Equity |
| 2.97B | 2.67B | 2.24B | 1.83B | 1.45B |
| Cash Flow | Free Cash Flow | |||
| 341.20M | 4.80M | 430.40M | 1.12B | 702.20M | Operating Cash Flow |
| 586.30M | 190.20M | 585.90M | 1.26B | 805.40M | Investing Cash Flow |
| -1.28B | -366.10M | -484.60M | -1.25B | -74.70M | Financing Cash Flow |
| 681.10M | 185.20M | -67.30M | -74.00M | -668.10M |
Group 1 Automotive Technical Analysis
Positive
412.43
Price Trends
411.92
Negative
426.16
Negative
396.50
Positive
Market Momentum
-0.43
Negative
51.45
Neutral
55.97
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GPI, the sentiment is Positive. The current price of 412.43 is above the 20-day moving average (MA) of 396.95, above the 50-day MA of 411.92, and above the 200-day MA of 396.50, indicating a neutral trend. The MACD of -0.43 indicates Negative momentum. The RSI at 51.45 is Neutral, neither overbought nor oversold. The STOCH value of 55.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GPI.
Group 1 Automotive Risk Analysis
Group 1 Automotive disclosed 22 risk factors in its most recent earnings report. Group 1 Automotive reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Group 1 Automotive Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $10.41B | 11.45 | 18.57% | 2.82% | 3.29% | -1.30% | |
74 Outperform | $6.49B | 9.75 | 28.45% | ― | -0.24% | -19.76% | |
74 Outperform | $4.37B | 10.58 | 11.92% | ― | 11.11% | -23.41% | |
73 Outperform | $7.72B | 9.34 | 12.95% | 0.71% | 12.96% | -6.25% | |
73 Outperform | $5.33B | 11.61 | 16.25% | 0.46% | 15.13% | -15.91% | |
68 Neutral | $2.13B | 8.95 | 24.52% | 2.07% | 1.59% | 43.91% | |
61 Neutral | $6.65B | 11.71 | 3.09% | 3.98% | 2.65% | -20.82% |
* Consumer Cyclical Sector Average
Performance Comparison
GPI
Group 1 Automotive
412.43
113.58
38.01%
ABG
Asbury
222.33
0.73
0.33%
AN
AutoNation
176.76
10.32
6.20%
LAD
Lithia Motors
296.50
36.03
13.83%
PAG
Penske Automotive Group
157.35
7.59
5.07%
SAH
Sonic Automotive
62.74
6.25
11.06%
Group 1 Automotive Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 3.46%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong revenue performance and strategic growth in the UK and US markets. However, challenges in controlling costs, specifically SG&A leverage, and the impact of lower GPUs on profitability were notable. While there were significant achievements in aftersales and share repurchases, the decline in gross profit and EV GPU drag are areas of concern.Q1-2025 Updates
Positive Updates
Record UK Performance
Group 1 Automotive achieved record UK results in Q1 2025, with the UK market growing by 6.4% and the retail market by 9.5%. The integration of acquisitions in the UK significantly improved market presence, achieving internal profit and cost targets.
US Revenue Growth
In the US, new vehicle revenues grew by 9.4% on a reported basis, with used vehicle revenues also increasing. F&I performance improved by $98 on a same-store basis, contributing to overall revenue growth.
Aftersales Growth
Aftersales revenues increased by 7.7% on a reported basis and 5.6% on a same-store basis, with customer pay up over 6% and warranty revenue nearly 30% higher.
Technician Workforce Increase
The US technician headcount increased by nearly 8% year over year, with a focus on expanding aftersales capacity and improving technician productivity.
Share Repurchase and Capital Allocation
Group 1 Automotive repurchased approximately 287,000 shares for $123 million, reducing the share count by about 3% since January and maintaining a strong liquidity position.
Negative Updates
Decline in Gross Profit
Despite revenue growth, Group 1 faced a modest decline in same-store and reported gross profit by less than 0.9% and 4.9%, respectively, due to lower GPUs and higher volumes.
SG&A Leverage Challenges
In the US, SG&A as a percentage of gross profit increased by 28 basis points to 66.9%, indicating challenges in managing operational efficiency and cost control.
EV GPU Drag
Electric vehicle GPUs remained approximately $1,000 lower than internal combustion engine vehicles, posing a challenge to overall profitability.
Weather Impact on Service Business
Severe weather in February affected service operations in the Northeast and Houston, making it difficult to recover lost service work.
Company Guidance
In the first quarter of 2025, Group 1 Automotive reported several key financial metrics, reflecting strong performance and strategic adjustments across its operations in the UK and the US. The company achieved a record gross profit of $892 million and an adjusted net income of $134.7 million, with an adjusted diluted earnings per share from continuing operations at $10.17. In the UK, market growth was evident with a 6.4% overall increase and a 9.5% rise in the retail sector. Group 1's UK operations delivered record results, aligning business processes and achieving internal profit and cost targets, while also saving over £30 million through headcount reductions. The US operations saw a 9.4% increase in new vehicle revenue on a reported basis and a 7.4% rise on a same-store basis. Aftersales revenue grew by 7.7% and 5.6% on a reported and same-store basis, respectively, with a significant 30% increase in warranty revenue. Despite a slight increase in SG&A as a percentage of gross profit, Group 1 maintained operational efficiency, with US technician headcount rising nearly 8% year-over-year. The company also executed a strategic capital allocation plan, acquiring $100 million in revenues and repurchasing 2% of its shares for $122.8 million.Group 1 Automotive Corporate Events
Financial Disclosures
Group 1 Automotive to Announce Q1 2025 Results
Neutral
Apr 9, 2025
On April 8, 2025, Group 1 Automotive announced it will release its first quarter 2025 financial results on April 24, 2025, before the market opens. A conference call hosted by CEO Daryl Kenningham and senior management will follow to discuss the results, which will be available live via webcast and telephonic replay, reflecting the company’s commitment to transparent communication with its stakeholders.
Spark’s Take on GPI Stock
According to Spark, TipRanks’ AI Analyst, GPI is a Neutral.
Group 1 Automotive’s overall score reflects robust financial performance and positive earnings call insights, especially in the U.S. market. However, technical indicators point to bearish momentum, and challenges in the U.K. market pose potential risks. The valuation appears reasonable, though the low dividend yield might deter some investors. Continued growth depends on addressing leverage and profitability margins, alongside navigating U.K. market challenges.
To see Spark’s full report on GPI stock, click here.
Executive/Board Changes
Group 1 Automotive Announces Retirement of Senior VP
Neutral
Feb 26, 2025
On February 26, 2025, Group 1 Automotive announced the retirement of Michael D. Jones, Senior Vice President – Aftersales, effective September 1, 2025. Post-retirement, Mr. Jones will continue as a part-time employee until December 31, 2025, receiving his regular salary and a prorated annual bonus. He will also benefit from continued vesting of his restricted stock awards, contingent upon compliance with certain agreement provisions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.