It has been about a month since the last earnings report for Group 1 Automotive (GPI). Shares have added about 17.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Group 1 Automotive due for a pullback? 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 reported third-quarter adjusted earnings per share (EPS) of $9.90, which missed the Zacks Consensus Estimate of $9.93 and fell 18% year over year. The automotive retailer registered net sales of $5.22 billion, beating the Zacks Consensus Estimate of $5.14 billion. The top line also rose from the year-ago quarter’s $4.71 billion.
New vehicle retail sales increased 13.4% from the prior-year quarter to $2.57 billion and exceeded our projection of $2.56 billion on the back of higher-than-expected volumes. Total retail new vehicles sold were 53,775 units, which increased 18.6% year over year and surpassed our forecast of 49,104 units. Average selling price per unit was $48,390, down 3.8% year over year. The gross profit from the new vehicle retail unit totaled $183.2 million, down 5.7% year over year.
Used-vehicle retail sales rose 6.2% from the year-ago period to $1.66 billion but missed our forecast of $1.68 billion. Total retail used vehicles sold were 55,907 units, up 10.1% year over year, exceeding our expectation of 53,919 units. The average selling price per unit came in at $29,630, down 3.5% year over year. The gross profit from the unit was $88 million, up 8.2% year over year.
Used-vehicle wholesale sales rose 7.4% year over year to $123.2 million but missed our expectation of $133.3 million. The unit recorded a gross profit of $0.4 million against the gross loss of $2.3 million in the year-ago period. In the Parts and Service business, the top line rose 16.4% from the year-ago quarter to $660 million and gross profit increased 17% year over year to $367 million. Revenues from the Finance and Insurance business came in at $214.1 million, up 7.4% from the year-ago period’s level.
In the reported quarter, revenues from the U.S. business segment rose 1.8% year over year to $3.97 billion but missed our forecast of $4.3 billion. The segment’s gross profit declined 0.7% to $678.1 million and fell short of our prediction of $705.2 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 39,700, 38,775 and 9,577, respectively.
In the third quarter, revenues jumped 55.2% year over year to $1.25 billion for the U.K. business segment, beating our estimate of $893.1 million due to robust sales of new vehicles. Gross profit was $174.5 million, which surged 68.6% from the year-ago quarter and topped our projection of $108.1 million. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 14,075, 17,132 and 4,643, respectively.
Selling, general and administrative expenses were up 19.1% year over year to $591.6 million. Group 1 had cash and cash equivalents of $58.7 million as of Sept. 30, 2024, up from $57.2 million as of 2023-end. Total debt was $2.89 billion as of Sept. 30, 2024, up from $2.1 billion as of Dec. 31, 2023.
During the quarter under discussion, GPI repurchased 85,245 shares at an average price of $349.55 per common share for a total of $29.8 million. The company currently has $174.8 million remaining on its authorized stock buyback program.
It turns out, fresh estimates have trended downward during the past month.
At this time, Group 1 Automotive has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Group 1 Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Group 1 Automotive is part of the Zacks Automotive - Retail and Whole Sales industry. Over the past month, AutoNation (AN), a stock from the same industry, has gained 15.3%. The company reported its results for the quarter ended September 2024 more than a month ago.
AutoNation reported revenues of $6.59 billion in the last reported quarter, representing a year-over-year change of -4.5%. EPS of $4.02 for the same period compares with $5.54 a year ago.
AutoNation is expected to post earnings of $4.26 per share for the current quarter, representing a year-over-year change of -15.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.1%.
AutoNation has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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