Group 1 Automotive (NYSE:GPI) Announces Quarterly Earnings Results, Misses Expectations By $0.14 EPS

Group 1 Automotive (NYSE:GPI) released its quarterly earnings data on Wednesday. The company reported $9.36 EPS for the quarter, missing the consensus estimate of $9.50 by ($0.14), FiscalAI reports. The business had revenue of $5.40 billion during the quarter, compared to the consensus estimate of $5.58 billion. Group 1 Automotive had a return on equity of 15.18% and a net margin of 1.75%. Group 1 Automotive’s quarterly revenue was down 6.7% compared to the same quarter last year. During the same quarter in the previous year, the business posted $10.45 earnings per share.

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

• Q3 results reflected a challenging market: Revenue was $5.4 billion, adjusted net income was $112 million, and adjusted diluted EPS was $9.36. U.S. new-vehicle same-store sales fell 4.6%, while new-vehicle gross profit per unit declined sequentially to $3,084.
• Aftersales remained a key stabilizer. U.S. same-store customer-pay revenue rose about 3%, repair-order count increased more than 4%, and technician productivity improved 7.2%, supported by affordability initiatives, service financing, and the OneCare maintenance plan.
• The Hennessy acquisition expanded Group 1’s premium-market footprint. The recently closed deal adds 10 dealerships, approximately $1.7 billion in annualized revenue, 500 service bays, and a portfolio that is about 75% luxury; management expects the acquisition and planned dispositions to lift adjusted EBITDA margin by roughly 30 basis points.
• U.K. operations showed improved momentum: Same-store new-vehicle sales increased 8%, new-vehicle gross profit per unit rose 4%, used-vehicle gross profit per unit grew 14%, and parts-and-service revenue increased 7% in local currency.
• Leverage and weak U.S. used-vehicle volumes remain concerns. U.S. used-vehicle same-store sales declined 10%, the pro forma rent-adjusted leverage ratio would be about 4 times, and management expects to prioritize debt reduction until leverage returns to approximately 3 times by mid-to-late 2027, delaying share repurchases.

Group 1 Automotive Trading Up 3.8%

Group 1 Automotive stock opened at $258.99 on Friday. The stock has a market cap of $3.09 billion, a P/E ratio of 8.20, a PEG ratio of 1.53 and a beta of 0.92. The company has a debt-to-equity ratio of 1.03, a current ratio of 1.02 and a quick ratio of 0.25. Group 1 Automotive has a 1 year low of $224.65 and a 1 year high of $429.00. The firm’s 50 day moving average price is $254.68 and its 200-day moving average price is $308.12.

Group 1 Automotive Dividend Announcement

The firm also recently disclosed a quarterly dividend, which was paid on Tuesday, September 15th. Stockholders of record on Tuesday, September 1st were paid a $0.55 dividend. The ex-dividend date of this dividend was Tuesday, September 1st. This represents a $2.20 dividend on an annualized basis and a dividend yield of 0.8%. Group 1 Automotive’s dividend payout ratio is 6.96%.

Wall Street Analysts Forecast Growth

A number of analysts have recently commented on GPI shares. Barclays reduced their price target on shares of Group 1 Automotive from $365.00 to $320.00 and set an “overweight” rating for the company in a research note on Tuesday, October 6th. Benchmark restated a “buy” rating on shares of Group 1 Automotive in a research report on Friday, July 10th. Zacks Research downgraded shares of Group 1 Automotive from a “hold” rating to a “strong sell” rating in a research report on Monday, August 10th. Citigroup dropped their target price on shares of Group 1 Automotive from $387.00 to $357.00 and set a “buy” rating on the stock in a report on Monday, September 28th. Finally, Seaport Research Partners set a $420.00 target price on shares of Group 1 Automotive in a research report on Monday, August 3rd. Five investment analysts have rated the stock with a Buy rating, two have assigned a Hold rating and three have given a Sell rating to the company. According to MarketBeat.com, Group 1 Automotive currently has a consensus rating of “Hold” and an average price target of $340.33.

Insider Buying and Selling at Group 1 Automotive

In other Group 1 Automotive news, SVP Gillian A. Hobson sold 2,000 shares of the stock in a transaction dated Thursday, October 29th. The shares were sold at an average price of $258.24, for a total transaction of $516,480.00. Following the completion of the transaction, the senior vice president owned 7,543 shares of the company’s stock, valued at $1,947,904.32. This represents a 20.96% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, major shareholder Conifer Management, L.L.C. acquired 20,471 shares of the company’s stock in a transaction on Monday, October 26th. The shares were bought at an average cost of $246.14 per share, with a total value of $5,038,731.94. Following the acquisition, the insider directly owned 2,012,290 shares in the company, valued at approximately $495,305,060.60. The trade was a 1.03% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. In the last quarter, insiders acquired 820,030 shares of company stock worth $211,496,571. Corporate insiders own 2.40% of the company’s stock.

Group 1 Automotive News Summary

Here are the key news stories impacting Group 1 Automotive this week:

• Positive Sentiment: Investors are refocusing on Group 1 Automotive’s potentially undervalued valuation following the Q3 report. The company remains profitable, and its earnings multiple is relatively modest, which could support the stock if operating conditions stabilize. Group 1 Automotive Q3 Results Put Its Undervalued Narrative Back In Focus
• Positive Sentiment: Recent purchases by Conifer Management, totaling 79,529 shares across two reported transactions, signal that an investment holder sees value in GPI despite near-term earnings weakness. Conifer Management Buys 34,529 Shares
• Neutral Sentiment: UBS lowered its price target from $271 to $259 and maintained a neutral rating, indicating limited expected upside based on current valuation. UBS Group Stock Recommendations
• Negative Sentiment: Third-quarter adjusted earnings of $9.36 per share missed analysts’ estimates, while revenue of $5.40 billion fell short of the roughly $5.58 billion consensus and declined 6.7% year over year. EPS also dropped from $10.45 in the prior-year quarter. Group 1 Automotive Q3 Earnings and Revenues Miss Estimates
• Negative Sentiment: Management’s earnings-call commentary highlighted continued growth opportunities but also strain on margins, a concern for an auto retailer operating with a net margin of just 1.31%. Group 1 Automotive Earnings Call Highlights Growth Amid Strain
• Negative Sentiment: Senior Vice President Gillian A. Hobson sold 2,000 shares for approximately $516,480, reducing her direct ownership by about 21%. Although not necessarily a broader management signal, the sale adds a modest negative headline. Group 1 Automotive Insider Sold Shares Worth $516,480

About Group 1 Automotive

Group 1 Automotive, Inc is an international automotive retailer headquartered in Houston, Texas. The company operates dealerships that sell new and used automobiles and light trucks from a broad range of manufacturers.

In addition to vehicle sales, Group 1 Automotive provides automotive financing and insurance products, vehicle maintenance and repair, collision services, replacement parts, and other related services. Its dealerships also market vehicles through digital retailing platforms.

Founded in 1997, Group 1 Automotive serves customers through a network of dealerships and automotive service locations in the United States, the United Kingdom, and Brazil.