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Is Group 1 Automotive (GPI) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company value investors might notice is Group 1 Automotive (GPI - Free Report) . GPI is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 7.07. This compares to its industry's average Forward P/E of 8.53. Over the past 52 weeks, GPI's Forward P/E has been as high as 9.13 and as low as 5.56, with a median of 7.30.

Investors should also note that GPI holds a PEG ratio of 1.40. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GPI's industry currently sports an average PEG of 1.40. Within the past year, GPI's PEG has been as high as 4.48 and as low as 1.07, with a median of 1.88.

Investors should also recognize that GPI has a P/B ratio of 1.18. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.44. Over the past 12 months, GPI's P/B has been as high as 1.43 and as low as 0.82, with a median of 1.12.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GPI has a P/S ratio of 0.12. This compares to its industry's average P/S of 0.22.

Finally, our model also underscores that GPI has a P/CF ratio of 5.55. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. GPI's P/CF compares to its industry's average P/CF of 6.42. Within the past 12 months, GPI's P/CF has been as high as 6.14 and as low as 3.11, with a median of 4.88.

These are only a few of the key metrics included in Group 1 Automotive's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, GPI looks like an impressive value stock at the moment.


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