Core Viewpoint - Group 1 Automotive (GPI) shares have shown significant growth, driven by strategic acquisitions and positive earnings expectations, indicating potential strength in the stock moving forward [1][2][3]. Group 1 Automotive (GPI) - GPI shares increased by 3.1% to close at $480.13, with a notable trading volume compared to typical sessions, and a total gain of 5.2% over the past four weeks [1]. - The company has focused on expanding its portfolio through acquisitions, including the Inchcape buyout in 2024, which is projected to add $2.7 billion in annualized revenues. Total acquired revenues for 2024 reached $3.9 billion, with $430 million in annualized revenues acquired year to date [2]. - The upcoming quarterly earnings report is expected to show earnings of $10.16 per share, reflecting a year-over-year increase of 3.7%, and revenues are anticipated to be $5.51 billion, up 17.3% from the previous year [3]. - The consensus EPS estimate for GPI has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without trends in earnings estimate revisions [4]. - GPI currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook compared to other stocks in the automotive retail and wholesale industry [5]. Industry Context - Group 1 Automotive is part of the Zacks Automotive - Retail and Wholesale industry, where AutoNation (AN) also operates. AN shares closed 0.7% higher at $214.83, with a return of 9.8% over the past month [5]. - AutoNation's consensus EPS estimate has increased by 0.7% over the past month to $4.62, representing a year-over-year change of 15.8% [6].

Core Viewpoint - The article emphasizes the importance of value investing and highlights Group 1 Automotive (GPI) as a strong candidate for value investors due to its favorable valuation metrics and earnings outlook [2][3][7] Valuation Metrics - GPI has a Price-to-Book (P/B) ratio of 1.97, which is lower than the industry average of 2.47, indicating it may be undervalued [4] - The Price-to-Sales (P/S) ratio for GPI is 0.29, compared to the industry's average P/S of 0.3, further suggesting potential undervaluation [5] - GPI's Price-to-Cash Flow (P/CF) ratio stands at 9.99, which is also below the industry average of 11.34, reinforcing the notion of being undervalued [6] Earnings Outlook - GPI is currently rated with a Zacks Rank of 2 (Buy) and has an "A" grade for Value, indicating strong potential for value investors [3][7] - The stock's earnings outlook is considered strong, making GPI one of the market's strongest value stocks [7]

COVID-19 Impact and Response - January and February results were strong, but March was significantly impacted by shelter-in-place orders in the U S and a complete shutdown in the U K [7] - U S service departments experienced a 40-50% decrease in customer traffic since mid-March [7] - The company is recalling furloughed employees in the U S and expects to add back approximately 500 U S employees by June [7] - Approximately 20% of vehicle purchases are now completed via home deliveries [13] Financial Performance and Metrics - The company's market capitalization was approximately $1 billion as of April 30, 2020 [16] - In Q1 2020, revenues were $2691 million, a 4 2% decrease compared to $2808 million in Q1 2019 [111] - Adjusted net income for Q1 2020 was $30 6 million, compared to $38 2 million in Q1 2019 [111] - Adjusted diluted earnings per share (EPCS) for Q1 2020 was $1 66, compared to $2 06 in Q1 2019 [111] Geographic and Business Diversity - The company has 186 dealerships worldwide, including 119 in the United States, 50 in the United Kingdom, and 17 in Brazil [18] - In Q1 2020, 69% of new vehicle unit sales were in the United States, 25% in the United Kingdom, and 6% in Brazil [18, 20] - Texas accounts for 35% of the company's geographic diversity in Q1 2020 [22] Strategic Initiatives - The company implemented an online retailing initiative across all dealerships as of December 31, 2019 [54] - Early April trends show a ~60% increase in daily leads for the Acceleride platform compared to January/February levels [54] - The company's U S year-over-year same store service advisor and technician headcount has grown by +11% as of December 31, 2019 [60]

COVID-19 Impact and Recovery - In the first half of April, the Company's vehicle sales and service business were down approximately 50%[5] - By the end of June, the Company's new vehicle sales had rebounded to a level approximately 15% below last year[6] - The flexibility of the business model allowed the Company to generate record operating profit despite an approximate 30% decrease in total company second quarter revenues[7] - In April, the Company furloughed 90% of its employees in the U K[10] - By the end of May, the Company still had 75% of staff furloughed in the U K[11] - At the end of June, 50% of the Company's staff remained on furlough in the U K, but workshop demand had recovered to approximately 70% of pre-COVID levels[12] Cost Management and SG&A Reduction - The Company took swift action to furlough or lay off 4,800 U S employees, representing 42% of headcount[18] - The Company anticipates a permanent impact that will lower SG&A as a percentage of gross profit by at least 200-300 basis points[18] - Nearly $300 million of annualized U S SG&A reduction from 2Q19[18] AcceleRide® Performance - 2Q20 AcceleRide® leads were up 203 percent and 2Q20 AcceleRide® sales were up 190% from prior year period—averaged ~1,000 retail unit sales per month via this channel[51] Financial Overview - As of June 30, 2020, the Company owns approximately $13 billion of net real estate, representing 61% of dealership locations, financed through $621 million of mortgage debt[101]

Financial Performance - Group 1 Automotive's Q3 2020 revenues were $3040 million, a decrease of 2.5% compared to $3118 million in Q3 2019 [41] - Net income for Q3 2020 was $1264 million, a significant increase of 232.3% compared to $38 million in Q3 2019 [41] - Adjusted net income for Q3 2020 was $129 million, up 129.1% from $563 million in Q3 2019 [41] - Adjusted diluted earnings per share (EPCS) for Q3 2020 was $697, a 130.8% increase from $302 in Q3 2019 [41] - Adjusted free cash flow CAGR 2019 was $237 million [3] Operational Highlights - AcceleRide sales experienced 99% growth in total sales in September 2020 compared to September 2019 [10] - The company owns approximately $13 billion of net real estate, representing 61% of dealership locations, financed through $628 million of mortgage debt as of September 30, 2020 [35] - Parts & Service segment provides consolidated P&S Revenue & +61% 2014-2019 [13] Strategic Initiatives - Group 1 refinanced $850 million of bond debt due in 2022/23 with $726 million of bond/mortgage debt due mostly in 2027/28, resulting in total interest savings of over $15 million annually [21] - The company repurchased approximately 598000 shares in 2020, representing about 3% of its float [38] - The company targets acquisitions that clear return hurdles (10% after-tax discounted cash flow) [39]

Financial Performance & Growth - Group 1 Automotive's adjusted EPS CAGR was +25.5%[4] - The company's revenue CAGR was +20.6% reaching $12044 million in 2020[4, 7] - Adjusted free cash flow reached $426 million in 2020[6] Business Segments - Parts & Service contributes approximately 45% of the company's total gross profit[15] - The company's parts and service revenue increased by +6.1% CAGR from 2014 to 2019, reaching $1510 million in 2019[33] Geographic Footprint & Strategy - 41% of Group 1 Automotive's Q4 2020 total new vehicle unit sales were in Texas[23] - The company has allocated $34 billion in acquired revenues from 2014-2020[27] Digital Retail - AcceleRide® digital platform experienced +104% year-over-year growth in FY20 total sales[45] Finance & Insurance - Finance & Insurance gross profit per retail unit (PRU) in the U S reached $1951 in 2020[52, 53] Debt and Liquidity - The company has immediate liquidity of over $500 million[13]

Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our strategic investments, goals, plans, projections and guidance regarding our financial ...

Financial Performance & Growth - Adjusted Earnings Per Share (EPS) increased by 255% [8] - Revenue experienced a Compound Annual Growth Rate (CAGR) of over 15% [8] - Group 1 has never lost money on an operating basis in any quarter [12] - AcceleRide® achieved 68% growth in units sold year-over-year for 3Q21 [12] Business Strategy & Operations - Parts & Service generates approximately 45% of total gross profit [9] - The company has acquired approximately $41 billion in revenue through acquisitions from 2014 to YTD 2021 [20] - Approximately half of Group 1's vehicles sold utilized at least one component of the AcceleRide® platform during 3Q21 [34] Geographic Footprint & Market Position - Group 1 operates 120 dealerships in 15 states in the United States [13] - Texas accounts for 37% of 3Q21 total new vehicle unit sales [15] - As of September 30, 2021, the Company owns approximately $14 billion of net real estate, representing 61% of dealership locations [24]

COVID-19 Impact and Recovery - In the first half of April, the Company's vehicle sales and service businesses were down about 50%[5] - By the end of June, the Company's new vehicle sales had rebounded to a level approximately 15% below last year, but then stalled out due to inventory issues[5] - The flexibility of the business model allowed the Company to generate record operating profit despite ~30% decrease in total company second quarter revenues[5] - In April, the Company had furloughed 90% of its employees in the U K [6] - At the end of June, 50% of the Company's staff remained on furlough in the U K [6] Cost Management - Swift action was taken to furlough or lay off 4,800 U S employees (43% of headcount)[13] - Nearly $300 million of annualized U S SG&A reduction from 2Q19[13] - Adjusted SG&A as a % of Gross Profit decreased from 70% in 2Q19 to 59% in 2Q20[12] AcceleRide® Program - AcceleRide® sales have shown significant growth, with total online sales reaching 1,057 units in August 2020[58] - Click to Enter AcceleRide increased +43%, Credit App Submission increased +14%, and F&I Included increased +16% post-COVID[53] Financial Performance - Group 1 Automotive has a market cap of approximately $1 6 billion as of July 27, 2020[19] - The Company redeemed 5 25% bonds ($300 million face) on April 3[86] - The Company refinanced 5 00% bonds ($550 million face) with 4 00% bonds[87]

Financial Performance & Growth - Group 1's 2021 revenue reached $13802 million, a significant increase from $10852 million in 2020[9] - Adjusted EPS in 2021 was $3502, compared to $1806 in 2020, demonstrating substantial earnings growth[9] - Adjusted free cash flow for 2021 was $656 million, up from $426 million in 2020, highlighting strong cash generation[9] - From 2020 through 1Q22, the company repurchased approximately 15% of its outstanding common shares, totaling $4059 million[34] Strategic Initiatives & Market Position - Group 1 completed $25 billion in acquisitions in 2021 and $550 million year-to-date in 2022, indicating a focus on growth through strategic acquisitions[10] - The company's digital platform, AcceleRide®, experienced 77% year-over-year growth in units sold in FY21, showcasing the success of its digital retail strategy[10] - Parts & Service contributes approximately 45% of total gross profit, emphasizing its importance to the business model[28] - U S same store used retail units grew by 15% on a year-over-year basis in 2021, outperforming the industry[34] Geographic Focus - Texas locations generated 40% of 4Q21 total new vehicle unit sales, highlighting the importance of the Texas market[25] - Group 1 is the 1 auto retailer in Texas, capitalizing on the state's strong economic growth and business climate[27] Real Estate Strategy - As of December 31, 2021, Group 1 owned approximately $17 billion of gross real estate, representing 64% of dealership locations[37]