GROUP 1 AUTOMOTIVE INC (GPI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:GPI - US3989051095 - Common Stock
402.62 USD
-3.54 (-0.87%)
401.82 USD
-0.8 (-0.2%)
Overall GPI gets a fundamental rating of 5 out of 10. We evaluated GPI against 121 industry peers in the Specialty Retail industry. While GPI is still in line with the averages on profitability rating, there are concerns on its financial health. GPI may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
- GPI had positive earnings in the past year.
- GPI had a positive operating cash flow in the past year.
- GPI had positive earnings in each of the past 5 years.
- GPI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- GPI has a Return On Assets of 3.57%. This is in the better half of the industry: GPI outperforms 61.16% of its industry peers.
- GPI's Return On Equity of 12.15% is fine compared to the rest of the industry. GPI outperforms 67.77% of its industry peers.
- GPI has a Return On Invested Capital of 8.28%. This is in the better half of the industry: GPI outperforms 69.42% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for GPI is in line with the industry average of 12.37%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.57% | ||
| ROE | 12.15% | ||
| ROIC | 8.28% |
ROA(3y)7.79%
ROA(5y)7.62%
ROE(3y)23.65%
ROE(5y)23.85%
ROIC(3y)11.08%
ROIC(5y)11.18%
1.3 Margins
- Looking at the Profit Margin, with a value of 1.65%, GPI is in line with its industry, outperforming 58.68% of the companies in the same industry.
- In the last couple of years the Profit Margin of GPI has grown nicely.
- With a decent Operating Margin value of 4.38%, GPI is doing good in the industry, outperforming 61.98% of the companies in the same industry.
- In the last couple of years the Operating Margin of GPI has grown nicely.
- GPI has a Gross Margin of 16.09%. This is amonst the worse of the industry: GPI underperforms 82.64% of its industry peers.
- In the last couple of years the Gross Margin of GPI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.38% | ||
| PM (TTM) | 1.65% | ||
| GM | 16.09% |
OM growth 3Y-11.42%
OM growth 5Y7.66%
PM growth 3Y-14.84%
PM growth 5Y11.89%
GM growth 3Y-3.52%
GM growth 5Y1.52%
2. Health
2.1 Basic Checks
- GPI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- The number of shares outstanding for GPI has been reduced compared to 1 year ago.
- GPI has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for GPI is higher compared to a year ago.
2.2 Solvency
- GPI has an Altman-Z score of 3.52. This indicates that GPI is financially healthy and has little risk of bankruptcy at the moment.
- GPI has a better Altman-Z score (3.52) than 79.34% of its industry peers.
- The Debt to FCF ratio of GPI is 10.91, which is on the high side as it means it would take GPI, 10.91 years of fcf income to pay off all of its debts.
- GPI has a Debt to FCF ratio of 10.91. This is comparable to the rest of the industry: GPI outperforms 53.72% of its industry peers.
- GPI has a Debt/Equity ratio of 1.69. This is a high value indicating a heavy dependency on external financing.
- GPI's Debt to Equity ratio of 1.69 is on the low side compared to the rest of the industry. GPI is outperformed by 66.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.69 | ||
| Debt/FCF | 10.91 | ||
| Altman-Z | 3.52 |
ROIC/WACC0.92
WACC8.99%
2.3 Liquidity
- GPI has a Current Ratio of 1.06. This is a normal value and indicates that GPI is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of GPI (1.06) is worse than 69.42% of its industry peers.
- A Quick Ratio of 0.25 indicates that GPI may have some problems paying its short term obligations.
- The Quick ratio of GPI (0.25) is worse than 85.12% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.25 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.99% over the past year.
- Measured over the past years, GPI shows a very strong growth in Earnings Per Share. The EPS has been growing by 29.17% on average per year.
- Looking at the last year, GPI shows a quite strong growth in Revenue. The Revenue has grown by 19.45% in the last year.
- Measured over the past years, GPI shows a quite strong growth in Revenue. The Revenue has been growing by 10.60% on average per year.
EPS 1Y (TTM)8.99%
EPS 3Y3.87%
EPS 5Y29.17%
EPS Q2Q%5.56%
Revenue 1Y (TTM)19.45%
Revenue growth 3Y13.92%
Revenue growth 5Y10.6%
Sales Q2Q%10.75%
3.2 Future
- Based on estimates for the next years, GPI will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.25% on average per year.
- The Revenue is expected to grow by 6.54% on average over the next years.
EPS Next Y8.23%
EPS Next 2Y6.84%
EPS Next 3Y8.02%
EPS Next 5Y9.25%
Revenue Next Year15.4%
Revenue Next 2Y9.2%
Revenue Next 3Y7.11%
Revenue Next 5Y6.54%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 9.54, the valuation of GPI can be described as very reasonable.
- 89.26% of the companies in the same industry are more expensive than GPI, based on the Price/Earnings ratio.
- The average S&P500 Price/Earnings ratio is at 27.32. GPI is valued rather cheaply when compared to this.
- With a Price/Forward Earnings ratio of 8.98, the valuation of GPI can be described as very reasonable.
- Based on the Price/Forward Earnings ratio, GPI is valued cheaply inside the industry as 89.26% of the companies are valued more expensively.
- GPI is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.54 | ||
| Fwd PE | 8.98 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, GPI is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
- GPI's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GPI is cheaper than 85.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.31 | ||
| EV/EBITDA | 7.73 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of GPI may justify a higher PE ratio.
PEG (NY)1.16
PEG (5Y)0.33
EPS Next 2Y6.84%
EPS Next 3Y8.02%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.50%, GPI is not a good candidate for dividend investing.
- GPI's Dividend Yield is a higher than the industry average which is at 2.08.
- With a Dividend Yield of 0.50, GPI pays less dividend than the S&P500 average, which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.5% |
5.2 History
- The dividend of GPI is nicely growing with an annual growth rate of 11.18%!
- GPI has paid a dividend for at least 10 years, which is a reliable track record.
- GPI has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)11.18%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
- GPI pays out 6.93% of its income as dividend. This is a sustainable payout ratio.
- GPI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP6.93%
EPS Next 2Y6.84%
EPS Next 3Y8.02%
GROUP 1 AUTOMOTIVE INC / GPI FAQ
Can you provide the ChartMill fundamental rating for GROUP 1 AUTOMOTIVE INC?
ChartMill assigns a fundamental rating of 5 / 10 to GPI.
Can you provide the valuation status for GROUP 1 AUTOMOTIVE INC?
ChartMill assigns a valuation rating of 8 / 10 to GROUP 1 AUTOMOTIVE INC (GPI). This can be considered as Undervalued.
What is the profitability of GPI stock?
GROUP 1 AUTOMOTIVE INC (GPI) has a profitability rating of 6 / 10.
What are the PE and PB ratios of GROUP 1 AUTOMOTIVE INC (GPI) stock?
The Price/Earnings (PE) ratio for GROUP 1 AUTOMOTIVE INC (GPI) is 9.54 and the Price/Book (PB) ratio is 1.67.
How sustainable is the dividend of GROUP 1 AUTOMOTIVE INC (GPI) stock?
The dividend rating of GROUP 1 AUTOMOTIVE INC (GPI) is 5 / 10 and the dividend payout ratio is 6.93%.