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Group 1 Automotive (GPI)
NYSE:GPI
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Group 1 Automotive
(NYSE:GPI)
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Rating:73Outperform
Price Target:
$452.00
▲(11.55% Upside)
Group 1 Automotive's overall score reflects solid financial performance with strong revenue growth and strategic financial management, including share repurchases and dividend increases. However, challenges in profitability, leverage, and mixed technical indicators slightly temper the outlook. The positive earnings call and corporate events provide a boost, highlighting effective management and shareholder value focus.
Positive Factors
Revenue Growth
Record revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion and stability.
Shareholder Value
The increased share repurchase program reflects confidence in financial health and commitment to enhancing shareholder value, indicating robust capital management.
U.S. Market Performance
Strong performance in the U.S. market demonstrates effective operational strategies and positions the company well for sustained growth in a key region.
Negative Factors
Net Profit Margin Decline
Declining net profit margins indicate pressure on profitability, which could affect long-term financial health and investment capacity.
Increased Leverage
Higher leverage can strain financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.
Cash Flow Concerns
Negative free cash flow growth raises concerns about cash generation, which could limit the company's ability to fund operations and strategic initiatives.
Group 1 Automotive (GPI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.12B
Dividend Yield0.49%
Average Volume (3M)176.02K
Price to Earnings (P/E)14.3
Beta (1Y)0.76
Revenue Growth19.45%
EPS Growth-24.27%
CountryUS
Employees20,413
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)10.45
Shares Outstanding12,630,617
10 Day Avg. Volume195,256
30 Day Avg. Volume176,024
Financial Highlights & Ratios
PEG Ratio-0.78
Price to Book (P/B)1.88
Price to Sales (P/S)0.28
P/FCF Ratio16.40
Enterprise Value/Market Cap2.20
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit3.10
Enterprise Value/Ebitda12.36
Forecast
1Y Price Target
$481.00Price Target Upside18.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)42.11
Revenue Forecast (FY)$22.73B
Group 1 Automotive Business Overview & Revenue Model
Company DescriptionGroup 1 Automotive, Inc. (GPI) is a leading automotive retailer based in the United States, specializing in the sale of new and used vehicles as well as providing vehicle-related services. The company operates a network of dealerships across various markets, primarily focusing on the retail automotive sector. Group 1 Automotive offers a diverse range of vehicles, including passenger cars, trucks, and SUVs, representing a variety of brands. In addition to vehicle sales, GPI also provides financing, service, parts, and collision repair services, making it a comprehensive provider in the automotive retail space.
How the Company Makes MoneyGroup 1 Automotive generates revenue through multiple streams, primarily from the sale of new and used vehicles, which constitutes its largest source of income. The company also earns significant revenue from finance and insurance products offered to customers at the point of sale. Additionally, GPI generates income through its service and parts departments, which provide ongoing maintenance and repairs for vehicles sold. The company benefits from strategic partnerships with various automotive manufacturers, enhancing its inventory and enabling access to exclusive promotions. Moreover, Group 1 Automotive's focus on operational efficiency and customer service helps drive repeat business and customer loyalty, contributing to its overall earnings.
Group 1 Automotive Earnings Call Summary
Earnings Call Date:Oct 28, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 04, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a mixed performance with record-breaking revenues driven by strong U.S. operations, but challenges in the U.K. due to economic pressures and strategic restructuring. While the U.S. shows strong growth and effective cost management, the U.K. faces significant challenges, including a major asset impairment and market pressures.Q3-2025 Updates
Positive Updates
Record-Breaking Quarterly Revenue
Group 1 Automotive reported quarterly record revenues of $5.8 billion, driven by strong performance in used vehicles, parts and service, and F&I in both the U.S. and U.K.
Strong U.S. Performance
The U.S. operations achieved an all-time quarterly high PRU of nearly $2,500 and 77% new vehicle finance penetration. Aftersales also achieved record quarterly revenue and gross profit.
Positive U.K. Aftersales Growth
Despite challenges, the U.K. operations showed growth in aftersales with same-store technician headcount increasing by over 4% and F&I PRU up 16% year-over-year.
Used Vehicle Volume Growth in U.K.
U.K. used vehicle volumes increased by nearly 4%, with the teams exercising discipline in aging and reconditioning processes.
Negative Updates
U.K. Economic Challenges
The U.K. environment faced inflation, wage, and insurance cost pressures, leading to compressed margins. New lower-cost entrants gained market share, impacting retail conditions.
Asset Impairment Charges
A $123.9 million asset impairment was recorded due to the decision to exit the Jaguar Land Rover brand in the U.K., with an additional impact of GBP 3 million from a JLR cyberattack.
Decline in U.K. New Vehicle Revenues
New vehicle same-store volumes in the U.K. declined by 4% with local currency GPUs moderating by 1% versus the prior year quarter.
Company Guidance
During Group 1 Automotive's Third Quarter 2025 Financial Results Conference Call, several key metrics and strategic actions were highlighted. The company reported record quarterly revenues of $5.8 billion and a gross profit of $920 million. Adjusted net income was $135 million, with an adjusted diluted EPS of $10.45. In the U.S., new vehicle unit sales rose mid-single digits, with F&I achieving an all-time quarterly high PRU of nearly $2,500, and aftersales hitting record revenue and gross profit. The U.K. market faced challenges, but used vehicle volumes increased by nearly 4%, and same-store F&I PRU grew over 16% year-over-year. Strategic cost management included a $123.9 million asset impairment due to the decision to exit the Jaguar Land Rover brand in the U.K., along with reducing U.K. headcount by about 700 positions. The company maintained a strong liquidity position with $1 billion available, supporting acquisitions and share repurchases, including significant buybacks totaling nearly one-third of the company's outstanding shares since 2022.Group 1 Automotive Financial Statement Overview
Summary
Group 1 Automotive demonstrates solid revenue growth and a stable gross profit margin, but faces challenges with declining net profit margins and increased leverage. Cash flow generation is a concern, with negative free cash flow growth. The company needs to focus on improving profitability and managing debt levels to enhance financial stability.Income Statement
Group 1 Automotive shows a steady revenue growth rate of 2.55% in the TTM, indicating resilience in a competitive market. However, the net profit margin has decreased to 1.66% from 2.50% in the previous year, suggesting pressure on profitability. The gross profit margin remains stable at around 16%, but the EBIT and EBITDA margins have declined, reflecting potential operational challenges.75
Positive
Balance Sheet
The company's debt-to-equity ratio has increased to 1.86, indicating higher leverage, which could pose risks if not managed carefully. Return on equity has decreased to 12.39% from 16.75% in the previous year, showing a decline in efficiency. The equity ratio remains stable, suggesting a balanced asset structure.70
Positive
Cash Flow
Free cash flow growth has turned negative at -17.90%, raising concerns about cash generation. The operating cash flow to net income ratio is relatively low at 0.23, indicating potential cash flow constraints. However, the free cash flow to net income ratio remains healthy at 0.63, suggesting some level of cash flow stability.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 22.54B | 19.93B | 17.87B | 16.22B | 13.48B | 10.60B |
| Gross Profit | 3.63B | 3.24B | 3.02B | 2.97B | 2.44B | 1.73B |
| EBITDA | 909.90M | 1.02B | 1.06B | 1.18B | 963.20M | 557.70M |
| Net Income | 376.30M | 498.20M | 601.60M | 751.50M | 552.10M | 286.50M |
Balance Sheet | ||||||
| Total Assets | 10.39B | 9.82B | 7.77B | 6.72B | 5.75B | 5.09B |
| Cash, Cash Equivalents and Short-Term Investments | 30.80M | 34.40M | 57.20M | 47.90M | 14.90M | 69.00M |
| Total Debt | 5.68B | 5.24B | 3.89B | 3.35B | 2.85B | 2.65B |
| Total Liabilities | 7.34B | 6.85B | 5.10B | 4.48B | 3.92B | 3.64B |
| Stockholders Equity | 3.05B | 2.97B | 2.67B | 2.24B | 1.83B | 1.45B |
Cash Flow | ||||||
| Free Cash Flow | 494.00M | 341.20M | -121.90M | 430.40M | 1.12B | 702.20M |
| Operating Cash Flow | 778.70M | 586.30M | 63.50M | 585.90M | 1.26B | 805.40M |
| Investing Cash Flow | -732.40M | -1.28B | -366.10M | -484.60M | -1.25B | -74.70M |
| Financing Cash Flow | -75.90M | 681.10M | 311.90M | -67.30M | -74.00M | -668.10M |
Group 1 Automotive Technical Analysis
Negative
405.21
Price Trends
407.48
Negative
428.20
Negative
424.37
Negative
Market Momentum
1.06
Positive
48.63
Neutral
17.70
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GPI, the sentiment is Negative. The current price of 405.21 is below the 20-day moving average (MA) of 407.28, below the 50-day MA of 407.48, and below the 200-day MA of 424.37, indicating a bearish trend. The MACD of 1.06 indicates Positive momentum. The RSI at 48.63 is Neutral, neither overbought nor oversold. The STOCH value of 17.70 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GPI.
Group 1 Automotive Risk Analysis
Group 1 Automotive disclosed 23 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $8.34B | 9.95 | 13.44% | 0.63% | 8.56% | 17.84% | |
73 Outperform | $5.12B | 14.26 | 12.27% | 0.49% | 19.45% | -24.27% | |
70 Neutral | $7.53B | 12.30 | 27.16% | ― | 6.06% | -1.71% | |
67 Neutral | $4.61B | 8.31 | 15.49% | ― | 8.07% | 60.95% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $5.65B | 12.72 | 7.46% | ― | -1.49% | 2.78% | |
61 Neutral | $2.17B | 17.18 | 12.51% | 2.30% | 9.09% | -33.59% |
* Consumer Cyclical Sector Average
GPI
Group 1 Automotive
405.21
-11.33
-2.72%
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Group 1 Automotive Corporate Events
Stock BuybackDividendsBusiness Operations and Strategy
Group 1 Automotive Boosts Share Repurchase Program
Positive
Nov 12, 2025
On November 11, 2025, Group 1 Automotive announced that its Board of Directors increased the company’s share repurchase authorization to $500 million, up by $457 million. This move reflects the company’s strategic financial management and commitment to enhancing shareholder value. Additionally, the board declared a quarterly dividend of $0.50 per share, payable on December 15, 2025, aligning with the company’s annualized dividend rate increase from $1.88 in 2024 to $2.00 in 2025. These financial decisions underscore Group 1 Automotive’s robust operational performance and its focus on returning value to shareholders.
Financial Disclosures
Group 1 Automotive Q3 Results Announcement Scheduled
Neutral
Oct 14, 2025
On October 13, 2025, Group 1 Automotive announced it will release its third-quarter financial results on October 28, 2025, before the market opens. The company will host a conference call later that morning to discuss the results, which will be accessible via a live internet simulcast and telephonic replay, indicating a proactive approach in engaging with investors and stakeholders.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.