NEW YORK (TheStreet) -- Group 1 Automotive (GPI) shares rose 6.4% to $69.12 on Thursday following the release of the company's first quarter earnings results.
The automotive retailer reported first quarter net income of $31.3 million, or $1.19 per diluted share, beating analysts consensus estimates by 15 cents per share.
Year over year quarterly revenue increased 15.1% to $2.3 billion, beating analysts estimates of $2.08 billion.
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TheStreet Ratings team rates GROUP 1 AUTOMOTIVE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate GROUP 1 AUTOMOTIVE INC (GPI) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels, growth in earnings per share, increase in net income and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 17.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- GROUP 1 AUTOMOTIVE INC has improved earnings per share by 15.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, GROUP 1 AUTOMOTIVE INC increased its bottom line by earning $4.31 versus $4.19 in the prior year. This year, the market expects an improvement in earnings ($5.54 versus $4.31).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 26.8% when compared to the same quarter one year prior, rising from $17.13 million to $21.72 million.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: GPI Ratings Report