Group 1 Automotive Inc (GPI, Financial) has recently caught the attention of investors with its notable stock performance. The company's market capitalization stands at a robust $4.03 billion, with the current stock price at $298.23. Over the past week, GPI has seen a significant 12.60% gain, and over the past three months, the stock has climbed by 10.73%. When compared to the GF Value of $300.98, the current price suggests that GPI is fairly valued, a consistent assessment from the past GF Value of $291.7. This stability in valuation indicates that the recent price surge aligns with the company's intrinsic value.
Introduction to Group 1 Automotive Inc
Group 1 Automotive Inc, operating within the Vehicles & Parts industry, is a prominent player in automotive retail. The company manages a network of 199 automotive dealerships and 41 collision centers across the US and UK. With a strong foothold in Texas, which accounted for 38% of new-vehicle unit volume in 2023, and a significant presence in the UK, Group 1 Automotive's revenue reached $17.9 billion in 2023. The upcoming Inchcape UK acquisition is set to further expand its reach. Founded in 1995 and headquartered in Houston, GPI's strategic growth and operational efficiency have been key to its success.
Assessing Group 1 Automotive's Profitability
Group 1 Automotive's financial health is reflected in its impressive Profitability Rank of 9/10. The company's operating margin stands at 5.60%, outperforming 53.98% of 1,282 companies in the same industry. GPI's return on equity (ROE) is an exceptional 24.25%, surpassing 92.02% of its peers. Additionally, the return on assets (ROA) and return on invested capital (ROIC) are 8.29% and 11.76% respectively, both indicating strong profitability relative to the industry. With a decade-long track record of profitability, Group 1 Automotive demonstrates a robust and sustainable business model.
Growth Trajectory of Group 1 Automotive
The company's growth prospects are equally impressive, with a Growth Rank of 10/10. GPI's 3-year revenue growth rate per share is a remarkable 29.80%, and its 5-year rate is 17.30%, both outpacing the majority of its industry counterparts. The estimated total revenue growth rate for the next 3 to 5 years is projected at 8.04%. Earnings per share (EPS) growth rates are also strong, with a 3-year rate of 35.40% and a 5-year rate of 46.40%. However, the future EPS growth rate estimate is a modest 2.00%, suggesting a more conservative outlook in the coming years.
Investor Confidence in Group 1 Automotive
Notable investors have shown confidence in GPI's potential. HOTCHKIS & WILEY holds 39,820 shares, representing 0.29% of the company's shares. Ray Dalio (Trades, Portfolio), a renowned investor, owns 32,830 shares, accounting for 0.24% of GPI's shares. Jeremy Grantham (Trades, Portfolio) also has a stake in the company with 28,217 shares, equating to 0.21%. These investments reflect a belief in the company's value and future prospects among seasoned market participants.
Competitive Landscape
Group 1 Automotive operates in a competitive industry, with close rivals such as Rush Enterprises Inc (RUSHA, Financial) with a market cap of $3.59 billion, Asbury Automotive Group Inc (ABG, Financial) at $4.46 billion, and ACV Auctions Inc (ACVA, Financial) at $3.02 billion. GPI's market cap positions it well within this competitive set, suggesting that it holds a strong market position relative to its peers.
Conclusion: Group 1 Automotive's Market Position and Outlook
In conclusion, Group 1 Automotive Inc's stock performance, when analyzed in conjunction with the GF Value, indicates that the company is fairly valued, reflecting investor confidence in its current price level. The company's profitability metrics and growth rates are robust, signaling a healthy business with potential for continued success. The significant holdings by respected investors further underscore the stock's appeal. Compared to its competitors, GPI maintains a competitive edge in the market. As such, Group 1 Automotive presents a compelling case for investors looking for stability and growth in the automotive retail sector.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
