Group 1 Automotive (GPI)
NYSE:GPI
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Group 1 Automotive
(NYSE:GPI)
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Rating:62Neutral
Price Target:
$318.00
▼(-5.92% Downside)
Action:ReiteratedDate:02/14/26
The score is driven primarily by solid but weakening fundamentals (strong revenue growth offset by significant margin and earnings compression, plus leverage and cash-flow volatility). Technicals are the main drag given a clear downtrend despite oversold readings. Valuation is reasonable on P/E but provides limited support due to a low dividend yield, while the earnings call and dividend increase add a moderately positive tone on cash generation and capital allocation despite UK and GPU headwinds.
Positive Factors
Record Revenue & Volumes
Sustained top-line scale and record unit volumes underpin structural revenue resilience across cycles. Higher gross profit and volume diversity (new + used) improve bargaining with OEMs and support operational leverage, making revenue generation less dependent on short-term market swings.
Negative Factors
Margin Compression
Material margin erosion from ~4.6% (2022) to ~1.4% (2025) signals weaker earnings power even with higher revenue. Structural margin pressures—FGP moderation, higher SG&A and GPU compression—reduce free cash flow sensitivity and long-term return on invested capital.
Read all positive and negative factors
Positive Factors
Negative Factors
Record Revenue & Volumes
Sustained top-line scale and record unit volumes underpin structural revenue resilience across cycles. Higher gross profit and volume diversity (new + used) improve bargaining with OEMs and support operational leverage, making revenue generation less dependent on short-term market swings.
Read all positive factors
Group 1 Automotive (GPI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.01B
Dividend Yield0.49%
Average Volume (3M)174.04K
Price to Earnings (P/E)15.8
Beta (1Y)0.72
Revenue Growth19.45%
EPS Growth-24.27%
CountryUS
Employees20,413
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)8.49
Shares Outstanding11,872,577
10 Day Avg. Volume111,067
30 Day Avg. Volume174,042
Financial Highlights & Ratios
PEG Ratio-0.50
Price to Book (P/B)1.82
Price to Sales (P/S)0.22
P/FCF Ratio11.95
Enterprise Value/Market Cap2.46
Enterprise Value/Revenue0.44
Enterprise Value/Gross Profit2.82
Enterprise Value/Ebitda11.54
Forecast
1Y Price Target
$422.86Price Target Upside25.10% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
EPS Forecast (FY)42.05
Revenue Forecast (FY)$22.99B
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; a...
How the Company Makes Money
GPI generates revenue through multiple dealership-based streams. (1) New vehicle sales: It sells new vehicles as a franchised dealer for various automotive manufacturers; revenue is recorded as the retail selling price, with gross profit driven by...
Group 1 Automotive Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operating and financial picture: record full-year revenues and gross profits, strong parts & service and F&I performance, robust cash generation, and active capital allocation (including sizable buybacks and targeted acquisitions). Offsetting these positives are concentrated challenges in the UK (volume and GPU pressure, competition and restructuring), moderation in vehicle GPUs (especially in luxury and used segments), some impairment charges, and near-term SG&A and leverage headwinds. Overall, the positives (record results, cash flow, operational improvements and clear remediation actions) outweigh the localized and addressable negatives, but the UK execution and GPU trends are watch points for 2026.Positive Updates
Record Full-Year Results and Volumes
Recorded all-time high full-year gross profit of more than $3.6 billion and sold a record 459,000 new and used vehicles in 2025.
Negative Updates
Challenging UK Macro Environment
UK faced weak economic growth, persistent inflation, increased competition from Chinese OEMs and BEV mandate margin pressure; resulting actions included UK headcount reductions of 537 positions in 2025 and ongoing restructuring and exit of select OEM sites (e.g., JLR).
Read all updates
Q4-2025 Updates
Positive
Negative
Record Full-Year Results and Volumes
Recorded all-time high full-year gross profit of more than $3.6 billion and sold a record 459,000 new and used vehicles in 2025.
Read all positive updates
Company Guidance
Management guided that they will continue disciplined capital allocation and operational execution after reporting 2025 results that included full‑year revenues of $5.6 billion, an all‑time high gross profit of >$3.6 billion (including record parts & service gross profit of nearly $1.6 billion), 459,000 vehicles sold, adjusted net income of $105 million and adjusted diluted EPS of $8.49; liquidity of $883 million (cash $537M, $346M available on the acquisition line), rent‑adjusted leverage of 3.1x with an objective to stay below 3x, $699M of adjusted operating cash flow and $494M of free cash flow after $205M of CapEx. They expect near‑term capital deployment to include acquisitions (recent deals expected to add ~ $40M of annual revenue and $640M of revenues acquired through Dec. 31), continued dispositions (13 dealerships/32 franchises that generated ≈$775M of annualized revenue), and ongoing buybacks (≈1.3M shares repurchased for ~$555M at an average $413.05, plus 71,750 shares for $28.3M at $394.20, with ~$350M remaining on the authorization). Operational priorities and targets include holding U.S. SG&A below pre‑COVID levels (roughly mid‑ to high‑60% of gross profit annually), targeting UK SG&A around 80% of gross profit, and driving UK improvements from restructuring (technician headcount +9.5%, RO count +36%, same‑store F&I PRU $1,060 with PRU up ~13% or ~$123) while addressing used‑vehicle GPU pressures (U.S. used revenues +~41% year‑over‑year but used GPUs down ~8% same‑store) and modest F&I GPU growth (≈3%, or roughly $65–$67).Group 1 Automotive Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
60
Neutral
Cash Flow
64
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 22.57B | 19.93B | 17.87B | 16.22B | 13.48B |
| Gross Profit | 3.50B | 3.24B | 3.02B | 2.97B | 2.44B |
| EBITDA | 855.40M | 1.02B | 1.06B | 1.18B | 963.20M |
| Net Income | 321.50M | 498.20M | 601.60M | 751.50M | 552.10M |
Balance Sheet | |||||
| Total Assets | 10.35B | 9.82B | 7.77B | 6.72B | 5.75B |
| Cash, Cash Equivalents and Short-Term Investments | 32.50M | 34.40M | 57.20M | 47.90M | 14.90M |
| Total Debt | 5.87B | 5.24B | 3.89B | 3.35B | 2.85B |
| Total Liabilities | 7.56B | 6.85B | 5.10B | 4.48B | 3.92B |
| Stockholders Equity | 2.79B | 2.97B | 2.67B | 2.24B | 1.83B |
Cash Flow | |||||
| Free Cash Flow | 424.50M | 341.20M | -121.90M | 430.40M | 1.12B |
| Operating Cash Flow | 694.50M | 586.30M | 63.50M | 585.90M | 1.26B |
| Investing Cash Flow | -671.30M | -1.28B | -366.10M | -484.60M | -1.25B |
| Financing Cash Flow | -31.10M | 681.10M | 311.90M | -67.30M | -74.00M |
Group 1 Automotive Technical Analysis
Positive
338.02
Price Trends
328.15
Positive
364.16
Negative
400.10
Negative
Market Momentum
2.35
Negative
59.58
Neutral
65.33
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 338.02 is above the 20-day moving average (MA) of 324.07, above the 50-day MA of 328.15, and below the 200-day MA of 400.10, indicating a neutral trend. The MACD of 2.35 indicates Negative momentum. The RSI at 59.58 is Neutral, neither overbought nor oversold. The STOCH value of 65.33 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 24 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 |
|---|---|---|---|---|---|---|---|
62 Neutral | $4.01B | 15.78 | 10.85% | 0.49% | 19.45% | -24.27% | |
62 Neutral | $3.94B | 9.17 | 9.29% | ― | 8.07% | 60.95% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $6.62B | 23.09 | 7.39% | ― | 0.12% | 2.78% | |
61 Neutral | $6.36B | 10.30 | 12.08% | 0.64% | 8.56% | 17.84% | |
58 Neutral | $6.96B | 12.12 | 26.70% | ― | 6.06% | -1.71% | |
56 Neutral | $2.28B | 11.15 | 11.15% | 2.27% | 9.09% | -33.59% |
* Consumer Cyclical Sector Average
GPI
Group 1 Automotive
338.02
-55.18
-14.03%
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Group 1 Automotive Corporate Events
Executive/Board ChangesRegulatory Filings and Compliance
Group 1 Automotive Updates Executive Severance Incentive Agreement
Neutral
Mar 3, 2026
On March 2, 2026, Group 1 Automotive, Inc. amended the incentive agreement of executive Daryl Kenningham, restructuring his severance benefits while keeping all other terms unchanged. The updated terms increase cash severance and extend health cov...
Dividends
Group 1 Automotive Raises 2026 Annual Dividend Payout
Positive
Feb 11, 2026
On February 11, 2026, Group 1 Automotive announced that its board of directors approved an increase in the 2026 annual dividend rate to $2.20 per share, up 10% from the 2025 rate of $2.00. The board also declared a quarterly cash dividend of $0.55...
Financial Disclosures
Group 1 Automotive Schedules Q4 and Full-Year Results
Neutral
Jan 15, 2026
On January 14, 2026, Group 1 Automotive announced it would release its financial results for the fourth quarter and full year ended December 31, 2025, before the U.S. market opens on January 29, 2026, followed by a management-hosted conference cal...
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.