Group 1 Automotive (NYSE:GPI) Releases Quarterly Earnings Results, Misses Estimates By $2.32 EPS

Group 1 Automotive (NYSE:GPI) announced its quarterly earnings results on Thursday. The company reported $8.66 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $10.98 by ($2.32), FiscalAI reports. Group 1 Automotive had a return on equity of 17.39% and a net margin of 1.44%.The firm had revenue of $5.41 billion during the quarter, compared to the consensus estimate of $5.82 billion. During the same quarter in the previous year, the firm earned $10.17 EPS. The business’s revenue for the quarter was down 1.8% on a year-over-year basis.

Here are the key takeaways from Group 1 Automotive’s conference call:

• Reported Q1 results of $5.4 billion revenue, $878 million gross profit, $104 million adjusted net income, and $8.66 adjusted diluted EPS, indicating resilience across the business despite challenging conditions.
• Implemented U.S. cost actions—nearly 700 headcount reductions plus contract/vendor cuts—to deliver about $50 million of annualized savings (roughly $12.5M per quarter), with benefits beginning in Q2 to restore SG&A leverage.
• After-sales and F&I are key bright spots—U.S. same-store customer-pay gross profit rose ~6%, U.K. parts & service same-store gross profit grew ~20%, and virtual F&I (in ~1/3 of U.S. stores, doing 20% of deals) is improving PRUs, speed and F&I productivity.
• Used-vehicle profitability is under pressure—same-store GPUs declined ~3% as sourcing is constrained, inventory mix is light on lower-cost higher-margin late-model trade-ins (days’ supply ~26), and rising negative equity is a headwind to conversions.
• Disciplined capital allocation continues—disposed of underperforming/high-cost stores, completed targeted U.K. acquisitions and a Geely framework (three Geely dealerships to open in Q2), and repurchased ~205k shares (~1.7%) with ~$306M remaining on the buyback program.

Group 1 Automotive Stock Performance

Shares of GPI traded up $7.06 on Thursday, reaching $356.27. The company’s stock had a trading volume of 305,694 shares, compared to its average volume of 176,573. The stock’s 50 day simple moving average is $328.17 and its two-hundred day simple moving average is $371.32. The company has a debt-to-equity ratio of 1.23, a current ratio of 1.08 and a quick ratio of 0.27. The stock has a market capitalization of $4.23 billion, a P/E ratio of 14.25, a PEG ratio of 0.82 and a beta of 0.88. Group 1 Automotive has a 12-month low of $292.44 and a 12-month high of $488.39.

Group 1 Automotive Increases Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Monday, March 16th. Investors of record on Monday, March 2nd were issued a $0.55 dividend. The ex-dividend date of this dividend was Monday, March 2nd. This is a positive change from Group 1 Automotive’s previous quarterly dividend of $0.50. This represents a $2.20 dividend on an annualized basis and a dividend yield of 0.6%. Group 1 Automotive’s payout ratio is 8.80%.

Hedge Funds Weigh In On Group 1 Automotive

Several institutional investors and hedge funds have recently bought and sold shares of GPI. Dimensional Fund Advisors LP lifted its position in shares of Group 1 Automotive by 3.9% during the 4th quarter. Dimensional Fund Advisors LP now owns 678,316 shares of the company’s stock valued at $266,788,000 after buying an additional 25,209 shares in the last quarter. State Street Corp raised its stake in Group 1 Automotive by 1.5% during the 4th quarter. State Street Corp now owns 505,108 shares of the company’s stock worth $198,659,000 after acquiring an additional 7,418 shares during the period. Invesco Ltd. lifted its holdings in Group 1 Automotive by 5.2% during the fourth quarter. Invesco Ltd. now owns 151,578 shares of the company’s stock valued at $59,616,000 after purchasing an additional 7,501 shares in the last quarter. Boston Partners boosted its position in shares of Group 1 Automotive by 8.6% in the fourth quarter. Boston Partners now owns 123,531 shares of the company’s stock worth $48,690,000 after purchasing an additional 9,828 shares during the period. Finally, Wellington Management Group LLP boosted its position in shares of Group 1 Automotive by 12.9% in the third quarter. Wellington Management Group LLP now owns 111,590 shares of the company’s stock worth $48,822,000 after purchasing an additional 12,779 shares during the period. 99.92% of the stock is currently owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

Several brokerages have issued reports on GPI. Benchmark raised shares of Group 1 Automotive from a “hold” rating to a “buy” rating and set a $425.00 target price for the company in a report on Monday, March 30th. Citigroup reduced their price target on shares of Group 1 Automotive from $490.00 to $420.00 and set a “buy” rating for the company in a research report on Wednesday, April 8th. Barclays lowered their price target on Group 1 Automotive from $470.00 to $455.00 and set an “overweight” rating on the stock in a report on Tuesday, April 7th. JPMorgan Chase & Co. boosted their price objective on shares of Group 1 Automotive from $370.00 to $385.00 and gave the company an “overweight” rating in a report on Friday, April 17th. Finally, Evercore began coverage on shares of Group 1 Automotive in a research report on Tuesday, January 20th. They set an “outperform” rating and a $500.00 price objective on the stock. Seven research analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $447.14.

Group 1 Automotive Company Profile

Group 1 Automotive, Inc (NYSE: GPI) is an international automotive retailer headquartered in Houston, Texas. The company operates an extensive network of franchised dealerships, offering new and pre-owned vehicles from leading domestic and import manufacturers. In addition to vehicle sales, Group 1 Automotive provides a full complement of aftersales services, including finance and insurance products, parts distribution, collision repair centers and vehicle maintenance.

Founded in 1997, Group 1 Automotive has grown through both organic expansion and strategic acquisitions to establish a presence across the United States, the United Kingdom and Brazil.