Group 1 Automotive (GPI) AI Stock Analysis

• Market Cap: $5.64B
• Dividend Yield: 0.45%
• Average Volume (3M): 163.56K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 0.82
• Revenue Growth: 19.75%
• EPS Growth: -10.74%
• Country: US
• Employees: 20,413
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 11.57
• Shares Outstanding: 12,939,665
• 10 Day Avg. Volume: 197,114
• 30 Day Avg. Volume: 163,555
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.96
• Enterprise Value/Revenue: 0.50
• Enterprise Value/Gross Profit: 3.12
• Enterprise Value/Ebitda: 10.63
• 1Y Price Target: $497.50
• Price Target Upside: 14.23% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 71 Outperform
• Price Target: $482.00 ▲(10.67% Upside)

Group 1 Automotive's strong financial performance and positive earnings call insights are the primary drivers of its stock score. However, technical indicators suggest bearish momentum, and valuation metrics indicate moderate attractiveness. The company's cautious approach to macroeconomic challenges and strategic investments further supports its potential for future growth.

Positive Factors

Revenue Growth

Record revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion and profitability.

Market Expansion

Strategic acquisitions enhance market presence and brand portfolio, providing a competitive edge and potential for increased market share.

Operational Efficiency

Strong aftersales growth reflects efficient operations and customer retention, contributing to stable cash flow and long-term profitability.

Negative Factors

Rising SG&A Costs

Higher SG&A costs can pressure margins and reduce profitability, necessitating cost control measures to sustain financial health.

Economic Challenges in the U.K.

Economic headwinds in the U.K. could impact revenue and profitability, requiring strategic adjustments to mitigate regional risks.

Tariff Concerns

Potential tariffs could increase costs and affect pricing strategies, impacting competitiveness and profit margins in the long term.

Group 1 Automotive Business Overview & Revenue Model

Company Description

Group 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 Money

Group 1 Automotive generates revenue through several key streams. The primary source of income comes from the sale of new and used vehicles, where the company earns a profit margin on each vehicle sold. Additionally, the company makes money through financing services offered to customers, including loans and lease agreements, often in partnership with financial institutions. Automotive parts and service departments contribute significantly to revenue as well, providing ongoing maintenance, repairs, and accessories for vehicles sold. Furthermore, Group 1 engages in strategic partnerships with manufacturers and financial services companies, enhancing its offerings and driving sales. Overall, the combination of vehicle sales, financing, and after-sales services forms the core of Group 1 Automotive's revenue model.

Group 1 Automotive Financial Statement Overview

Summary

Group 1 Automotive demonstrates strong revenue and profit growth, supported by efficient operations and a robust cash flow position. However, the balance sheet indicates moderate leverage, which may pose risks if not managed well.

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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 435.53
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 435.53 is below the 20-day moving average (MA) of 463.01, below the 50-day MA of 446.07, and above the 200-day MA of 433.67, indicating a neutral trend. The MACD of -3.24 indicates Positive momentum. The RSI at 37.37 is Neutral, neither overbought nor oversold. The STOCH value of 18.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GPI.

Group 1 Automotive Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABG	74 Outperform	$4.70B	8.73	14.30%	―	8.39%	40.35%
GPI	71 Outperform	$5.64B	12.07	15.72%	0.45%	19.75%	-10.74%
LAD	71 Outperform	$8.18B	9.45	12.75%	0.68%	10.25%	9.08%
AN	70 Outperform	$8.21B	13.64	25.67%	―	3.15%	-12.49%
SAH	63 Neutral	$2.56B	16.69	20.33%	1.91%	4.48%	-16.26%
KMX	56 Neutral	$6.73B	13.18	8.40%	―	2.17%	28.59%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Group 1 Automotive Corporate Events

Group 1 Automotive Appoints New HR Chief

On August 11, 2025, Group 1 Automotive appointed Melkeya McDuffie as Senior Vice President and Chief Human Resources Officer, highlighting her extensive HR leadership experience across various industries. The company also announced a third-quarter cash dividend of $0.50 per share, payable on September 16, 2025, and provided an update on its share repurchase activity, reflecting its commitment to shareholder returns.

Group 1 Automotive Acquires Mercedes-Benz Dealership in Atlanta

On August 4, 2025, Group 1 Automotive announced the acquisition of Mercedes-Benz of Buckhead, a high-volume luxury dealership in Atlanta, Georgia. This acquisition is expected to generate $210 million in annual revenues and expands Group 1’s presence in the Southeastern U.S. to 29 dealerships. The acquisition aligns with Group 1’s strategy of investing in high-performing dealerships and marks a significant expansion of their partnership with Mercedes-Benz, adding to their portfolio of 33 Mercedes-Benz dealerships in the U.S. and the U.K. In 2025, Group 1 has acquired an estimated $640 million in annual revenues, following $3.9 billion in acquired revenues in 2024.

Group 1 Automotive to Release Q2 Results Soon

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.

Group 1 Automotive Expands Credit Facility by $1 Billion

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.

Group 1 Automotive Acquires Three Luxury Dealerships

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.