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Why Is Group 1 Automotive (GPI) Up 5.7% Since Last Earnings Report?
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It has been about a month since the last earnings report for Group 1 Automotive (GPI - Free Report) . Shares have added about 5.7% 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 Q2 Earnings Beat Expectations, Decline Y/Y
Group 1 reported second-quarter 2024 adjusted earnings per share (EPS) of $9.80, beating the Zacks Consensus Estimate of $9.43 but falling 16.4% year over year. The automotive retailer registered net sales of $4.70 billion, missing the Zacks Consensus Estimate of $4.77 billion. However, the top line rose from the year-ago quarter’s $4.56 billion.
Quarter Highlights
New vehicle retail sales increased 5.4% from the prior-year quarter to $2.36 billion and exceeded our projection of $2.27 billion on the back of higher-than-expected volumes. Total retail new vehicles sold were 47,661 units, increasing 6.5% year over year and surpassing our forecast of 44,953 units. Average selling price per unit was $49,996, down 1% year over year. The gross profit from the new vehicle retail unit totaled $170 million, decreasing 15.6% year over year.
Used-vehicle retail sales rose 0.2% from the year-ago period to $1.45 billion but missed our forecast of $1.47 billion. Total retail used vehicles sold were 49,260 units, up 5.3% year over year, exceeding our expectation of 47,621 units. The average selling price per unit came in at $29,501, down 4.9% year over year. The gross profit from the unit was $80.7 million, rising 2.4% year over year.
Used-vehicle wholesale sales fell 7.3% year over year to $104.3 million and missed our expectation of $144.2 million. The unit recorded a gross loss of $1.1 million against the gross profit of $0.9 million in the year-ago period. In the Parts and Service business, the top line rose 2.2% from the year-ago quarter to $574.5 million and gross profit increased 4.2% year over year to $316.8 million. Revenues from the Finance and Insurance business came in at $200.1 million, up 5.2% from the year-ago period’s level.
Segments in Detail
In the reported quarter, revenues from the U.S. business segment climbed 3.2% year over year to $3.92 billion but missed our forecast of $3.93 billion, largely on solid sales of new vehicles. The segment’s gross profit declined 0.3% to $667.7 million and fell short of our prediction of $673.7 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 39,273, 38,611 and 8,964, respectively.
In the second quarter, revenues rose 2.1% year over year to $775.2 million for the U.K. business segment, lagging our estimate of $799.9 million due to robust sales of new vehicles. Gross profit was $98.8 million, which declined 6.6% from the year-ago quarter and missed our projection of $99.5 million. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 8,388, 10,649 and 2,855, respectively.
Financial Position
Selling, general and administrative expenses were up 3.6% year over year to $497.2 million. Group 1 had cash and cash equivalents of $64.4 million as of Jun 30, 2024, up from $57.2 million as of 2023-end. Total debt was $2.45 billion as of Jun 30, 2024, up from $2.1 billion as of Dec 31, 2023.
During the quarter under discussion, GPI repurchased 149,570 shares at an average price of $307.82 per common share for a total of $46 million. The company currently has $204.6 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 estimates revision.
VGM Scores
At this time, Group 1 Automotive has a poor Growth Score of F, 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 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.
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Why Is Group 1 Automotive (GPI) Up 5.7% Since Last Earnings Report?
It has been about a month since the last earnings report for Group 1 Automotive (GPI - Free Report) . Shares have added about 5.7% 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 Q2 Earnings Beat Expectations, Decline Y/Y
Group 1 reported second-quarter 2024 adjusted earnings per share (EPS) of $9.80, beating the Zacks Consensus Estimate of $9.43 but falling 16.4% year over year. The automotive retailer registered net sales of $4.70 billion, missing the Zacks Consensus Estimate of $4.77 billion. However, the top line rose from the year-ago quarter’s $4.56 billion.
Quarter Highlights
New vehicle retail sales increased 5.4% from the prior-year quarter to $2.36 billion and exceeded our projection of $2.27 billion on the back of higher-than-expected volumes. Total retail new vehicles sold were 47,661 units, increasing 6.5% year over year and surpassing our forecast of 44,953 units. Average selling price per unit was $49,996, down 1% year over year. The gross profit from the new vehicle retail unit totaled $170 million, decreasing 15.6% year over year.
Used-vehicle retail sales rose 0.2% from the year-ago period to $1.45 billion but missed our forecast of $1.47 billion. Total retail used vehicles sold were 49,260 units, up 5.3% year over year, exceeding our expectation of 47,621 units. The average selling price per unit came in at $29,501, down 4.9% year over year. The gross profit from the unit was $80.7 million, rising 2.4% year over year.
Used-vehicle wholesale sales fell 7.3% year over year to $104.3 million and missed our expectation of $144.2 million. The unit recorded a gross loss of $1.1 million against the gross profit of $0.9 million in the year-ago period. In the Parts and Service business, the top line rose 2.2% from the year-ago quarter to $574.5 million and gross profit increased 4.2% year over year to $316.8 million. Revenues from the Finance and Insurance business came in at $200.1 million, up 5.2% from the year-ago period’s level.
Segments in Detail
In the reported quarter, revenues from the U.S. business segment climbed 3.2% year over year to $3.92 billion but missed our forecast of $3.93 billion, largely on solid sales of new vehicles. The segment’s gross profit declined 0.3% to $667.7 million and fell short of our prediction of $673.7 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 39,273, 38,611 and 8,964, respectively.
In the second quarter, revenues rose 2.1% year over year to $775.2 million for the U.K. business segment, lagging our estimate of $799.9 million due to robust sales of new vehicles. Gross profit was $98.8 million, which declined 6.6% from the year-ago quarter and missed our projection of $99.5 million. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 8,388, 10,649 and 2,855, respectively.
Financial Position
Selling, general and administrative expenses were up 3.6% year over year to $497.2 million. Group 1 had cash and cash equivalents of $64.4 million as of Jun 30, 2024, up from $57.2 million as of 2023-end. Total debt was $2.45 billion as of Jun 30, 2024, up from $2.1 billion as of Dec 31, 2023.
During the quarter under discussion, GPI repurchased 149,570 shares at an average price of $307.82 per common share for a total of $46 million. The company currently has $204.6 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 estimates revision.
VGM Scores
At this time, Group 1 Automotive has a poor Growth Score of F, 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 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.