A month has gone by since the last earnings report for Group 1 Automotive (GPI). Shares have lost about 0.3% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Group 1 Automotive due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Group 1 Automotive, Inc. before we dive into how investors and analysts have reacted as of late.
Group 1 Q3 Earnings Miss Estimates, Revenues Increase Y/Y
Group 1 reported third-quarter 2025 adjusted earnings per share (EPS) of $10.45, which missed the Zacks Consensus Estimate of $10.64 but rose 5.6% year over year. The automotive retailer registered net sales of $5.8 billion, which beat the Zacks Consensus Estimate of $5.63 billion. The top line also rose from the year-ago quarter’s $5.2 billion.
Q3 Highlights
New vehicle retail sales increased 9.3% from the prior-year quarter to $2.81 billion and topped our projection of $2.78 billion. Total retail new vehicles sold were 57,269 units, which increased 6.5% year over year but missed our forecast of 58,275 units. The average selling price per unit was $50,816, up 5% year over year. The gross profit from the new vehicle retail unit totaled $186.1 million, up 1.6% year over year.
Used-vehicle retail sales rose 11.8% from the year-ago period to $1.85 billion and surpassed our forecast of $1.80 billion. Total retail used vehicles sold were 59,574 units, up 6.6% year over year, lagging our expectation of 61,011 units. The average selling price per unit was $31,112, up 5% year over year. The gross profit from the unit was $85.4 million, down 3% year over year.
Used-vehicle wholesale sales rose 20.5% year over year to $148.4 million and beat our expectation of $128.4 million. The unit incurred a gross loss of $0.2 million against a gross profit of $0.4 million in the year-ago period. In the Parts and Service business, the top line rose 11.2% to $733.9 million and gross profit increased 11.1% to $407.6 million year over year. Revenues from the Finance and Insurance business were $240.9 million, up 12.5% from the year-ago period’s level.
Segments in DetailIn the reported quarter, revenues from the U.S. business segment rose 6.5% year over year to $4.28 billion and topped our forecast of $4.10 billion. The segment’s gross profit rose 5.4% to $715 million and beat of our prediction of $696.2 million. During the reported quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 41,582, 39,636 and 9,984, respectively.
In the third quarter, revenues jumped 20.4% year over year to $1.50 billion for the U.K. business segment, missing our estimate of $1.51 billion. Gross profit was $204.7 million, which surged 17.3% from the year-ago quarter and beat our projection of $199.9 million. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 15,687, 19,938 and 6,034, respectively.
Financial Position
Selling, general and administrative expenses were up 10.7% year over year to $654.9 million. Group 1 had cash and cash equivalents of $30.8 million as of Sept. 30, 2025, down from $34.4 million as of Dec. 31, 2024. Total debt was $3.47 billion as of Sept. 30, 2025, up from $2.91 billion as of Dec. 31, 2024.
During the quarter under discussion, GPI repurchased 185,788 shares at an average price of $443.18 per common share for a total of $82.5 million. The company currently has $226.3 million remaining on its authorized stock buyback program.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.8% due to these changes.
VGM Scores
Currently, Group 1 Automotive has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for value investors.
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 downward for the stock, and the magnitude of these revisions indicates a downward shift. 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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Group 1 Automotive, Inc. (GPI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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