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Group 1 Automotive (GPI)
NYSE:GPI
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Group 1 Automotive
(NYSE:GPI)
Rating:75Outperform
Price Target:
$491.00
▲(15.38%Upside)
Positive Factors
Earnings
GPI reported reaching a new quarterly record top-line and gross profit, beating expectations driven by margin expansion and growth, particularly in aftersales.
Financial Performance
GPI reported adjusted EPS from continuing ops. of $10.17, above both estimate and consensus.
Operational Performance
GPI's commitment to being a pure-play franchised dealer has driven operational excellence, with KPIs including aftersales growth, customer retention, and technician productivity consistently outpacing peers.
Negative Factors
Macroeconomic Environment
Amid policy uncertainty and potential tariff impacts, management remains cautious—deferring some capex and discretionary spending while preparing for possible competitive shifts.
Market Conditions
Despite progress, there are still challenges with the UK luxury market and EV-related profitability headwinds.
Valuation
While GPI's operational strength justifies a high-end multiple, the uncertain macro backdrop keeps analysts on the sidelines as they await a more attractive entry point.
Group 1 Automotive (GPI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.65B
Dividend Yield0.44%
Average Volume (3M)200.03K
Price to Earnings (P/E)12.1
Beta (1Y)0.79
Revenue Growth19.75%
EPS Growth-10.74%
CountryUS
Employees20,413
SectorConsumer Cyclical
Sector Strength64
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)11.57
Shares Outstanding12,939,665
10 Day Avg. Volume216,663
30 Day Avg. Volume200,030
Financial Highlights & Ratios
PEG Ratio6.78
Price to Book (P/B)1.74
Price to Sales (P/S)0.00
P/FCF Ratio9.17
Enterprise Value/Market Cap1.53
Enterprise Value/Revenue0.20
Enterprise Value/Gross Profit5.70
Enterprise Value/Ebitda6.36
Forecast
1Y Price Target
$495.00Price Target Upside16.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Group 1 Automotive Business Overview & Revenue Model
Company DescriptionGroup 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry. The company sells new and used cars, light trucks, and vehicle parts, as well as service and insurance contracts; arranges related vehicle financing; and offers automotive maintenance and repair services. It operates primarily in 17 states in the United States; and 35 towns in the United Kingdom. As of July 11, 2022, the company owned and operated 204 automotive dealerships, 273 franchises, and 47 collision centers that offer 35 brands of automobiles. Group 1 Automotive, Inc. was incorporated in 1995 and is based in Houston, Texas.
How the Company Makes MoneyGroup 1 Automotive generates revenue through several key streams. Primarily, the company earns money by selling new and used vehicles at its numerous dealerships. The sale of new vehicles constitutes the largest portion of its revenue, followed by used vehicle sales. In addition to vehicle sales, Group 1 Automotive generates significant income from its service and parts departments, which provide maintenance, repair services, and replacement parts for various vehicle brands. Another critical revenue stream comes from the company's finance and insurance operations, where it offers customers vehicle financing options, extended service contracts, and other related insurance products. These diversified revenue streams, along with strategic partnerships with automotive manufacturers and financial institutions, contribute to the company's overall financial performance.
Group 1 Automotive Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q2-2025)
| % Change Since: 1.96%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance and growth in the U.S. with record revenues and strategic acquisitions. However, challenges in the U.K. market and potential margin pressures due to tariffs were noted as concerns.Q2-2025 Updates
Positive Updates
Record-Breaking Financial Performance
Group 1 Automotive reported quarterly record revenues of $5.7 billion, quarterly record gross profit of $936 million, and adjusted net income of $149.6 million.
Strong U.S. Performance
U.S. operations saw new car sales up 6% on a same-store basis, and used car volumes up nearly 4% year-over-year. Aftersales gross profit increased by 14.3% with customer pay revenue up 13.6% and warranty revenue up 31.9%.
Expansion and Acquisitions
Acquired 3 dealerships in Q2, expanding existing footprints in Austin, Texas, and Fort Myers, Florida. Increased technician headcount by 6% in the U.S. on a same-store basis.
Technological Advancements
Investments in technology and AI to improve customer experience and productivity, including air-conditioned shops for 90% of technicians by the end of 2025.
Negative Updates
Challenges in U.K. Market
U.K. operations faced macroeconomic challenges including weak economic growth and high inflation. SG&A percentage of gross rose to 84.3%, with additional costs due to national minimum wage and insurance increases.
U.K. Restructuring Costs
Incurred $7.6 million of restructuring costs in relation to ongoing U.K. restructuring plan, including 800 headcount reduction.
Potential Margin Pressure
Concerns over potential margin pressure due to tariffs and higher pricing that consumers may not be able to absorb.
Company Guidance
During Group 1 Automotive's Second Quarter 2025 Financial Results Conference Call, several key metrics were highlighted. The company's adjusted net income from continuing operations improved by 12.4%, with EPS seeing a 17.5% increase. In the U.S., new car sales rose by 6% on a same-store basis, with PRUs increasing by $211 sequentially. Used car volumes grew nearly 4% year-over-year, boosting gross profits by $29 per unit, while F&I performance increased by $90 per unit. Aftersales gross profit surged by 14.3%, driven by a 13.6% rise in customer pay revenue and a 31.9% increase in warranty revenue. In the U.K., despite macroeconomic challenges, used vehicle volumes rose by 8%, and the F&I PRU was up 27%. Overall, Group 1 reported record quarterly revenues of $5.7 billion and a gross profit of $936 million, with adjusted diluted EPS from continuing operations at $11.52. The company's SG&A as a percentage of gross profit saw improvements, and significant investments were made in technician headcount and rebranding efforts.Group 1 Automotive Financial Statement Overview
Summary
Group 1 Automotive exhibits robust revenue and profit growth in the TTM period, backed by efficient operations and a strong cash flow position. However, the balance sheet reflects moderate leverage, which could be a concern if not managed properly. Overall, the company is financially sound, with opportunities for improvement in debt management and cost control.Income Statement
Group 1 Automotive has shown strong revenue growth with a Revenue Growth Rate of 10.24% TTM. The Gross Profit Margin stands at 16.06%, and the Net Profit Margin is 2.17%, reflecting a solid profitability position. EBIT Margin is healthy at 4.15%, and EBITDA Margin is 4.72%, indicating efficient operational management. However, a slight decline in net income compared to the previous period suggests potential cost management challenges.85
Very Positive
Balance Sheet
The company's Debt-to-Equity Ratio is 1.03, indicating a moderate level of leverage. The Return on Equity (ROE) is 15.20%, showcasing effective use of equity to generate returns. The Equity Ratio is 31.14%, reflecting a stable capital structure but with room for improvement in asset financing. The balance sheet demonstrates stability but a higher reliance on debt could pose risks if interest rates rise.70
Positive
Cash Flow
Operating Cash Flow is strong compared to Net Income, with a ratio of 1.82, indicating good earnings quality. The Free Cash Flow to Net Income Ratio is 1.26, suggesting sufficient cash generation for reinvestment and shareholder returns. However, Free Cash Flow Growth Rate at 76.02% shows volatility, which may impact future liquidity planning.75
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 19.93B | 17.87B | 16.22B | 13.48B | 10.60B |
| Gross Profit | 3.24B | 3.02B | 2.97B | 2.44B | 1.73B |
| EBITDA | 1.02B | 1.06B | 1.18B | 979.00M | 568.70M |
| Net Income | 498.10M | 601.60M | 751.50M | 552.10M | 286.50M |
Balance Sheet | |||||
| Total Assets | 9.82B | 7.77B | 6.72B | 5.75B | 5.09B |
| Cash, Cash Equivalents and Short-Term Investments | 34.40M | 57.20M | 47.90M | 14.90M | 69.00M |
| Total Debt | 5.24B | 3.89B | 3.35B | 2.85B | 2.65B |
| 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
Neutral
425.54
Price Trends
437.79
Negative
422.08
Positive
420.43
Positive
Market Momentum
-5.73
Positive
45.42
Neutral
35.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GPI, the sentiment is Neutral. The current price of 425.54 is below the 20-day moving average (MA) of 443.90, below the 50-day MA of 437.79, and above the 200-day MA of 420.43, indicating a neutral trend. The MACD of -5.73 indicates Positive momentum. The RSI at 45.42 is Neutral, neither overbought nor oversold. The STOCH value of 35.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $11.58B | 12.34 | 18.57% | 2.78% | 3.29% | -1.29% | |
75 Outperform | $5.65B | 12.09 | 15.72% | 0.44% | 19.75% | -10.74% | |
74 Outperform | $4.67B | 11.31 | 11.92% | ― | 11.11% | -23.41% | |
69 Neutral | $7.66B | 12.73 | 27.24% | ― | 3.15% | -12.49% | |
67 Neutral | $7.99B | 9.67 | 12.95% | 0.70% | 12.96% | -6.25% | |
67 Neutral | $2.69B | 17.54 | 15.99% | 1.77% | 4.48% | -16.26% | |
63 Neutral | kr10.82B | 18.18 | 4.75% | 2.95% | 1.63% | -16.68% |
* Consumer Cyclical Sector Average
Performance Comparison
GPI
Group 1 Automotive
425.54
88.44
26.24%
ABG
Asbury
229.20
-26.40
-10.33%
AN
AutoNation
196.26
18.19
10.22%
LAD
Lithia Motors
307.07
44.76
17.06%
PAG
Penske Automotive Group
170.25
12.15
7.69%
SAH
Sonic Automotive
76.36
20.81
37.46%
Group 1 Automotive Corporate Events
Financial Disclosures
Group 1 Automotive to Release Q2 Results Soon
Neutral
Jul 8, 2025
On July 7, 2025, Group 1 Automotive announced plans to release its second-quarter financial results on July 24, 2025. The company will host a conference call on the same day to discuss these results, which could impact its market positioning and provide insights for stakeholders.
The most recent analyst rating on (GPI) stock is a Buy with a $450.00 price target. To see the full list of analyst forecasts on Group 1 Automotive stock, see the GPI Stock Forecast page.
Private Placements and FinancingBusiness Operations and Strategy
Group 1 Automotive Expands Credit Facility by $1 Billion
Positive
Jun 3, 2025
On May 30, 2025, Group 1 Automotive announced a $1.0 billion increase in its revolving syndicated credit facility, bringing it to $3.5 billion, with an extension of maturity to May 2030. This facility, which includes 18 financial institutions, enhances the company’s financial flexibility, supporting its business strategy and reflecting strong lender relationships.
The most recent analyst rating on (GPI) stock is a Buy with a $450.00 price target. To see the full list of analyst forecasts on Group 1 Automotive stock, see the GPI Stock Forecast page.
M&A TransactionsStock BuybackBusiness Operations and Strategy
Group 1 Automotive Acquires Three Luxury Dealerships
Positive
May 20, 2025
On May 19, 2025, Group 1 Automotive announced the acquisition of three luxury brand dealerships, two in Florida and one in Texas, expected to generate $330 million in annual revenues. This expansion strengthens the company’s presence in key markets and follows a year-to-date share repurchase of 401,649 shares totaling $167.3 million, highlighting the company’s strategy of growth through acquisitions and shareholder returns.
The most recent analyst rating on (GPI) stock is a Buy with a $450.00 price target. To see the full list of analyst forecasts on Group 1 Automotive stock, see the GPI Stock Forecast page.
Shareholder MeetingsBusiness Operations and Strategy
Group 1 Automotive Simplifies Bylaw Amendment Process
Neutral
May 16, 2025
On May 13, 2025, Group 1 Automotive, Inc. approved changes to its bylaws during its Annual Meeting of Shareholders. The amendments simplify the process for altering certain sections related to the board of directors, reducing the required voting power from 80% to a simple majority. These changes aim to streamline governance and potentially impact the company’s decision-making processes.
The most recent analyst rating on (GPI) stock is a Buy with a $450.00 price target. To see the full list of analyst forecasts on Group 1 Automotive stock, see the GPI Stock Forecast page.
Shareholder MeetingsDividends
Group 1 Automotive Announces Dividend Increase at Annual Meeting
Positive
May 14, 2025
On May 13, 2025, Group 1 Automotive held its Annual Meeting where stockholders voted on five proposals, including the election of nine directors and approval of executive compensation. The company also announced a quarterly dividend of $0.50 per share, payable on June 16, 2025, reflecting a 6% increase in its annualized dividend rate from the previous year. This decision underscores Group 1’s commitment to returning value to shareholders and maintaining its competitive position in the automotive retail industry.
The most recent analyst rating on (GPI) stock is a Buy with a $450.00 price target. To see the full list of analyst forecasts on Group 1 Automotive stock, see the GPI Stock Forecast page.
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.