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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on GPI

Group 1 Automotive's recent performance was negatively impacted by its Q3 earnings miss, with earnings of $10.45 per share, falling short of the Zacks Consensus Estimate of $10.64 per share. Despite strong revenue gains across new, used, and service segments, profitability was mixed, with rising costs outpacing revenue gains. Additionally, Allspring Global Investments Holdings LLC reduced its stake in the company by 5.4%, selling 139 shares. JPMorgan raised its price target to $435 but maintains a Neutral rating, citing electrical vehicle mix and UK headwinds.

1.c. Company Highlights

2. Group 1 Automotive's 2025 Earnings Report: A Strong Performance Amidst Challenges

Group 1 Automotive, Inc. reported revenues of $5.6 billion in 2025, with adjusted diluted EPS of $8.49 from continuing operations, missing analyst estimates of $9.36. The company's gross profit reached an all-time high of more than $3.6 billion, including record parts and service gross profit of nearly $1.6 billion. The strong financial performance was driven by record revenues across all major business lines and growth in gross profits in parts, service, and F&I.

Publication Date: Feb -09

📋 Highlights
  • Record Full-Year Gross Profit: Achieved $3.6 billion in gross profit, with parts/service at $1.6 billion and F&I GPUs up 3% ($67-$65 growth).
  • Vehicle Sales Milestone: Sold 459,000 new/used vehicles in 2025, driven by strong U.S. used volumes and UK used revenue growth of 9% (local currency).
  • U.S. Operational Resilience: Delivered $874 million gross profit and $8.49 adjusted diluted EPS, with aftersales revenues from warranty up 511% and gross profits up 813%.
  • UK Restructuring Progress: Cut 537 headcount in 2025, reduced SG&A costs, and deployed $555 million in share buybacks (1.3M shares at $413 avg.) and $26M dividends.
  • Liquidity & Capital Deployment: Maintained $883 million liquidity ($537M cash + $346M borrowing capacity) and acquired $640M in revenue-generating assets by year-end.

Segment Performance

In the U.S., the company's fourth-quarter performance was strong across all lines of business, with a slight decline in new vehicle sales. Used vehicle operations performed well, holding volumes flat versus the comparable year quarter while increasing revenues approximately 41% on an as-reported and same-store basis. F&I gross profit per unit (GPU) grew nearly 3% versus the prior year comparable period.

Restructuring Initiatives

The company has made significant progress in restructuring its UK business, reducing headcount by 537 positions in 2025 and executing targeted restructuring initiatives to improve efficiency. According to Daryl Kenningham, "there's more work to be done" in the UK, indicating that the restructuring efforts are ongoing.

Valuation Metrics

With a P/E Ratio of 13.23 and an EV/EBITDA of 9.4, the company's valuation appears reasonable. The ROE of 10.85% and ROIC of 24.79% indicate a strong return on equity and invested capital. Analysts estimate revenue growth of 3.1% for the next year, which may impact the company's valuation multiples.

Outlook

Group 1 Automotive remains committed to its strategic initiatives, focusing on operational excellence, differentiated aftersales, and disciplined capital management. The company will continue to build on its strong operating results in the U.S. and execute on restructuring initiatives in the UK to drive better returns.

3. NewsRoom

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Group 1 Automotive (NYSE:GPI) Reaches New 1-Year Low After Earnings Miss

Jan -31

Source: defenseworld.net

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Is Group 1 Automotive (GPI) a Solid Growth Stock? 3 Reasons to Think "Yes"

Jan -30

Source: zacks.com

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Group 1 Q4 Earnings Miss Estimates, Revenues Increase Y/Y

Jan -30

Source: zacks.com

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Group 1 Automotive (GPI) Loses 7.7% in 4 Weeks, Here's Why a Trend Reversal May be Around the Corner

Jan -30

Source: zacks.com

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Group 1 Automotive (NYSE:GPI) Shares Gap Down on Disappointing Earnings

Jan -30

Source: defenseworld.net

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Group 1 Automotive, Inc. (GPI) Q4 2025 Earnings Call Transcript

Jan -29

Source: seekingalpha.com

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Group 1 Automotive (GPI) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates

Jan -29

Source: zacks.com

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Group 1 Automotive (GPI) Lags Q4 Earnings and Revenue Estimates

Jan -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.32%)

6. Segments

New Vehicle Retail

Expected Growth: 7.5%

The 7.5% growth in New Vehicle Retail from Group 1 Automotive, Inc. is driven by increasing demand for electric and luxury vehicles, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on digital retailing and online sales platforms has improved customer experience, leading to higher sales conversions. Furthermore, the company's diversified brand portfolio and strong relationships with manufacturers have enabled it to capitalize on market trends and preferences.

Used Vehicle Retail

Expected Growth: 7.2%

The 7.2% growth in Used Vehicle Retail from Group 1 Automotive, Inc. is driven by increasing demand for affordable vehicles, expansion of online marketplaces, and strategic acquisitions. Additionally, the company's focus on certified pre-owned vehicles, competitive pricing, and improved customer experience have contributed to the growth.

Parts and Service

Expected Growth: 6.8%

The 6.8% growth in Parts and Service at Group 1 Automotive, Inc. is driven by increasing vehicle complexity, rising average vehicle age, and growing demand for maintenance and repair services. Additionally, the company's focus on customer retention, expanded service offerings, and strategic acquisitions have contributed to this growth.

Finance, Insurance and Other, Net

Expected Growth: 7.8%

The 7.8% growth in Finance, Insurance and Other segment of Group 1 Automotive, Inc. is driven by increased penetration of finance and insurance products, expansion of online financing platforms, and strategic partnerships with lenders, resulting in higher revenue from loan and lease originations, as well as growth in insurance premiums.

Used Vehicle Wholesale

Expected Growth: 7.0%

The 7.0% growth in Used Vehicle Wholesale from Group 1 Automotive, Inc. is driven by increasing demand for certified pre-owned vehicles, expansion of online marketplaces, and strategic partnerships with OEMs. Additionally, the company's focus on digital retailing and improved inventory management have contributed to the growth.

7. Detailed Products

New Vehicle Sales

Group 1 Automotive, Inc. sells new vehicles from various manufacturers such as Toyota, Ford, and Honda through its network of dealerships.

Used Vehicle Sales

The company sells pre-owned vehicles, including certified pre-owned vehicles, through its dealerships and online marketplaces.

Parts and Accessories

Group 1 offers a range of original equipment manufacturer (OEM) and aftermarket parts and accessories for vehicles.

Service and Repair

The company provides vehicle maintenance and repair services, including routine maintenance, repairs, and warranty work.

Financing and Insurance

Group 1 offers financing and insurance products to customers, including financing options and extended warranty programs.

Collision Repair

The company provides collision repair services, including body shop repairs and paintless dent repair.

8. Group 1 Automotive, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Group 1 Automotive, Inc. is medium due to the presence of alternative modes of transportation and the increasing popularity of ride-sharing services.

Bargaining Power Of Customers

The bargaining power of customers is high due to the availability of multiple options for car purchases and the ease of comparing prices online.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the large number of suppliers available and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the automotive industry, including the need for significant capital investment and regulatory compliance.

Intensity Of Rivalry

The intensity of rivalry is high due to the large number of competitors in the automotive industry and the ongoing price wars between dealerships.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.94%
Debt Cost 10.87%
Equity Weight 59.06%
Equity Cost 10.87%
WACC 10.87%
Leverage 69.31%

11. Quality Control: Group 1 Automotive, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Growth: 7.0

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Yield: 5.0

Momentum: 5.0

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Group 1 Automotive

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Growth: 7.8

Quality: 3.5

Yield: 0.0

Momentum: 5.0

Volatility: 6.7

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Quality: 3.7

Yield: 0.0

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Lithia Motors

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Growth: 6.7

Quality: 3.4

Yield: 1.0

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ACV Auctions

A-Score: 3.2/10

Value: 6.8

Growth: 5.4

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

334.61$

Current Price

334.61$

Potential

-0.00%

Expected Cash-Flows