NYSE:GPI

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 46.4% below its fair value

Earnings are forecast to grow 12.21% per year

Risk Analysis

Interest payments are not well covered by earnings

Profit margins (1.3%) are lower than last year (2%)



Snowflake Analysis

Good value with questionable 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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.0%

GPI

0.6%

US Specialty Retail

-0.09%

US Market


1 Year Return

73.2%

GPI

23.3%

US Specialty Retail

23.9%

US Market

Return vs Industry: GPI exceeded the US Specialty Retail industry which returned 23.7% over the past year.

Return vs Market: GPI exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

GPIIndustryMarket
7 Day2.0%0.6%-0.09%
30 Day2.7%1.1%3.1%
90 Day2.0%6.8%10.4%
1 Year75.6%73.2%25.3%23.3%26.6%23.9%
3 Year35.7%29.9%46.3%38.8%50.9%41.2%
5 Year35.0%26.0%49.3%36.6%78.1%58.5%

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?

45.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: GPI ($100.35) is trading below our estimate of fair value ($187.3)

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 (12x) compared to the Specialty Retail industry average (17.1x).

PE vs Market: GPI is good value based on its PE Ratio (12x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: GPI is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: GPI is overvalued based on its PB Ratio (1.5x) compared to the US Specialty Retail industry average (1.5x).


Next Steps

Future Growth

How is Group 1 Automotive forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

11.4%

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 (14.3% per year).

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

Revenue vs Market: GPI's revenue (1.8% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: GPI's revenue (1.8% per year) is forecast to grow slower than 20% 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 (15.2%).


Next Steps

Past Performance

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

14.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GPI has high quality earnings.

Growing Profit Margin: GPI's current net profit margins (1.3%) are lower than last year (2%).


Past Earnings Growth Analysis

Earnings Trend: GPI's earnings have grown by 14.8% per year over the past 5 years.

Accelerating Growth: GPI's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: GPI had negative earnings growth (-34.3%) over the past year, making it difficult to compare to the Specialty Retail industry average (4.5%).


Return on Equity

High ROE: GPI's Return on Equity (13.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Group 1 Automotive's financial position?


Financial Position Analysis

Short Term Liabilities: GPI's short term assets ($2.4B) do not cover its short term liabilities ($2.4B).

Long Term Liabilities: GPI's short term assets ($2.4B) exceed its long term liabilities ($1.7B).


Debt to Equity History and Analysis

Debt Level: GPI's debt to equity ratio (247.2%) is considered high.

Reducing Debt: GPI's debt to equity ratio has increased from 234.8% to 247.2% over the past 5 years.

Debt Coverage: GPI's debt is not well covered by operating cash flow (7.6%).

Interest Coverage: GPI's interest payments on its debt are not well covered by EBIT (2.8x 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?

1.12%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years1.1%

Current dividend yield vs market & industry

Notable Dividend: GPI's dividend (1.16%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: GPI's dividend (1.16%) is low compared to the top 25% of dividend payers in the US market (3.66%).


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 (13%), 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 (9.3% payout ratio).


Next Steps

Management

What is the CEO of Group 1 Automotive's salary, the management and board of directors tenure and is there insider trading?

13.9yrs

Average management tenure


CEO

Earl Hesterberg (65yo)

14.8yrs

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 ($USD6.90M) is above average for companies of similar size in the US market ($USD3.86M).

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


Management Age and Tenure

13.9yrs

Average Tenure

59.5yo

Average Age

Experienced Management: GPI's management team is seasoned and experienced (13.9 years average tenure).


Board Age and Tenure

4.3yrs

Average Tenure

62.5yo

Average Age

Experienced Board: GPI's board of directors are considered experienced (4.3 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$1,034,26409 Dec 19
Lincoln da Cunha Pereira Filho
EntityIndividual
Role
Member of the Board of Directors
Regional Vice President of Brazil & Director
Shares10,000
Max PriceUS$103.43
SellUS$1,514,40009 Dec 19
John Rickel
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares15,000
Max PriceUS$100.96
SellUS$3,055,97505 Dec 19
Lincoln da Cunha Pereira Filho
EntityIndividual
Role
Member of the Board of Directors
Regional Vice President of Brazil & Director
Shares30,000
Max PriceUS$102.59
SellUS$301,93504 Nov 19
Frank Grese
EntityIndividual
Role
Head of Human Resources
Senior Vice President of Human Resources
Shares2,940
Max PriceUS$102.70
SellUS$1,020,99831 Oct 19
Earl Hesterberg
EntityIndividual
Role
Chief Executive Officer
President
Shares9,998
Max PriceUS$102.24
SellUS$2,368,65530 Oct 19
John Rickel
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares22,740
Max PriceUS$104.29
SellUS$1,034,72030 Oct 19
Max Watson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceUS$103.47
SellUS$1,520,75830 Oct 19
Darryl Burman
EntityIndividual
Role
Chief Legal Officer
Senior VP & General Counsel
Shares14,650
Max PriceUS$103.81
SellUS$824,14726 Sep 19
John Adams
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares9,308
Max PriceUS$88.75
SellUS$882,22024 Sep 19
John Rickel
EntityIndividual
Role
Chief Financial Officer
Senior VP & CFO
Shares10,000
Max PriceUS$88.22
SellUS$880,23617 Sep 19
Darryl Burman
EntityIndividual
Role
Chief Legal Officer
Senior VP & General Counsel
Shares10,051
Max PriceUS$87.58
SellUS$887,40029 Jul 19
Peter DeLongchamps
EntityIndividual
Role
Head of Corporate Communications
Senior Vice President of Manufacturer Relations
Shares10,200
Max PriceUS$87.00
SellUS$783,40529 Jul 19
Daryl Kenningham
EntityIndividual
Role
Senior Key Executive
President of US & Brazilian Operations
Shares9,000
Max PriceUS$87.05
SellUS$392,25024 Jun 19
Frank Grese
EntityIndividual
Role
Head of Human Resources
Senior Vice President of Human Resources
Shares5,000
Max PriceUS$78.45
SellUS$194,41001 May 19
Michael Jones
EntityIndividual
Shares2,500
Max PriceUS$77.76

Ownership Breakdown

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


Management Team

  • Earl Hesterberg (65yo)

    President

    • Tenure: 14.8yrs
    • Compensation: US$6.90m
  • Pete DeLongchamps (58yo)

    Senior Vice President of Manufacturer Relations

    • Tenure: 8yrs
    • Compensation: US$1.78m
  • Darryl Burman (61yo)

    Senior VP & General Counsel

    • Tenure: 13.1yrs
    • Compensation: US$1.30m
  • John Rickel (57yo)

    Senior VP & CFO

    • Tenure: 14.1yrs
    • Compensation: US$2.58m
  • Matthew McGovern

    Chief Financial Officer of Northeast Region

    • Tenure: 13.9yrs
  • Robert Kennedy

    Chief Financial Officer of Southeast Region

    • Tenure: 13.9yrs
  • Paul Reinhart

    Chief Financial Officer of South Central Region

    • Tenure: 13.9yrs
  • Frank Grese (67yo)

    Senior Vice President of Human Resources

    • Tenure: 3.9yrs
    • Compensation: US$2.14m
  • Daryl Kenningham (55yo)

    President of US & Brazilian Operations

    • Tenure: 2.7yrs
    • Compensation: US$2.60m
  • Sheila Roth

    Manager of Investor Relations


    Board Members

    • Max Watson (73yo)

      Independent Director

      • Tenure: 18.7yrs
      • Compensation: US$267.60k
    • Earl Hesterberg (65yo)

      President

      • Tenure: 14.8yrs
      • Compensation: US$6.90m
    • Charlie Szews (62yo)

      Independent Director

      • Tenure: 3.2yrs
      • Compensation: US$254.10k
    • John Adams (74yo)

      Independent Director

      • Tenure: 20.2yrs
      • Compensation: US$412.26k
    • Stephen Quinn (63yo)

      Non-Executive Chairman

      • Tenure: 2.7yrs
      • Compensation: US$496.83k
    • Carin Barth (56yo)

      Independent Director

      • Tenure: 2.9yrs
      • Compensation: US$269.76k
    • Steven Stanbrook (62yo)

      Director

      • Tenure: 0.4yrs
    • Lincoln da Cunha Pereira Filho (59yo)

      Regional Vice President of Brazil & Director

      • Tenure: 6.9yrs
    • Anne Taylor (63yo)

      Independent Director

      • Tenure: 1.3yrs
      • Compensation: US$81.50k
    • MaryAnn Wright (57yo)

      Independent Director

      • Tenure: 5.4yrs
      • Compensation: US$252.61k

    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$1.862b
    • Shares outstanding: 17.91m
    • 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 has operations primarily in the metropolitan areas in Alabama, California, Florida, Georgia, Kansas, Louisiana, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, Oklahoma, South Carolina, and Texas in the United States; 32 towns in the United Kingdom; and metropolitan markets in the states of Sao Paulo, Parana, Mato Grosso do Sul, and Santa Catarina, Brazil. As of December 9, 2019, 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 Analysis2020/01/23 23:37
    End of Day Share Price2020/01/23 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    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.