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Group 1 Automotive Inc GPI Stock Quote

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Morningstar‘s Stock Analysis GPI

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Group 1's Second Quarter Is a Record, and Shares Look Undervalued to Us

Analyst Note

| David Whiston, CFA, CPA, CFE |

Group 1 reported a record quarter, with second-quarter adjusted diluted earnings per share from continuing operations of $12.00 beating Refinitiv consensus of $10.83. The Brazil segment, which was sold July 1, added another $0.10. Same-store revenue fell 4.3% year over year (down 2.3% excluding foreign exchange), but total revenue rose 14.3% as the integration of the Prime acquisition and other 2021 deals is going faster than expected. We see Group 1’s stock as undervalued and think the company is very well set up to keep delivering strong results while also deploying cash for buybacks and acquisitions to keep growing; thus, we are not changing our fair value estimate. Group 1 has acquired net annual revenue of about $585 million in 2022, and we expect more deals this year.

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Key Statistics GPI

Company Profile GPI

Business Description

Excluding its Brazil operations about to be sold, Group 1 owns and operates 46 collision centers and 201 automotive dealerships in the U.S. and the U.K., offering 34 brands of automobiles altogether--nearly 150 of the stores are in the U.S. with American locations mostly in metropolitan areas in 17 states in the Northeast, Southeast, Midwest, and in California. Texas alone contributed 40% of new vehicle unit volume in 2021 excluding Brazil and the U.K. about 19%. Texas, Oklahoma, and Massachusetts combined were about 55%. Revenue in 2021 totaled $13.5 billion. The company was founded in 1995 and is based in Houston.

800 Gessner, Suite 500
Houston, TX, 77024
T +1 713 647-5700
Industry Auto & Truck Dealerships
Most Recent Earnings Jun 30, 2022
Fiscal Year End Dec 31, 2022
Stock Type Cyclical
Employees 13,711

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