Financial Data and Key Metrics Changes - GAAP EPS was $2.04 per share, and adjusted EPS was $1.48 per share, a 9% increase year over year [5] - First quarter consolidated total revenues were a record $3.1 billion, up 8% year over year, while consolidated gross profit grew 6% and adjusted EBITDA increased 7% [6][11] Business Segment Data and Key Metrics Changes - Franchised dealership segment revenues reached $3.1 billion, up 9% year over year, driven by an 11% increase in new retail volume and a 6% increase in fixed operations revenues [6] - EchoPark segment income was a record $10.3 million, with adjusted EBITDA at $15.8 million, up 116% year over year [8] - EchoPark revenues were $560 million, flat year over year, but gross profit increased 21% to $64 million [9] - Power Sports segment generated record revenues of $34.4 million, with a gross profit of $8.5 million, and an adjusted EBITDA loss of $700,000 [10] Market Data and Key Metrics Changes - Same store new vehicle gross profit per unit (GPU) was $3,089, down sequentially from the fourth quarter [7] - Same store used vehicle volume decreased 2% year over year, while same store used GPU increased sequentially to $15.55 per unit [7] - Parts and service gross profit increased by 7% in the first quarter [8] Company Strategy and Development Direction - The company is focused on maintaining strong relationships with teammates, manufacturers, and customers as key to future success [5] - A data-driven centralized inventory management strategy for EchoPark is seen as a key differentiator to minimize market volatility disruptions [10] - The company plans to adapt to ongoing changes in the automotive retail environment while making strategic decisions to maximize long-term returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating tariff impacts and believes that the automotive industry can handle price adjustments without significant concerns [17][20] - The company is focused on executing its operational playbooks and processes, expecting solid results in the upcoming quarters [18][19] - Management acknowledged the need to balance warranty and customer pay work in service operations to improve revenue mix [50][51] Other Important Information - The company ended the quarter with $947 million in available liquidity, including $430 million in cash and floor plan deposits [11] - A quarterly cash dividend of $0.35 per share was approved, payable on July 15, 2025 [11] Q&A Session Summary Question: Commentary on tariffs and their impact - Management indicated that manufacturers are uncertain about the tariff impacts, but they expect things to stabilize in the next 90 days [17] - The company is not concerned about significant price increases and believes they can navigate through the situation [19] Question: Update on fixed operations hiring - Management reported hiring 345 additional technicians, which has positively impacted fixed operations [23][24] - There is ongoing focus on increasing technician headcount to meet service demand [26] Question: Used vehicle GPU trajectory - Management stated that GPU margins should hold steady if market conditions remain stable, with EchoPark's margins improving due to increased street purchases [38][39] Question: Warranty work versus customer pay - Warranty work grew by 40% in the first quarter, while customer pay grew by only 2-3%, indicating a need to adjust the revenue mix [47][50] Question: EchoPark's full-year guidance - Management explained that guidance was conservative due to potential tariff impacts, but they are prepared to adjust as conditions evolve [77][78] Question: SG&A expenses - Management noted that first-quarter SG&A expenses were influenced by one-time compensation costs, but overall expenses are in line with expectations [82][84]

Group 1 Automotive (GPI) Q1 2025 Earnings Call April 24, 2025 10:00 AM ET Company Participants Pete DeLongchamps - Senior Vice President, Manufacturer Relations, Financial Services & Public AffairsDaryl Kenningham - CEO, President & DirectorDaniel McHenry - Senior VP & CFORajat Gupta - Executive Director, AutosDaniela Haigian - Vice President - Equity ResearchDavid Whiston - Equity Strategist - U.S. AutosBret Jordan - Managing DirectorThomas Wendler - AssociateRon Jewsikow - Director Conference Call Partici ...

Financial Data and Key Metrics Changes - GAAP EPS was $2.04 per share, and adjusted EPS was $1.48 per share, a 9% increase year over year [6] - First quarter consolidated total revenues were a record $3.1 billion, up 8% year over year, while consolidated gross profit grew 6% and adjusted EBITDA increased 7% [7][12] Business Line Data and Key Metrics Changes - Franchised dealership segment generated record revenues of $3.1 billion, up 9% year over year, driven by an 11% increase in new retail volume and a 6% increase in fixed operations revenues [7] - EchoPark segment income was a record $10.3 million, with adjusted EBITDA at $15.8 million, up 116% year over year; EchoPark revenues were $560 million, flat year over year, but gross profit increased 21% [9][10] - Power Sports segment generated record revenues of $34.4 million, with a gross profit of $8.5 million, and a segment adjusted EBITDA loss of $700,000 [11] Market Data and Key Metrics Changes - Same store new vehicle gross profit per unit (GPU) was $3,089, down sequentially from the fourth quarter due to luxury brand mix [8] - Same store used vehicle volume decreased 2% year over year, while same store used GPU increased sequentially to $15.55 per unit [8] - EchoPark segment total gross profit per unit was a record $3,411, up $456 per unit year over year [10] Company Strategy and Development Direction - The company is focused on maintaining strong relationships with teammates, manufacturers, and customers as key to future success [6] - The data-driven centralized inventory management strategy for EchoPark is seen as a key differentiator to minimize disruptions from market volatility [10] - The company plans to adapt to ongoing changes in the automotive retail environment and macroeconomic backdrop while making strategic decisions to maximize long-term returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current tariff environment, stating that they expect things to settle down in the next 90 days [18] - The company is focused on executing its playbooks and processes, believing that they can handle the challenges posed by tariffs [19] - Management noted that they are well-positioned to resume disciplined long-term growth for EchoPark once used vehicle market conditions improve [10] Other Important Information - The company ended the quarter with $947 million in available liquidity, including $430 million in cash and floor plan deposits [12] - A quarterly cash dividend of $0.35 per share was approved, payable on July 15, 2025 [12] - The company updated or withdrew certain items in its previous financial guidance for 2025 due to uncertainty around the effects of tariffs on the automotive industry [12] Q&A Session Summary Question: Commentary on tariffs and their impact - Management indicated that manufacturers are uncertain about the impact of tariffs, but they expect to navigate the situation effectively [18][19] Question: Update on fixed operations hiring - Management confirmed the hiring of 345 technicians, which has positively impacted fixed operations, and they plan to continue hiring [24][26] Question: Used vehicle GPU trajectory - Management stated that margins should hold steady if market conditions remain stable, with EchoPark's margins improving due to increased street purchases [39][40] Question: Warranty work metrics - Warranty work grew by 40% in the first quarter, while customer pay growth was only 2-3%, indicating a need to balance the mix better [48][49] Question: EchoPark's guidance and tariff impact - Management explained that they are being conservative with guidance due to potential tariff impacts, but they are optimistic about future performance [72][80] Question: SG&A expenses - Management noted that first quarter SG&A expenses were in line with expectations, with no systematic changes driving them higher [84][86] Question: EchoPark's inventory management - Management expressed confidence in their ability to manage inventory effectively and adapt to market conditions, including potential tariff impacts [92][94]

Group 1: Trade and Market Impact - Investors showed relief on April 22 due to signs of easing trade tensions, with hints from President Trump and Treasury Secretary Scott Bessent about potential reductions in the 145% tariffs on Chinese goods [1] - The positive developments regarding tariffs have led to a bullish market trend since April 22, with expectations of further gains as more tariff-related good news is anticipated [2] Group 2: Stock Screening and Recommendations - A screening process has been designed to identify stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks, incorporating the price/sales ratio as a complementary valuation metric [3] - The screening criteria include a net upgrade in ratings, percentage change in earnings estimates, price-to-sales ratio, stock price above $5, average daily volume over 100,000 shares, and market capitalization in the top 3000 [4][5] Group 3: Featured Stocks - Avis Budget operates as a leading vehicle rental operator with a fleet of nearly 695,000 vehicles, benefiting from strong demand in North America [6] - ABM Industries provides integrated facility solutions and has a strong earnings surprise history, with an average beat of 9.6% over the last four quarters [7] - CVR Energy focuses on renewable energy and petroleum refining, committed to developing renewable biofuels [9] - Delek US Holdings is an independent refiner with significant competitive advantages in the Permian Basin, achieving an average earnings beat of 22.3% [10][11] - Asbury Automotive Group's diversified product mix and e-commerce platform, Clicklane, are driving growth and improving its risk profile [11][12]

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $7.94, a 34.8% increase year-over-year, and adjusted diluted earnings of $7.66, a 25.4% increase, marking the first quarterly year-over-year adjusted earnings increase since Q4 2022 [7][10]. - Total revenues grew to a record $9.2 billion, a 7% increase from Q1 of the previous year [10]. - Adjusted SG&A as a percentage of gross profit was 68.2%, a 120 basis point decline from the prior year [42]. Business Line Data and Key Metrics Changes - New vehicle units increased by 3.6% year-over-year, while total unit sales increased by 1.5% [33]. - After-sales gross profit increased by 7.5%, with warranty work showing a 19.7% year-over-year increase [37][38]. - Financing operations delivered income of $12.5 million compared to a loss of $1.7 million in the same period last year [44]. Market Data and Key Metrics Changes - The company operates within one of the largest and least consolidated industries, with a current market share of just over 1% and a target of reaching 5% [24][17]. - The diversified omnichannel ecosystem spans retail, digital, and fleet channels across North America and the UK, with offerings ranging from new vehicles to twenty-year-old value autos [13]. Company Strategy and Development Direction - The focus for 2025 is on executing the strategy to build customer loyalty and expand market share, with a commitment to achieving $2 in EPS for every $1 billion in revenue [10][20]. - The company aims to maintain a balanced capital allocation strategy, targeting a minimum after-tax return of 15% on acquisitions [21][23]. - The strategy includes optimizing the network by acquiring larger automotive retail stores in profitable regions and leveraging digital channels [24][26]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable performance and capture market share despite potential tariff impacts [10][12]. - The management noted that the operational success is driven by store leaders' autonomy to adapt quickly to local demand [11][12]. - The company remains focused on disciplined cost management and enhancing efficiencies across the business [41][43]. Other Important Information - The company repurchased $146 million, or nearly 2% of its outstanding shares, at attractive valuations during the first quarter [23]. - The company ended the quarter with a net leverage of 2.5 times, in line with its long-term target [51]. Q&A Session Summary Question: Current tariff environment and its impact - Management noted that over 45% of inventory is not impacted by current tariffs, positioning the company favorably compared to peers [59]. - Inventory levels have decreased significantly, with a drop of almost ten days supply quarter-over-quarter [60]. Question: Communication with factory partners and M&A environment - There has been clear communication from manufacturers regarding pricing stability through the 2025 model year, with no major changes in the M&A environment noted [74]. Question: Expectations for front-end gross profit and market share - Management indicated that the design of the ecosystem allows for a potential upward price inflection rather than downward, with expectations for used vehicle gross profit to grow over time [80][82]. Question: Impact of tariffs on after-sales business - Management believes that most customers will need to repair their cars regardless of tariffs, minimizing the impact on the after-sales business [110][112]. Question: Capital allocation and acquisition targets - The company is targeting $2 billion in acquired revenues for the year, with ongoing evaluations of share repurchases and acquisitions [114].

Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $7.94, a 34.8% year-over-year increase, and adjusted diluted earnings of $7.66, reflecting a 25.4% increase [6][9] - Revenues reached a record $9.2 billion, representing a 7% increase from Q1 of the previous year [9][10] - Adjusted EBITDA for the first quarter was $402.1 million, a 17.1% year-over-year increase [31] Business Line Data and Key Metrics Changes - Total unit sales increased by 1.5% year-over-year, with new vehicle units up 3.6% and used vehicles down slightly by 0.4% [22][23] - Aftersales revenue increased by 2.4%, with gross profit from aftersales up 7.5% [24] - Financing operations reported income of $12.5 million compared to a loss of $1.7 million in the same period last year [29] Market Data and Key Metrics Changes - The company noted a significant improvement in value auto sales, which increased by 38.8% year-over-year [23] - The inventory balance decreased by $163 million, with new vehicle days sales outstanding (DSO) decreasing from 59 days to 43 days [25] Company Strategy and Development Direction - The focus for 2025 is on executing the strategy to build customer loyalty and growth, with an emphasis on operational performance and market share expansion [7][14] - The company aims to achieve $2 in EPS for every $1 billion in revenue, with a disciplined approach to acquisitions and capital allocation [16][18] - The omnichannel strategy is designed to enhance customer engagement and streamline operations across retail, digital, and fleet channels [10][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to adapt to tariff impacts and emphasized the importance of maintaining affordability in their product mix [10][42] - The company is optimistic about the growth potential in the aftersales segment, which is expected to benefit from ongoing demand for repairs and maintenance [70][71] - Management highlighted the importance of disciplined cost management and operational execution to drive profitability [27][28] Other Important Information - The company repurchased $146 million of its outstanding shares in the first quarter, representing nearly 2% of its float [15][31] - The transition of Adam Chamberlain from COO to CEO of Mercedes Benz USA was acknowledged, reflecting the strength of partnerships within the industry [19] Q&A Session Summary Question: Current tariff environment and its impact on demand and GPU - Management noted that over 45% of inventory is not impacted by current tariffs, positioning the company favorably compared to peers [37][38] Question: Communication from factory partners regarding tariffs - Clear communication has been received from manufacturers, with guarantees on holding prices through May for most OEMs [50] Question: Balancing front-end gross profit with market share - The company aims to create transparent experiences for consumers, which may lead to an upward price inflection rather than downward [53] Question: Impact of tariffs on aftersales business margins - Management believes that the need for repairs will sustain demand, minimizing the impact of tariffs on aftersales margins [70][71] Question: Capital allocation and acquisition targets - The company expects to focus on $2 billion in acquired revenue for the year, with ongoing share buybacks [72][73]

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence in investing [1][2] Zacks Style Scores - Zacks Style Scores are complementary indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the next 30 days [3][4] - Each stock receives a rating from A to F based on its characteristics, with A being the highest score indicating a better chance of outperforming [4] Value Score - The Value Score identifies attractive and discounted stocks using ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, appealing to value investors [4] Growth Score - The Growth Score focuses on a company's financial strength and future outlook, analyzing projected and historical earnings, sales, and cash flow to find stocks with sustainable growth [5] Momentum Score - The Momentum Score helps investors capitalize on price trends by analyzing short-term price changes and earnings estimate revisions [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investing strategies [7] Zacks Rank - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to assist investors in building successful portfolios [8] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [9] Stock Example: Lithia Motors - Lithia Motors, Inc. is a leading automotive retailer in the U.S., offering 52 vehicle brands across 459 locations in the U.S., U.K., and Canada [13] - Currently rated 3 (Hold) with a VGM Score of B, it has a Value Style Score of B, supported by a forward P/E ratio of 8.56, making it attractive to value investors [14] - Recent earnings estimates for fiscal 2025 have been revised higher, with the Zacks Consensus Estimate increasing by $0.06 to $34.51 per share, alongside an average earnings surprise of 2% [14]

On this news, CarMax's stock price fell $13.61 per share, or 17%, to close at $66.45 per share on April 10, 2025. The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, London, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomeran ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Asbury Automotive Group (ABG) as a strong value stock based on various financial metrics [2][8]. Group 1: Company Overview - Asbury Automotive Group (ABG) currently holds a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential for investors [4]. - The stock is trading at a P/E ratio of 8.41, which is slightly below the industry average of 8.51 [4]. - ABG's Forward P/E has fluctuated between 6.61 and 11.25 over the past 12 months, with a median of 8.39 [4]. Group 2: Financial Ratios - ABG has a P/B ratio of 1.23, which is significantly lower than the industry average of 2.18, suggesting a favorable valuation [5]. - The P/S ratio for ABG is 0.25, compared to the industry's average of 0.26, indicating that the stock is reasonably valued based on sales [6]. - The P/CF ratio for ABG stands at 7.79, which is lower than the industry average of 9.88, further supporting the notion of undervaluation [7]. Group 3: Investment Potential - The combination of ABG's strong earnings outlook and favorable financial ratios suggests that the stock is likely undervalued at the moment, making it an attractive option for value investors [8].

Core Insights - CarMax reports a steady increase in consumer interest for used electric vehicles (EVs) over the last three years, with a 40% drop in average used EV prices during the same period, indicating a shift towards EV adoption [3][8] - The percentage of searches for "electric vehicle" on carmax.com has nearly doubled from January 2022 to February 2025, with notable spikes in March 2022 and June 2024 [3][8] - The Tesla Model 3 and Model Y remain the most popular EVs, while the Ford F-150 Lightning and Rivian R1T have entered the top ten list for the first time [4][8] Consumer Trends - The most traded-in vehicles for EVs at CarMax are sedans and coupes, with Toyota being the top brand traded in, followed by Honda and Ford [5] - The Tesla Model 3 is the top traded-in model for an EV, with many owners transitioning to the larger Tesla Model Y [5] Regional Insights - Oregon has surpassed California as the state with the highest percentage of EV sales relative to total vehicle sales at CarMax, with California and Washington following [6][8] - New states such as Utah, New Mexico, Minnesota, and New Jersey have entered the top ten list for EV sales compared to total vehicle sales [6] Financial Performance - In the fiscal year ending February 28, 2025, CarMax sold approximately 790,000 used vehicles and 540,000 wholesale vehicles at auctions, with CarMax Auto Finance originating over $8 billion in receivables [9]