We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Group 1 Automotive (GPI) Up 12.2% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Group 1 Automotive (GPI - Free Report) . Shares have added about 12.2% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Group 1 Q3 Earnings & Sales Top Estimates, Rise Y/Y
Group 1 reported third-quarter 2023 adjusted earnings per share of $12.07, which beat the Zacks Consensus Estimate of $11.32. The bottom line also increased from the prior-year quarter’s earnings of $12 per share. The automotive retailer registered net sales of $4,705.1 million, beating the Zacks Consensus Estimate of $4,554 million. Also, the top line rose from the year-ago quarter’s $4,163.4 million.
Quarter Highlights
New-vehicle retail sales increased 20.2% from the prior-year quarter to $2,264.5 million and exceeded our projection of $2,058.5 million on the back of higher-than-expected volumes. Total retail new vehicles sold were 45,350 units, surpassing our forecast of 40,474 units on improving inventory levels and robust demand despite the high costs of vehicle financing. Average selling price per unit was $50,300, up 4.8% year over year. The gross profit from the new vehicle retail unit totaled $194.3 million, decreasing 6% year over year but exceeding our estimate of $183.5 million owing to revenue outperformance.
Used-vehicle retail sales inched up 4.8% from the year-ago period to $1,559.6 million and outpaced our forecast by $1,420 million on higher-than-expected volumes. Total retail used vehicles sold were 50,799 units, up 4.9% year over year and above our expectation of 50,445 units. Average selling price per unit came in at $30,701, down 0.1% year over year. The gross profit from the unit was $81.4 million, rising 7% year over year and topping our estimate of $64.6 million.
Used-vehicle wholesale sales rose 28.1% year over year to $114.7 million and beat our expectation of $96.2 million. The unit recorded a gross loss of $2.3 million, widening from $1.5 million incurred in the year-ago period. In the Parts and Service business, the top line rose 10% from the year-ago quarter to $566.9 million and gross profit increased 10% year over year to $313.5 million. Revenues from the Finance and Insurance (F&I) business came in at $199.4 million, unchanged from the year-ago period levels.
Segments in Detail
In the reported quarter, revenues in the U.S. business segment climbed 11.9% year over year to $3,899.7 million and exceeded our forecast of $3,528.6 million on solid sales of new vehicle and used vehicle units. The segment’s gross profit grew 3.6% to $682.7 million and came ahead of our prediction by $51.2 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 37,079, 39,676 and 8,380, respectively.
In the reported period, revenues rose 18.6% year over year to $805.5 million for the U.K. business segment, beating our estimate of $777 million due to higher-than-expected sales of new vehicles, used vehicles, parts/services and F&I units. Gross profit was $103.5 million, up 10.9% from the year-ago quarter and in line with our expectations. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 8,271, 11,123 and 3,360, respectively.
Financial Position
Selling, general and administrative expenses were up 10.1% year over year to $496.7 million. Group 1 Automotive had cash and cash equivalents of $52.9 million as of Sep 30, 2023, up from $47.9 million as of 2022-end. Total debt was $2,118.2 million as of Sep 30, 2023, up from $2,082.5 million recorded on Dec 31, 2022.
During the quarter under discussion, GPI repurchased 246,433 shares at an average price of $261.89 per common share for a total of $64.5 million. The company currently has $184.9 million remaining on its authorized stock buyback program.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 6.1% due to these changes.
VGM Scores
At this time, Group 1 Automotive has an average Growth Score of C, 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 quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly 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.
Performance of an Industry Player
Group 1 Automotive is part of the Zacks Automotive - Retail and Whole Sales industry. Over the past month, Asbury Automotive Group (ABG - Free Report) , a stock from the same industry, has gained 9.5%. The company reported its results for the quarter ended September 2023 more than a month ago.
Asbury Automotive reported revenues of $3.67 billion in the last reported quarter, representing a year-over-year change of -5.2%. EPS of $8.12 for the same period compares with $9.23 a year ago.
For the current quarter, Asbury Automotive is expected to post earnings of $7.64 per share, indicating a change of -16.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.5% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Asbury Automotive. Also, the stock has a VGM Score of B.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Group 1 Automotive (GPI) Up 12.2% Since Last Earnings Report?
A month has gone by since the last earnings report for Group 1 Automotive (GPI - Free Report) . Shares have added about 12.2% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Group 1 Q3 Earnings & Sales Top Estimates, Rise Y/Y
Group 1 reported third-quarter 2023 adjusted earnings per share of $12.07, which beat the Zacks Consensus Estimate of $11.32. The bottom line also increased from the prior-year quarter’s earnings of $12 per share. The automotive retailer registered net sales of $4,705.1 million, beating the Zacks Consensus Estimate of $4,554 million. Also, the top line rose from the year-ago quarter’s $4,163.4 million.
Quarter Highlights
New-vehicle retail sales increased 20.2% from the prior-year quarter to $2,264.5 million and exceeded our projection of $2,058.5 million on the back of higher-than-expected volumes. Total retail new vehicles sold were 45,350 units, surpassing our forecast of 40,474 units on improving inventory levels and robust demand despite the high costs of vehicle financing. Average selling price per unit was $50,300, up 4.8% year over year. The gross profit from the new vehicle retail unit totaled $194.3 million, decreasing 6% year over year but exceeding our estimate of $183.5 million owing to revenue outperformance.
Used-vehicle retail sales inched up 4.8% from the year-ago period to $1,559.6 million and outpaced our forecast by $1,420 million on higher-than-expected volumes. Total retail used vehicles sold were 50,799 units, up 4.9% year over year and above our expectation of 50,445 units. Average selling price per unit came in at $30,701, down 0.1% year over year. The gross profit from the unit was $81.4 million, rising 7% year over year and topping our estimate of $64.6 million.
Used-vehicle wholesale sales rose 28.1% year over year to $114.7 million and beat our expectation of $96.2 million. The unit recorded a gross loss of $2.3 million, widening from $1.5 million incurred in the year-ago period. In the Parts and Service business, the top line rose 10% from the year-ago quarter to $566.9 million and gross profit increased 10% year over year to $313.5 million. Revenues from the Finance and Insurance (F&I) business came in at $199.4 million, unchanged from the year-ago period levels.
Segments in Detail
In the reported quarter, revenues in the U.S. business segment climbed 11.9% year over year to $3,899.7 million and exceeded our forecast of $3,528.6 million on solid sales of new vehicle and used vehicle units. The segment’s gross profit grew 3.6% to $682.7 million and came ahead of our prediction by $51.2 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 37,079, 39,676 and 8,380, respectively.
In the reported period, revenues rose 18.6% year over year to $805.5 million for the U.K. business segment, beating our estimate of $777 million due to higher-than-expected sales of new vehicles, used vehicles, parts/services and F&I units. Gross profit was $103.5 million, up 10.9% from the year-ago quarter and in line with our expectations. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 8,271, 11,123 and 3,360, respectively.
Financial Position
Selling, general and administrative expenses were up 10.1% year over year to $496.7 million. Group 1 Automotive had cash and cash equivalents of $52.9 million as of Sep 30, 2023, up from $47.9 million as of 2022-end. Total debt was $2,118.2 million as of Sep 30, 2023, up from $2,082.5 million recorded on Dec 31, 2022.
During the quarter under discussion, GPI repurchased 246,433 shares at an average price of $261.89 per common share for a total of $64.5 million. The company currently has $184.9 million remaining on its authorized stock buyback program.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 6.1% due to these changes.
VGM Scores
At this time, Group 1 Automotive has an average Growth Score of C, 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 quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly 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.
Performance of an Industry Player
Group 1 Automotive is part of the Zacks Automotive - Retail and Whole Sales industry. Over the past month, Asbury Automotive Group (ABG - Free Report) , a stock from the same industry, has gained 9.5%. The company reported its results for the quarter ended September 2023 more than a month ago.
Asbury Automotive reported revenues of $3.67 billion in the last reported quarter, representing a year-over-year change of -5.2%. EPS of $8.12 for the same period compares with $9.23 a year ago.
For the current quarter, Asbury Automotive is expected to post earnings of $7.64 per share, indicating a change of -16.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.5% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Asbury Automotive. Also, the stock has a VGM Score of B.