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Group 1 Automotive (GPI)
NYSE:GPI
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Group 1 Automotive
(NYSE:GPI)
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Rating:75Outperform
Price Target:
$502.00
▲(10.59% Upside)
Group 1 Automotive's strong financial performance and strategic growth initiatives are the primary drivers of its stock score. While the company faces some macroeconomic challenges, particularly in the U.K., its robust U.S. market performance and strategic acquisitions provide a solid foundation for future growth. Technical indicators suggest positive momentum, though caution is advised due to potential overbought conditions.
Positive Factors
Revenue Growth
Record revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion and profitability.
Strategic Acquisitions
Strategic acquisitions enhance market presence and revenue streams, strengthening competitive positioning in the luxury automotive segment.
Financial Flexibility
Expanded credit facility provides financial flexibility for strategic investments and operations, supporting long-term growth and stability.
Negative Factors
Rising SG&A Costs
Increased SG&A costs can pressure margins, reducing profitability and limiting resources for reinvestment, affecting long-term financial health.
Economic Challenges in the U.K.
Economic challenges in the U.K. can impact profitability and growth, requiring strategic adjustments to mitigate risks and sustain performance.
Tariff Concerns
Potential tariffs could increase costs and reduce margins, impacting competitive pricing and profitability in the long term.
Group 1 Automotive (GPI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.84B
Dividend Yield0.43%
Average Volume (3M)157.21K
Price to Earnings (P/E)12.6
Beta (1Y)0.81
Revenue Growth19.75%
EPS Growth-10.74%
CountryUS
Employees20,413
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)11.57
Shares Outstanding12,939,665
10 Day Avg. Volume180,785
30 Day Avg. Volume157,212
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.89
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit3.12
Enterprise Value/Ebitda10.63
Forecast
1Y Price Target
$490.50Price Target Upside8.06% 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. 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 Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
Group 1 Automotive demonstrated strong financial performance with record revenues and growth across key segments in the U.S. Despite economic challenges in the U.K., the company managed to achieve growth. However, there are concerns about macroeconomic factors, particularly in the U.K., and potential tariff impacts. The company remains cautious but optimistic about leveraging technology and acquisitions for future growth.Q2-2025 Updates
Positive Updates
Record Financial Performance
Group 1 Automotive reported quarterly record revenues of $5.7 billion and quarterly record gross profit of $936 million. Adjusted net income from continuing operations improved 12.4%, and EPS improved 17.5%.
Strong U.S. Market Performance
New car sales were up 6% on a same-store basis, outpacing the industry. Used car volumes were up nearly 4% year-over-year. Aftersales gross profit was up 14.3%, with customer pay revenue up 13.6% and warranty up 31.9%.
Expansion and Investment
Group 1 acquired 3 dealerships, expanding its presence with Mercedes-Benz, Lexus, and Acura. Technician headcount increased by 6% in the U.S., with a focus on improving productivity and customer experience.
U.K. Business Growth
Despite economic challenges, the U.K. business saw double-digit growth in gross profit on a same-store basis for used vehicles, parts and services, and F&I. The opening of a new U.K. headquarters in Milton Keynes was a major milestone.
Negative Updates
Economic Challenges in the U.K.
The U.K. market faced macroeconomic challenges, including weak economic growth and inflation levels exceeding expectations. There was a drag on gross profits due to government-imposed costs for insurance and wages.
SG&A Cost Increases
In the U.K., the SG&A percentage of gross rose to 84.3% due to the absence of a plate change and increased government costs. Adjusted SG&A as a percent of gross profit increased 216 basis points versus the prior year quarter.
Tariff Concerns
There are concerns about potential tariffs affecting new and used vehicle GPUs, which could elevate as inventories tighten. The company has contingency plans and is cautious about the competitive environment.
Company Guidance
During the second quarter of 2025, Group 1 Automotive reported impressive financial metrics, with a 12.4% improvement in adjusted net income and a 17.5% increase in EPS from continuing operations. New car sales in the U.S. rose by 6% on a same-store basis, while used car volumes increased nearly 4% year-over-year, contributing to a $29 rise in gross profits. Additionally, aftersales gross profit surged by 14.3%, with customer pay revenue and warranty revenue climbing 13.6% and 31.9%, respectively. The U.K. operations also demonstrated resilience, with used vehicle volumes and F&I PRU growing by 8% and 27%, respectively. On a broader scale, Group 1's quarterly revenues hit a record $5.7 billion, with gross profits reaching $936 million, despite challenges such as increased government-imposed costs in the U.K. The company remains cautious about the future, particularly in response to potential inventory constraints and economic uncertainties, but continues to focus on operational agility and strategic investments.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.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
Positive
453.93
Price Trends
445.70
Positive
441.55
Positive
433.52
Positive
Market Momentum
1.19
Positive
46.45
Neutral
12.95
Positive
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 453.93 is below the 20-day moving average (MA) of 468.19, above the 50-day MA of 445.70, and above the 200-day MA of 433.52, indicating a neutral trend. The MACD of 1.19 indicates Positive momentum. The RSI at 46.45 is Neutral, neither overbought nor oversold. The STOCH value of 12.95 is Positive, 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 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
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $5.84B | 12.64 | 15.72% | 0.43% | 19.75% | -10.74% | |
74 Outperform | 4.71B | 8.85 | 14.30% | ― | 8.39% | 40.35% | |
73 Outperform | 11.50B | 12.13 | 17.04% | 2.86% | 2.39% | 5.84% | |
73 Outperform | 8.54B | 9.86 | 12.75% | 0.65% | 10.25% | 9.08% | |
71 Outperform | 2.68B | 17.49 | 20.33% | 1.81% | 4.48% | -16.26% | |
70 Outperform | 8.27B | 13.81 | 25.67% | ― | 3.15% | -12.49% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
Performance Comparison
GPI
Group 1 Automotive
453.93
70.79
18.48%
ABG
Asbury
242.35
12.11
5.26%
AN
AutoNation
220.41
41.91
23.48%
KMX
CarMax
57.60
-18.90
-24.71%
LAD
Lithia Motors
334.21
22.27
7.14%
SAH
Sonic Automotive
78.89
22.61
40.17%
Group 1 Automotive Corporate Events
Executive/Board ChangesStock BuybackDividends
Group 1 Automotive Appoints New HR Chief
Positive
Aug 13, 2025
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.
M&A TransactionsBusiness Operations and Strategy
Group 1 Automotive Acquires Mercedes-Benz Dealership in Atlanta
Positive
Aug 5, 2025
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.
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.
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.
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.
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.