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Group 1 Automotive (GPI) Up 9.3% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Group 1 Automotive (GPI - Free Report) . Shares have added about 9.3% 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's Q4 Earnings Beat Estimates, Increase Y/Y
Group 1 fourth-quarter 2022 adjusted earnings per share of $10.86, beating the Zacks Consensus Estimate of $10.51. The outperformance can be attributed to higher-than-anticipated gross profit from the company’s New-vehicle retail and Parts/Service segments. The bottom line increased 15.1% from the prior-year quarter’s $9.43 per share.
The automotive retailer registered net sales of $4,069 million, beating the Zacks Consensus Estimate of $3,872 million. Also, the top line rose 16.6% from the year-ago quarter’s $3,489.6 million.
Quarter Highlights
New-vehicle retail sales increased 17.7% from the prior-year quarter to $1,972.8 million. The figure surpassed the Zacks Consensus Estimate of $1,819 million. The gross profit from the unit totaled $207.4 million, increasing 7.1% year over year. The reported profit figure surpassed the consensus mark of $197 million.
Used-vehicle retail sales rose 16.1% from the year-ago period to $1,319.4 million and outpaced the consensus mark of $1,311 million. The gross profit from the unit was $60.4 million, shrinking 33.3% year over year. The reported profit figure lagged the consensus estimate of $69 million.
Used-vehicle wholesale sales fell 2.3% year over year to $85.7 million and missed the consensus mark of $87 million. The unit recorded a gross loss of $2.1 million against a profit of $4.8 million reported in the year-ago period. The loss was wider than the Zacks Consensus Estimate of $0.72 million.
In the Parts and Service business, the top line rose 18.1% from the year-ago quarter to $518.4 million. The revenue figure topped the Zacks Consensus Estimate of $495 million. The gross profit for the segment was $281.1 million, climbing 21.1% year over year and outpacing the consensus mark of $270 million.
Revenues from the Finance and Insurance business improved 15% from the prior-year period’s levels to $172.7 million, beating the consensus mark of $169 million.
Segments in Detail
In the reported quarter, revenues in the U.S. business segment climbed 19.6% year over year to $3,414.2 million. The segment’s gross profit grew 8.3% to $625.8 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 32,064, 34,997 and 6,563, respectively.
In the reported period, revenues climbed 3.1% year over year to $654.8 million for the U.K. business segment. Also, the gross profit was $93.6 million, up 0.6% from the year-ago quarter. During the reported quarter, the retail new-vehicle, retail used-vehicle, and wholesale used-vehicle units sold were 7,858, 8,563 and 2,440, respectively.
Financial Position
Selling, general and administrative expenses were up 7.8% year over year to $453.8 million. Group 1 Automotive had cash and cash equivalents of $47.9 million as of Dec 31, 2022, up from $14.9 million as of 2021-end. Total debt was $2,082.5 million as of Dec 31, 2022, up from $2,035.7 million recorded on Dec 31, 2021.
During the current quarter, GPI repurchased 973,365 shares at an average price of $166.14 per common share for a total of $161.7 million. As of Dec 31, 2022, the company had 14.3 million common shares outstanding.
Group 1 adopted a Rule 10b5-1 trading plan, effective from Jan 3, 2023 to Jan 23, under which it repurchased an additional 76,294 shares after Dec 31, 2022, at an average price of $179.42, for a total amount of $13.7 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 9.53% due to these changes.
VGM Scores
Currently, Group 1 Automotive has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward 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.
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Group 1 Automotive (GPI) Up 9.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Group 1 Automotive (GPI - Free Report) . Shares have added about 9.3% 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's Q4 Earnings Beat Estimates, Increase Y/Y
Group 1 fourth-quarter 2022 adjusted earnings per share of $10.86, beating the Zacks Consensus Estimate of $10.51. The outperformance can be attributed to higher-than-anticipated gross profit from the company’s New-vehicle retail and Parts/Service segments. The bottom line increased 15.1% from the prior-year quarter’s $9.43 per share.
The automotive retailer registered net sales of $4,069 million, beating the Zacks Consensus Estimate of $3,872 million. Also, the top line rose 16.6% from the year-ago quarter’s $3,489.6 million.
Quarter Highlights
New-vehicle retail sales increased 17.7% from the prior-year quarter to $1,972.8 million. The figure surpassed the Zacks Consensus Estimate of $1,819 million. The gross profit from the unit totaled $207.4 million, increasing 7.1% year over year. The reported profit figure surpassed the consensus mark of $197 million.
Used-vehicle retail sales rose 16.1% from the year-ago period to $1,319.4 million and outpaced the consensus mark of $1,311 million. The gross profit from the unit was $60.4 million, shrinking 33.3% year over year. The reported profit figure lagged the consensus estimate of $69 million.
Used-vehicle wholesale sales fell 2.3% year over year to $85.7 million and missed the consensus mark of $87 million. The unit recorded a gross loss of $2.1 million against a profit of $4.8 million reported in the year-ago period. The loss was wider than the Zacks Consensus Estimate of $0.72 million.
In the Parts and Service business, the top line rose 18.1% from the year-ago quarter to $518.4 million. The revenue figure topped the Zacks Consensus Estimate of $495 million. The gross profit for the segment was $281.1 million, climbing 21.1% year over year and outpacing the consensus mark of $270 million.
Revenues from the Finance and Insurance business improved 15% from the prior-year period’s levels to $172.7 million, beating the consensus mark of $169 million.
Segments in Detail
In the reported quarter, revenues in the U.S. business segment climbed 19.6% year over year to $3,414.2 million. The segment’s gross profit grew 8.3% to $625.8 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 32,064, 34,997 and 6,563, respectively.
In the reported period, revenues climbed 3.1% year over year to $654.8 million for the U.K. business segment. Also, the gross profit was $93.6 million, up 0.6% from the year-ago quarter. During the reported quarter, the retail new-vehicle, retail used-vehicle, and wholesale used-vehicle units sold were 7,858, 8,563 and 2,440, respectively.
Financial Position
Selling, general and administrative expenses were up 7.8% year over year to $453.8 million. Group 1 Automotive had cash and cash equivalents of $47.9 million as of Dec 31, 2022, up from $14.9 million as of 2021-end. Total debt was $2,082.5 million as of Dec 31, 2022, up from $2,035.7 million recorded on Dec 31, 2021.
During the current quarter, GPI repurchased 973,365 shares at an average price of $166.14 per common share for a total of $161.7 million. As of Dec 31, 2022, the company had 14.3 million common shares outstanding.
Group 1 adopted a Rule 10b5-1 trading plan, effective from Jan 3, 2023 to Jan 23, under which it repurchased an additional 76,294 shares after Dec 31, 2022, at an average price of $179.42, for a total amount of $13.7 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 9.53% due to these changes.
VGM Scores
Currently, Group 1 Automotive has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward 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.