Value
9.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.8 |
| P/S | 10.0 |
| EV/EBITDA | 6.9 |
| Fwd P/E | 9.8 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 6.1x
- ▸PEG: 0.35
- ▸Attractively valued
GPI · Why this verdict
Why Group 1 Automotive (GPI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has missed consensus EPS estimates in three consecutive quarters—by 1.79%, 7.29%, and 2.57% respectively in the three most recent reports—after a single beat in the oldest quarter observed, indicating a deteriorating ability to meet expectations. Earnings | Over 12 months, earnings surprises should turn positive for at least 2 consecutive quarters before the investment thesis can be re-evaluated constructively. | →Stable |
| CounterThe most recent miss of just 1.79% is the smallest of the three, suggesting the miss severity may be narrowing; if the trend continues compressing, a return to beats could be near. | ||
At a forward P/E of 6.9x and a PEG ratio of 0.39, the stock screens as deeply inexpensive, offering a potential margin of safety if the operational headwinds prove temporary rather than structural. Valuation breakdown | Over 12 months, the forward P/E should re-rate toward 15x or higher as earnings recover, reflecting improved market confidence in the business trajectory. | →Stable |
| CounterA cheap multiple on declining earnings and contracting revenue is a classic value trap characteristic; without a catalyst for revenue recovery, estimates may be cut again, making even the current low multiple look misleading. | ||
Revenue declined 2% year-over-year, confirming the business is shrinking rather than growing and reducing the fundamental support for any recovery in earnings or multiple. Growth breakdown | Revenue growth should turn positive on a year-over-year basis for 2 consecutive quarters, demonstrating that the contraction has stabilized. | →Stable |
| CounterLow valuation multiples often precede an industry cyclical recovery; if sector demand rebounds, revenue could inflect positive without requiring company-specific action. | ||
The stock is below its 200-day moving average with the average declining at -4.0% per 30 days, and volume is distributing with a falling OBV, confirming sellers are in control and the long-term trend remains negative. Momentum breakdown | Price should recover above the 200-day moving average and hold for at least 2 consecutive months, with RSI recovering above 50, to signal trend restoration. | →Stable |
| CounterMACD is described as improving, and momentum sits just below the key threshold, suggesting the downtrend may be in its final stages before a potential reversal. | ||
The company has missed consensus EPS estimates in three consecutive quarters—by 1.79%, 7.29%, and 2.57% respectively in the three most recent reports—after a single beat in the oldest quarter observed, indicating a deteriorating ability to meet expectations.
→StableEarnings
- Expectation
- Over 12 months, earnings surprises should turn positive for at least 2 consecutive quarters before the investment thesis can be re-evaluated constructively.
CounterThe most recent miss of just 1.79% is the smallest of the three, suggesting the miss severity may be narrowing; if the trend continues compressing, a return to beats could be near.
At a forward P/E of 6.9x and a PEG ratio of 0.39, the stock screens as deeply inexpensive, offering a potential margin of safety if the operational headwinds prove temporary rather than structural.
→StableValuation breakdown
- Expectation
- Over 12 months, the forward P/E should re-rate toward 15x or higher as earnings recover, reflecting improved market confidence in the business trajectory.
CounterA cheap multiple on declining earnings and contracting revenue is a classic value trap characteristic; without a catalyst for revenue recovery, estimates may be cut again, making even the current low multiple look misleading.
Revenue declined 2% year-over-year, confirming the business is shrinking rather than growing and reducing the fundamental support for any recovery in earnings or multiple.
→StableGrowth breakdown
- Expectation
- Revenue growth should turn positive on a year-over-year basis for 2 consecutive quarters, demonstrating that the contraction has stabilized.
CounterLow valuation multiples often precede an industry cyclical recovery; if sector demand rebounds, revenue could inflect positive without requiring company-specific action.
The stock is below its 200-day moving average with the average declining at -4.0% per 30 days, and volume is distributing with a falling OBV, confirming sellers are in control and the long-term trend remains negative.
→StableMomentum breakdown
- Expectation
- Price should recover above the 200-day moving average and hold for at least 2 consecutive months, with RSI recovering above 50, to signal trend restoration.
CounterMACD is described as improving, and momentum sits just below the key threshold, suggesting the downtrend may be in its final stages before a potential reversal.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Three consecutive quarterly earnings misses, contracting revenue, a confirmed price downtrend, and sub-floor business quality combine to make the investment case unappealing; the attractively low forward multiple is a value trap risk rather than a margin of safety without evidence of operational stabilization.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.7 |
| ROA | 4.0 |
| Gross margin | 0.0 |
| Op margin | 1.8 |
| Net margin | 0.7 |
| Current ratio | 3.8 |
| FCF quality | 6.3 |
| Moat | 3.1 |
| Piotroski F | 4.4 |
- ▸No competitive moat
Growth
3.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
| EPS growth | 4.4 |
- ▸Declining revenue: -2%
Momentum
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 6.9 |
- ▸Capitulation risk (RSI 24, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -5.4%/30d — confirmed downtrend
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.1 |
| Price target | 9.5 |
| erm sentiment | 4.4 |
- ▸Analyst upside: 51%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.1 |
| quality rank | 3.6 |
| growth rank | 2.2 |
Technical
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.2 |
| support resistance | 8.3 |
| 52w position | 1.9 |
| gap | 5.0 |
Risk (lower is worse)
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.2 |
| days to cover | 5.3 |
| volatility | 2.6 |
| put call | 0.0 |
| implied vol | 4.3 |
| beta | 8.1 |
| debt equity | 3.0 |
- ▸Elevated put/call: 9.17
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 2.3 |
| dividend safety | 7.0 |
- ▸Earnings concerns: 1B/3M
- ▸Dividend: 76.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- ASYMMETRY:3.9>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:20d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.4<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
3.92
Upside
+31.1%
Downside
7.9%
Sizing output
AVOID
SetupOversold Bounce — Oversold RSI 24, near Bollinger lower, volume surge
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -41% (>40% off 52w high)
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 9.2 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.4<4.5.
The strongest dimensions are Value at 9.2, Sentiment at 7.2, and Technical at 6.1; the weakest are Momentum at 2.4, Quality at 3.1, and Growth at 3.2. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 3.92 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Three Quarter Earnings Miss Streak
Trip ifEPS surprise rises above 0% for 2 consecutive quarters.
- P2Revenue Contraction
Trip ifRevenue growth rises above 0% for 2 consecutive quarters.
- P3Confirmed Downtrend Falling Volume
Trip ifRSI rises above 50 and price holds above the 200-day moving average for 2 consecutive months.
- P4Deep Value Discount
Trip ifForward P/E rises above 15x from the current 6.9x for 2 consecutive quarters.