NYSE:GPI

Stock Analysis Report

Executive Summary

Group 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry.


Snowflake Analysis

Very undervalued with proven track record.


Similar Companies

Share Price & News

How has Group 1 Automotive's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GPI's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-23.1%

GPI

-9.6%

US Specialty Retail

-4.1%

US Market


1 Year Return

-47.3%

GPI

-31.6%

US Specialty Retail

-14.9%

US Market

Return vs Industry: GPI underperformed the US Specialty Retail industry which returned -29.6% over the past year.

Return vs Market: GPI underperformed the US Market which returned -13.6% over the past year.


Shareholder returns

GPIIndustryMarket
7 Day-23.1%-9.6%-4.1%
30 Day-58.3%-30.3%-19.1%
90 Day-64.0%-36.2%-23.4%
1 Year-46.6%-47.3%-30.6%-31.6%-13.2%-14.9%
3 Year-43.8%-46.3%-6.6%-11.2%10.7%3.5%
5 Year-55.8%-58.7%-7.0%-14.3%28.5%14.5%

Price Volatility Vs. Market

How volatile is Group 1 Automotive's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Group 1 Automotive undervalued compared to its fair value and its price relative to the market?

48.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GPI ($37.98) is trading below our estimate of fair value ($68.65)

Significantly Below Fair Value: GPI is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: GPI is good value based on its PE Ratio (4.1x) compared to the Specialty Retail industry average (7.2x).

PE vs Market: GPI is good value based on its PE Ratio (4.1x) compared to the US market (12.9x).


Price to Earnings Growth Ratio

PEG Ratio: GPI is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: GPI is good value based on its PB Ratio (0.5x) compared to the US Specialty Retail industry average (0.8x).


Next Steps

Future Growth

How is Group 1 Automotive forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

12.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GPI's forecast earnings growth (12.2% per year) is above the savings rate (1.7%).

Earnings vs Market: GPI's earnings (12.2% per year) are forecast to grow slower than the US market (12.3% per year).

High Growth Earnings: GPI's earnings are forecast to grow, but not significantly.

Revenue vs Market: GPI's revenue is expected to decline over the next 3 years (-0.1% per year).

High Growth Revenue: GPI's revenue is forecast to decline over the next 3 years (-0.1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GPI's Return on Equity is forecast to be low in 3 years time (11.1%).


Next Steps

Past Performance

How has Group 1 Automotive performed over the past 5 years?

13.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GPI has high quality earnings.

Growing Profit Margin: GPI's current net profit margins (1.4%) are higher than last year (1.3%).


Past Earnings Growth Analysis

Earnings Trend: GPI's earnings have grown by 13.6% per year over the past 5 years.

Accelerating Growth: GPI's earnings growth over the past year (10%) is below its 5-year average (13.6% per year).

Earnings vs Industry: GPI earnings growth over the past year (10%) exceeded the Specialty Retail industry 6.9%.


Return on Equity

High ROE: GPI's Return on Equity (13.9%) is considered low.


Next Steps

Financial Health

How is Group 1 Automotive's financial position?


Financial Position Analysis

Short Term Liabilities: GPI's short term assets ($2.5B) exceed its short term liabilities ($2.4B).

Long Term Liabilities: GPI's short term assets ($2.5B) exceed its long term liabilities ($1.9B).


Debt to Equity History and Analysis

Debt Level: GPI's debt to equity ratio (240.5%) is considered high.

Reducing Debt: GPI's debt to equity ratio has reduced from 255.2% to 240.5% over the past 5 years.

Debt Coverage: GPI's debt is not well covered by operating cash flow (12.3%).

Interest Coverage: GPI's interest payments on its debt are not well covered by EBIT (3x coverage).


Balance Sheet

Inventory Level: GPI has a high level of physical assets or inventory.

Debt Coverage by Assets: GPI's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is Group 1 Automotive's current dividend yield, its reliability and sustainability?

3.36%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: GPI's dividend (3.16%) is higher than the bottom 25% of dividend payers in the US market (2%).

High Dividend: GPI's dividend (3.16%) is low compared to the top 25% of dividend payers in the US market (5.56%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, GPI has been paying a dividend for less than 10 years.

Growing Dividend: GPI's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (12.1%), GPI's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GPI's dividends in 3 years are forecast to be thoroughly covered by earnings (11.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

14.2yrs

Average management tenure


CEO

Earl Hesterberg (65yo)

15s

Tenure

US$6,903,654

Compensation

Mr. Earl J. Hesterberg, Jr., has been the President and Chief Executive Officer of Group 1 Automotive Inc. since April 9, 2005. Mr. Hesterberg served as a Group Vice President of North America Marketing, S ...


CEO Compensation Analysis

Compensation vs Market: Earl's total compensation ($USD6.90M) is above average for companies of similar size in the US market ($USD3.20M).

Compensation vs Earnings: Earl's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Earl Hesterberg
President15yrsUS$6.90m1.66% $10.5m
John Rickel
Senior VP & CFO14.33yrsUS$2.58m0.53% $3.3m
Peter DeLongchamps
Senior Vice President of Manufacturer Relations8.25yrsUS$1.78m0.25% $1.6m
Frank Grese
Senior Vice President of Human Resources4.17yrsUS$2.14m0.20% $1.2m
Daryl Kenningham
President of US & Brazilian Operations2.92yrsUS$2.60m0.35% $2.2m
Sheila Roth
Manager of Investor Relationsno datano datano data
Darryl Burman
Senior VP & General Counsel13.33yrsUS$1.30m0.24% $1.5m
Matthew McGovern
Chief Financial Officer of Northeast Region14.17yrsno datano data
Robert Kennedy
Chief Financial Officer of Southeast Region14.17yrsno datano data
Paul Reinhart
Chief Financial Officer of South Central Region14.17yrsno datano data

14.2yrs

Average Tenure

59.5yo

Average Age

Experienced Management: GPI's management team is seasoned and experienced (14.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Earl Hesterberg
President15yrsUS$6.90m1.66% $10.5m
Lincoln da Cunha Pereira Filho
Regional Vice President of Brazil & Director7.17yrsno data1.2% $7.6m
Max Watson
Independent Director18.92yrsUS$267.60k0.29% $1.8m
Charles Szews
Independent Director3.42yrsUS$254.10k0.061% $387.8k
John Adams
Independent Director20.42yrsUS$412.26k0.32% $2.0m
Stephen Quinn
Non-Executive Chairman2.92yrsUS$496.83k0.27% $1.7m
Carin Barth
Independent Director3.17yrsUS$269.76k0.047% $297.2k
Steven Stanbrook
Director0.67yrno data0.016% $103.9k
Mary Wright
Independent Director5.67yrsUS$252.61k0.067% $423.3k
Anne Taylor
Independent Director1.58yrsUS$81.50k0.025% $155.9k

4.5yrs

Average Tenure

62.5yo

Average Age

Experienced Board: GPI's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: GPI insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Group 1 Automotive, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Group 1 Automotive, Inc.
  • Ticker: GPI
  • Exchange: NYSE
  • Founded: 1995
  • Industry: Automotive Retail
  • Sector: Retail
  • Market Cap: US$631.364m
  • Shares outstanding: 17.70m
  • Website: https://www.group1auto.com

Number of Employees


Location

  • Group 1 Automotive, Inc.
  • 800 Gessner
  • Suite 500
  • Houston
  • Texas
  • 77024
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GPINYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1997
GAVDB (Deutsche Boerse AG)YesCommon StockDEEUROct 1997

Biography

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 insurance contracts; arranges related vehicle financing; and offers automotive maintenance and repair services. It operates primarily in the metropolitan areas in 15 states in the United States; 33 towns in the United Kingdom; and 3 states in Brazil. As of February 5, 2020, the company owned and operated 186 automotive dealerships, 242 franchises, and 49 collision centers that offer 31 brands of automobiles. Group 1 Automotive, Inc. was founded in 1995 and is headquartered in Houston, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/04 00:26
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.