📊 GPI Key Takeaways
Is Group 1 Automotive Inc. (GPI) a Good Investment?
Despite 13.2% revenue growth, net income expanded only 1.2%, indicating severe margin compression and operational stress. Liquidity metrics are concerning with a 0.95x current ratio and 0.21x quick ratio, while the company generates minimal free cash flow (0.2% FCF margin) despite $5.4B in revenue. The combination of weak profitability (2.4% net margin, 4.6% ROE), high leverage (1.00x D/E), and depleted cash reserves ($41.7M) presents significant fundamental deterioration.
Topline growth is strong and cash generation remains positive, supported by very high interest coverage and manageable leverage. However, margins are thin, EPS declined sharply despite flat net income, and liquidity is inventory-heavy, leaving results sensitive to normalization in the auto cycle.
Why Buy Group 1 Automotive Inc. Stock? GPI Key Strengths
- Strong top-line growth of 13.2% YoY demonstrates market demand and operational scale
- Excellent interest coverage ratio of 35.2x provides debt service safety
- Operating cash flow of $92.4M shows the business can still generate cash despite profitability pressures
- Double-digit revenue growth (+13.2% YoY) at scale
- Positive free cash flow ($424.5M) and strong interest coverage (106.4x)
- Moderate leverage (Debt/Equity 1.23x) with ROE of 11.7%
GPI Stock Risks: Group 1 Automotive Inc. Investment Risks
- Severe margin compression: revenue up 13.2% but net income up only 1.2% suggests cost structure misalignment or unfavorable product mix
- Critical liquidity stress with current ratio of 0.95x and quick ratio of 0.21x indicates potential working capital deficit and payment constraints
- Minimal cash position ($41.7M) relative to $10.1B asset base and $2.9B long-term debt creates financial inflexibility
- EPS declined 31.4% YoY despite slight net income growth, indicating share dilution or negative non-operating items
- Anemic free cash flow generation (0.2% FCF margin) limits capital allocation flexibility and debt reduction capacity
- Margin compression risk (operating margin 3.3%, net 1.4%)
- Low quick ratio (0.27x) and minimal cash increase liquidity risk
- EPS dilution/decline (-31.4% YoY) despite stable net income
Key Metrics to Watch
- Gross margin trend to assess whether compression is temporary or structural
- Free cash flow and cash position to evaluate liquidity adequacy under stress
- Operating margin stability amid competitive pressures in auto retail sector
- Operating margin trend
- Free cash flow margin/conversion
Group 1 Automotive Inc. (GPI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 0.2% FCF margin may limit capital allocation flexibility. The current ratio below 1.0x warrants monitoring of short-term liquidity.
GPI Profit Margin, ROE & Profitability Analysis
GPI vs Automotive Sector: How Group 1 Automotive Inc. Compares
How Group 1 Automotive Inc. compares to Automotive sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Group 1 Automotive Inc. Stock Overvalued? GPI Valuation Analysis 2026
Based on fundamental analysis, Group 1 Automotive Inc. has mixed fundamental signals relative to the Automotive sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Group 1 Automotive Inc. Balance Sheet: GPI Debt, Cash & Liquidity
GPI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Group 1 Automotive Inc.'s revenue has grown significantly by 67% over the 5-year period, indicating strong business expansion. The most recent EPS of $42.73 reflects profitable operations.
GPI Revenue Growth, EPS Growth & YoY Performance
GPI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $5.4B | $128.1M | $9.67 |
| Q3 2025 | $5.2B | $13.0M | $1.00 |
| Q2 2025 | $4.7B | $138.2M | $10.17 |
| Q1 2025 | $4.5B | $128.1M | $9.67 |
| Q3 2024 | $4.7B | $117.3M | $8.69 |
| Q2 2024 | $4.6B | $138.2M | $10.17 |
| Q1 2024 | $4.1B | $147.9M | $10.80 |
| Q3 2023 | $4.2B | $163.9M | $11.65 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Group 1 Automotive Inc. Dividends, Buybacks & Capital Allocation
GPI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Group 1 Automotive Inc. (CIK: 0001031203)
📋 Recent SEC Filings
❓ Frequently Asked Questions about GPI
What is the AI rating for GPI?
Group 1 Automotive Inc. (GPI) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 76% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are GPI's key strengths?
Claude: Strong top-line growth of 13.2% YoY demonstrates market demand and operational scale. Excellent interest coverage ratio of 35.2x provides debt service safety. ChatGPT: Double-digit revenue growth (+13.2% YoY) at scale. Positive free cash flow ($424.5M) and strong interest coverage (106.4x).
What are the risks of investing in GPI?
Claude: Severe margin compression: revenue up 13.2% but net income up only 1.2% suggests cost structure misalignment or unfavorable product mix. Critical liquidity stress with current ratio of 0.95x and quick ratio of 0.21x indicates potential working capital deficit and payment constraints. ChatGPT: Margin compression risk (operating margin 3.3%, net 1.4%). Low quick ratio (0.27x) and minimal cash increase liquidity risk.
What is GPI's revenue and growth?
Group 1 Automotive Inc. reported revenue of $5.4B.
Does GPI pay dividends?
Group 1 Automotive Inc. pays dividends, with $6.6M distributed to shareholders in the trailing twelve months.
Where can I find GPI SEC filings?
Official SEC filings for Group 1 Automotive Inc. (CIK: 0001031203) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is GPI's EPS?
Group 1 Automotive Inc. has a diluted EPS of $10.85.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is GPI a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Group 1 Automotive Inc. has a SELL rating with 76% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is GPI stock overvalued or undervalued?
Valuation metrics for GPI: ROE of 4.6% (sector avg: 12%), net margin of 2.4% (sector avg: 6%). Compare these metrics with sector averages to assess valuation.
Should I buy GPI stock in 2026?
Our dual AI analysis gives Group 1 Automotive Inc. a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is GPI's free cash flow?
Group 1 Automotive Inc.'s operating cash flow is $92.4M, with capital expenditures of $84.0M. FCF margin is 0.2%.
How does GPI compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 2.4% (avg: 6%), ROE 4.6% (avg: 12%), current ratio 0.95 (avg: 1.2).