Group 1 Automotive Q4 Earnings Miss Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6h ago
0mins
Source: seekingalpha
- Earnings Performance: Group 1 Automotive reported a Q4 non-GAAP EPS of $8.49, missing expectations by $0.89, indicating pressure on profitability that could impact investor confidence.
- Revenue Growth Weakness: The company's Q4 revenue reached $5.58 billion, reflecting a 1.8% year-over-year increase, yet it fell short of market expectations by $70 million, highlighting a trend of slowing sales growth that may pose challenges for future performance.
- Dividend and Buyback Plans: Group 1 declared a $0.50 per share dividend and approved a new stock buyback program, aiming to enhance shareholder trust through capital returns, although the current financial performance is underwhelming, this move may help stabilize the stock price.
- Market Reaction Outlook: Given the earnings miss, the market is expected to adopt a cautious stance towards Group 1 Automotive's future performance, prompting investors to reassess the company's investment value in the automotive sector.
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Analyst Views on GPI
Wall Street analysts forecast GPI stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for GPI is 481.25 USD with a low forecast of 435.00 USD and a high forecast of 510.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
5 Analyst Rating
4 Buy
1 Hold
0 Sell
Strong Buy
Current: 396.410
Low
435.00
Averages
481.25
High
510.00
Current: 396.410
Low
435.00
Averages
481.25
High
510.00
About GPI
Group 1 Automotive, Inc. is an automotive retailer. It operates through two segments: the U.S. and the U.K. Through its dealerships and omnichannel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts. It owns and operates about 263 automotive dealerships, 335 franchises, and 39 collision centers in the United States and the United Kingdom that offer 35 brands of automobiles. It sells retail used vehicles directly to its customers at its dealerships and via AcceleRide and wholesale its used vehicles at third-party auctions. Its operations are located in areas including Texas, Massachusetts, Oklahoma, California, Georgia, New Mexico, Maine, New Jersey, New Hampshire, Florida, South Carolina, Louisiana, Kansas, New York, Maryland, and others. It also offers third-party finance, vehicle service, and insurance products.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Group 1 Automotive to Announce Q4 Earnings on January 29
- Earnings Announcement Date: Group 1 Automotive is set to release its Q4 earnings on January 29 before market open, with consensus EPS estimated at $9.38, reflecting a 6.4% year-over-year decline, while revenue is projected at $5.67 billion, indicating a 3.1% year-over-year increase, showcasing the company's resilience amid market fluctuations.
- Historical Performance: Over the past two years, Group 1 Automotive has exceeded EPS estimates 75% of the time and revenue estimates 100% of the time, demonstrating the company's reliability and execution in financial forecasting.
- Estimate Revision Dynamics: In the last three months, there have been no upward revisions to EPS estimates, with five downward adjustments, while revenue estimates saw three upward revisions and two downward, reflecting a cautious market outlook on the company's future performance.
- Shareholder Return Measures: Group 1 Automotive declared a $0.50 dividend per share and approved a new stock buyback plan, aimed at enhancing shareholder value and boosting market confidence.
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Group 1 Automotive Reports Higher Q4 Net Income
- Net Income Decline: Group 1 Automotive reported a net income of $43.1 million for Q4, down from $92.9 million last year, despite a slight revenue increase to $5.58 billion, indicating a significant drop in profitability.
- Earnings Per Share Drop: The company's earnings per share fell to $3.47 from $7.08 last year, missing analysts' expectations of $9.38, raising concerns about its financial health and market competitiveness.
- Operating Income Reduction: Operating income decreased to $139.3 million from $193.7 million year-over-year, highlighting challenges in cost management and operational efficiency that could impact future investment decisions.
- Market Reaction: In pre-market trading, Group 1 Automotive's stock price fell by 0.11% to $395.99 on the New York Stock Exchange, reflecting investor caution regarding the company's financial performance.
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