Group 1 Automotive (GPI) Down 1.7% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Group 1 Automotive (GPI). Shares have lost about 1.7% in that time frame, outperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Group 1 Automotive due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Group 1 Q4 Earnings Surpass Expectations, Sales Rise Y/YGroup 1 reported fourth-quarter 2024 adjusted earnings per share (EPS) of $10.02, which beat the Zacks Consensus Estimate of $9.21 and rose 5.5% year over year. The automotive retailer registered net sales of $5.55 billion, beating the Zacks Consensus Estimate of $5.20 billion. The top line also rose from the year-ago quarter’s $4.48 billion.Quarter HighlightsNew vehicle retail sales increased 23.7% from the prior-year quarter to $2.86 billion, which exceeded our projection of $2.74 billion on the back of higher-than-expected volumes. Total retail new vehicles sold were 57,939 units, which increased 26.4% year over year and surpassed our forecast of 52,511 units. Average selling price per unit was $51,106, up 0.7% year over year. The gross profit from the new vehicle retail unit totaled $205.1 million, up 11.2% year over year.Used-vehicle retail sales rose 23.9% from the year-ago period to $1.65 billion and surpassed our forecast of $1.49 billion. Total retail used vehicles sold were 55,337 units, up 23.9% year over year, exceeding our expectation of 49,932 units. The average selling price per unit came in at $29,879, which remained flat year over year. The gross profit from the unit was $79.3 million, up 23.8% year over year.Used-vehicle wholesale sales rose 26% year over year to $128.9 million and outpaced our expectation of $112.3 million. The unit incurred a gross loss of $1.7 million against a gross loss of $4.3 million in the year-ago period. In the Parts and Service business, the top line rose 24.8% from the year-ago quarter to $680.2 million and gross profit increased 23.9% year over year to $370.9 million. Revenues from the Finance and Insurance business came in at $225.5 million, up 20.5% from the year-ago period’s level.Segments in DetailIn the reported quarter, revenues from the U.S. business segment rose 12.3% year over year to $4.23 billion but missed our forecast of $4.29 billion. The segment’s gross profit rose 8.7% to $695.9 million but fell short of our prediction of $728.3 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 43,348, 37,699 and 9,594, respectively.In the fourth quarter, revenues jumped 85.3% year over year to $1.31 billion for the U.K. business segment, beating our estimate of $867.7 million due to robust sales of retail new and used vehicles. Gross profit was $183.3 million, which surged 102.6% from the year-ago quarter and beat our projection of $108.6 million. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 14,591, 17,638 and 5,139, respectively.Financial PositionSelling, general and administrative expenses were up 26% year over year to $614.3 million. Group 1 had cash and cash equivalents of $34.4 million as of Dec. 31, 2024, down from $57.2 million as of 2023-end. Total debt was $2.91 billion as of Dec. 31, 2024, up from $2.1 billion as of Dec. 31, 2023.During the quarter under discussion, GPI repurchased 80,300 shares at an average price of $398.30 per common share for a total of $32 million. The company currently has $476.1 million remaining on its authorized stock buyback program.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.VGM ScoresAt this time, Group 1 Automotive has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, Group 1 Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Group 1 Automotive, Inc. (GPI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks