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GPI, Group 1 Automotive

Group 1 Automotive runs a chain of franchised car dealerships, selling new and used vehicles in the United States and the United Kingdom. Alongside the vehicle, each store arranges financing and insurance for the buyer and runs parts-and-service bays that repair the cars it sells. The bulk of the revenue comes from putting vehicles in driveways; the service work and the finance desk are the smaller, higher-margin lines.

We sell and/or lease new and used cars and light trucks; arrange related vehicle financing; sell service and insurance contracts; provide automotive maintenance and repair services; and sell vehicle parts retail and wholesale.

We have operations in geographically diverse markets that extend across 17 states in the U.S. and 62 towns and cities in the U.K.

Latest annual: FY2025 10-K

GPI · Group 1 Automotive

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$22.6B

+13.2% YoY · 16% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $22.5B 5-yr avg $18.0B

Gross margin 16% 5-yr avg 17%

Operating margin 3.3% 5-yr avg 5.3%

ROIC 9% 5-yr avg 14%

Owner-earnings margin 2% 5-yr avg 3%

Free cash flow margin 1% 5-yr avg 3%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is U.S. (74%) and U.K. (26%).
What moves the needle: This is a high-volume, thin-margin trade, and the filing calls the industry highly competitive — so the test is whether anything beyond the manufacturer's franchise separates one dealer group from the next. The question a value investor asks is whether the parts-and-service bays and the finance desk throw off enough durable, repeat profit to make the whole worth more than the sum of its lots, and whether added scale buys a real cost edge rather than just more stores to run. The business also rides the credit and car-buying cycle, leans on borrowed money, and is exposed to tariffs on imported trucks and parts — so a downturn, a refinancing, or a policy shift can squeeze a model that earns little on each dollar of sales. See the record below for the margins, returns, and leverage.
Is it a good business?: Return on capital has sat near the cost of capital (median 13%). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.

Where the money comes from

read the 10-K →

U.S. is 74% of revenue, with U.K. the other meaningful segment at 26%.

Revenue by reportable segment, FY2025

U.S.74%$16.6B
U.K.26%$5.9B

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$10.9B	$11.1B	$11.6B	$11.6B	$10.6B	$13.5B	$16.2B	$17.9B	$19.9B	$22.6B	$22.5B	RevenueRevenue
15%	15%	15%	15%	16%	18%	18%	17%	16%	16%	16%	Gross marginGross mgn
11%	11%	11%	11%	11%	11%	11%	11%	11%	11%	11%	SG&A / revenueSG&A/rev
$340M	$342M	$341M	$358M	$496M	$884M	$1.1B	$969M	$909M	$734M	$743M	Operating incomeOp. inc.
3.1%	3.1%	2.9%	3.1%	4.7%	6.6%	6.7%	5.4%	4.6%	3.3%	3.3%	Operating marginOp. mgn
$147M	$213M	$158M	$174M	$287M	$552M	$752M	$602M	$498M	$325M	$327M	Net incomeNet inc.
35%	3%	23%	24%	23%	24%	24%	25%	24%	28%	28%	Effective tax rateTax rate
											Cash flow & returns
$384M	$197M	$270M	$371M	$805M	$1.3B	$586M	$190M	$586M	$695M	$628M	Operating cash flowOp. cash
$51M	$58M	$67M	$72M	$76M	$79M	—	—	—	—	$79M	DepreciationDeprec.
$165M	($94M)	$26M	$107M	$411M	$600M	($193M)	($432M)	$63M	$340M	$190M	Working capital & otherWC & other
$157M	$216M	$141M	$192M	$103M	$144M	$156M	$185M	$245M	$270M	$302M	CapexCapex
1.4%	1.9%	1.2%	1.7%	1.0%	1.1%	1.0%	1.0%	1.2%	1.2%	1.3%	Capex / revenueCapex/rev
$333M	$139M	$203M	$299M	$730M	$1.2B	$492M	$87M	$471M	$564M	$549M	Owner earningsOwner earn.
3.1%	1.2%	1.7%	2.6%	6.9%	8.8%	3.0%	0.5%	2.4%	2.5%	2.4%	Owner earnings marginOE mgn
$228M	($19M)	$129M	$179M	$702M	$1.1B	$430M	$5M	$341M	$425M	$326M	Free cash flowFCF
2.1%	−0.2%	1.1%	1.5%	6.6%	8.3%	2.7%	0.0%	1.7%	1.9%	1.5%	Free cash flow marginFCF mgn
$57M	$109M	$135M	$143M	$1M	$1.1B	$529M	$366M	$1.3B	$547M	$532M	AcquisitionsAcquis.
$20M	$21M	$21M	$20M	$11M	$24M	$24M	$25M	$25M	$26M	$26M	Dividends paidDiv. paid
$128M	$40M	$184M	$1M	$80M	$211M	$521M	$173M	$162M	$555M	—	BuybacksBuybacks
10%	14%	11%	10%	14%	17%	19%	15%	12%	8%	9%	ROICROIC
16%	19%	14%	14%	20%	30%	34%	22%	17%	12%	12%	Return on equityROE
14%	17%	12%	12%	19%	29%	33%	22%	16%	11%	11%	Retained to equityRetained/eq
											Balance sheet
$21M	$29M	$16M	$24M	$69M	$15M	$48M	$57M	$34M	$33M	$42M	Cash & investmentsCash+inv
$1.7B	$1.8B	$1.8B	$1.9B	$1.4B	$1.1B	$1.4B	$2.0B	$2.6B	$2.7B	$2.7B	InventoryInvent.
$356M	$413M	$419M	$528M	$430M	$458M	$488M	$499M	$738M	$733M	$720M	Accounts payablePayables
$1.3B	$1.4B	$1.4B	$1.4B	$1.0B	$615M	$869M	$1.5B	$1.9B	$2.0B	$2.0B	Operating working capitalOper. WC
$2.2B	$2.3B	$2.4B	$2.5B	$2.0B	$1.7B	$2.0B	$2.8B	$3.5B	$3.7B	$3.5B	Current assetsCur. assets
$2.1B	$2.2B	$2.4B	$2.4B	$1.8B	$1.5B	$1.9B	$2.5B	$3.4B	$3.4B	$3.7B	Current liabilitiesCur. liab.
1.0×	1.1×	1.0×	1.0×	1.1×	1.1×	1.0×	1.1×	1.0×	1.1×	0.9×	Current ratioCurr. ratio
$877M	$913M	$964M	$995M	$997M	$1.4B	$1.7B	$1.7B	$2.1B	$2.2B	$2.1B	GoodwillGoodwill
$4.5B	$4.9B	$5.0B	$5.6B	$5.1B	$5.7B	$6.7B	$7.8B	$9.8B	$10.3B	$10.1B	Total assetsAssets
$1.3B	$1.4B	$1.4B	$1.5B	$1.3B	$2.0B	$2.1B	$2.1B	$2.9B	$3.7B	$3.2B	Total debtDebt
$1.3B	$1.3B	$1.4B	$1.5B	$1.3B	$2.0B	$2.0B	$2.1B	$2.9B	$3.7B	$3.1B	Net debt / (cash)Net debt
$930M	$1.1B	$1.1B	$1.3B	$1.4B	$1.8B	$2.2B	$2.7B	$3.0B	$2.8B	$2.8B	Shareholders’ equityEquity
0.2%	0.2%	0.2%	0.2%	0.3%	0.2%	0.2%	0.1%	0.1%	0.1%	0.1%	Stock comp / revenueSBC/rev
											Per share
21.2M	20.4M	19.5M	17.9M	17.8M	17.7M	15.5M	13.7M	13.2M	12.7M	11.9M	Shares out (diluted)Shares
$514.29	$544.61	$596.13	$646.62	$595.30	$760.73	$1047.02	$1301.34	$1504.49	$1772.08	$1891.76	Revenue / shareRev/sh
$6.95	$10.45	$8.11	$9.70	$16.09	$31.15	$48.50	$43.80	$37.59	$25.53	$27.55	EPS (diluted)EPS
$15.72	$6.79	$10.43	$16.69	$40.97	$66.62	$31.76	$6.32	$35.55	$44.28	$46.24	Owner earnings / shareOE/sh
$10.75	$-0.94	$6.63	$9.99	$39.43	$62.97	$27.78	$0.35	$25.75	$33.33	$27.48	Free cash flow / shareFCF/sh
$0.94	$1.00	$1.07	$1.13	$0.62	$1.35	$1.53	$1.83	$1.90	$2.01	$2.15	Dividends / shareDiv/sh
$7.39	$10.57	$7.25	$10.69	$5.80	$8.10	$10.04	$13.50	$18.50	$21.20	$25.41	Cap. spending / shareCapex/sh
$43.94	$55.05	$56.30	$70.01	$81.41	$102.99	$144.41	$194.72	$224.48	$218.97	$239.03	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+14.7%/yr	+24.4%/yr
Owner earnings / share	+12.2%/yr	+1.6%/yr
EPS	+15.6%/yr	+9.7%/yr
Dividends / share	+8.8%/yr	+26.6%/yr
Capital spending / share	+12.4%/yr	+29.6%/yr
Book value / share	+19.5%/yr	+21.9%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

13Mpeak FY2016

ROIC

8%low FY2025

Gross margin

16%low FY2016

Net debt ÷ owner earnings

6.5×peak FY2023

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$564Mowner earningsvs.$325Mnet incomelow FY2023

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $564M of owner earnings, the operating cash left after the $131M it takes just to hold its position. It put $139M more into growth; free cash flow, after that spending, was $425M.

Reported net income$325M

Owner earnings$564M · 2% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$325M	$498M	$602M	$752M	$552M
Depreciation & amortizationnon-cash charge added back	—	—	—	—	+$79M
Stock-based compensationreal costnon-cash, but a real cost	+$29M	+$25M	+$20M	+$27M	+$28M
Working capital & othertiming of cash in and out, other non-cash items	+$340M	+$63M	−$432M	−$193M	+$600M
Cash from operations	$695M	$586M	$190M	$586M	$1.3B
Maintenance capital expenditurethe spending needed just to hold position and volume	−$131M	−$115M	−$103M	−$94M	−$79M
Owner earnings	$564M	$471M	$87M	$492M	$1.2B
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$139M	−$130M	−$82M	−$62M	−$65M
Free cash flow	$425M	$341M	$5M	$430M	$1.1B
Owner-earnings marginowner earnings ÷ revenue	2%	2%	0%	3%	9%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $131M, roughly its depreciation, the rate its assets wear out). The other $139M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $29M), owner earnings is nearer $535M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

Interest expense not tagged in the data

What this means
No usable interest-expense line was tagged in the filing data, but the balance sheet carries real net debt — so the interest burden here is unknown, not absent. Read the debt on the net-debt check below.
How heavy is the debt, net of cash? $3.7B · 5.0× operating profit

Heavy net debt

Cash $33M − debt $3.7B

What this means
Netting $33M of cash and short-term investments against $3.7B of debt leaves $3.7B owed, about 5.0× a year's operating profit (5.1× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 12%

Solid through the cycle

10-yr median, range 8%–19%; 8% latest = NOPAT $529M ÷ invested capital $6.5B

Industry peers: median 13%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 8% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 2%

Thin through the cycle

10-yr median margin, range 0%–9%; latest $616M = operating cash $695M − maintenance capex $79M

Industry peers: median 3%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 3% of revenue this year, a 2% median across 10 years. Treating stock comp as the real expense it is (less $29M of SBC) leaves $587M.
Are earnings backed by cash? 2.14×

Cash-backed

Cash from ops $695M ÷ net income $325M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 94%

Returns most of it

Dividends + buybacks $580M ÷ Owner Earnings $616M

What this means
Of $616M Owner Earnings, $580M (94%) went back to shareholders, $26M dividends, $555M buybacks. Net of $29M stock comp, the real buyback was about $526M. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 3.42×

Expanding

Capex $270M ÷ depreciation $79M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $22.6B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.08×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $3.7B vs $260M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +175%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $39.92/share (latest year $27.33), the averaged base the calculator's gate runs on, and book value is $234.41/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 3 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 3% → 4% (3-yr avg ends)

In the filing’s words The filing claims pricing power in its strongest form — price raised, volume held — yet the margin here has not widened to match. The claim leads the record; weigh them together.

What this means
Through the cycle the operating margin widened — about 3% early to 4% lately, median 3% — pricing power intact or improving.
Reinvestment, incremental ROIC 11%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth +9%/yr

What this means
Owner earnings grew about 9% a year over the record.
Worst year 2018 · 2.9% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −5.5%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing Framed as a capability

The filing positions AI as something the company uses, not something it fears.

“We continue to invest in technology, data and process improvements that enhance both customer and employee efficiency, including centralized customer experience enhancements from digital retailing tools such as AI-enabled appointment setting and virtual F&I solutions.”

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$3.5B

Cash & short-term investments$42M
Inventory$2.7B
Other current assets$738M

Current liabilities$3.7B

Accounts payable$720M
Other current liabilities$3.0B

Current ratio0.95×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.21×stricter: inventory excluded

Cash ratio0.01×strictest: cash alone against what's due

Working capital($194M)the cushion left after near-term bills

Revenue, latest quarter vs. a year ago−1.8%the freshest read on whether the business is still growing

Current ratio, recent quarters1.0× → 0.9×

Deeper floors

Tangible book value$713Mequity stripped of goodwill & intangibles

Debt incl. operating leases$232M$232M of it operating leases; with finance leases, “total fixed claims” below reaches $4.3B (annual-report basis)

Deferred revenue$2Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$260M

'27$244M

'28$926M

'29$318M

'30$1.6B

later$388M

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$260Mthe first rung: what must be repaid or rolled over within the year

Within two years$504Mthe near wall, the part most exposed to today’s credit conditions

Biggest single year$1.6Bin 2030the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$3.7Bevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$42M

One year of owner earnings (FY2025)$616M

Together, against $260M due next year2.5×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $657M against the $260M due in the twelve months after the Dec 31, 2025 schedule: 2.5 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the total the table states.

Lease obligations

the lease note, SEC EDGAR →

Debt by another name. What the business owes on the property, aircraft, stores and equipment it rents rather than owns is a fixed claim due on a schedule; added back to the debt, it is the true leverage. That ladder, operating and finance leases together, and what it adds to the debt on the page above.

Operating leasesFinance leases

'26$91M

'27$99M

'28$112M

'29$117M

'30$81M

later$300M

Lease payments by year, scaled to the largest; “later” is everything beyond year five, shown apart. These are the contractual cash payments, before the interest the filing imputes back out to the balance-sheet liability.

Due in the next 12 months$91Ma fixed cash payment, owed whether or not the business has a good year

Total lease payments$800Mevery year plus the tail, undiscounted: the full cash the leases will take

On the balance sheet$585Mthe present value of those payments, the recognised lease liability

True leverage: debt plus leases

On-balance-sheet debt$3.7B

Lease obligations (present value)$585M

Total fixed claims on the business$4.3B

Counting the leases the way Buffett does, the fixed claims on this business come to $4.3B, of which the leases are 14%. The lease wall above and the debt schedule together are the calendar of what must be paid, and when.

Lease ladder read from the ASC 842 tags in the company’s Dec 31, 2025 annual report and reconciled: the yearly buckets sum to the undiscounted total, which less the imputed interest equals the balance-sheet liability; a ladder that doesn’t tie out is withheld.

How the cash was used, 2016–2025

Over the record, the business generated $5.3B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$1.8B · 34%
Dividends$216M · 4%
Buybacks$2.1B · 38%
Retained (debt / cash)$1.3B · 24%

Returned to owners$2.3B
50% of the owner earnings the business produced over the span, $216M as dividends and $2.1B as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $1.9B and cash and short-term investments rose $21M.
Average price paid for buybacks—
Buybacks ran $2.1B over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−43.9%
The diluted count fell from 21M to 12M, so the buybacks outran the stock issued to staff.
Dividend record$2.01/sh
Paid in 10 of the years on record, the per-share dividend growing about 9% a year. It was cut at least once along the way.
Return on what it retained10%
Of the earnings it kept rather than paid out ($1.4B over the span), annual owner earnings (first three years vs last three) grew $149M, so each retained $1 added about 0.10 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill$2.2B21% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity79%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$4.3Bover 10 years buying other businesses, against $1.8B of capital spent building

$93M written down across 1 year (2025): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Earl Hesterberg	$8.6M	$19.1M	$1.2B
2022	Earl Hesterberg	$8.8M	$8.5M	$492M
2023	Daryl Kenningham	$7.3M	$14.0M	$87M
2024	Daryl Kenningham	$8.7M	$16.6M	$471M
2025	Daryl Kenningham	$11.1M	$10.0M	$564M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership2.4%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$29M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Group 1 Automotive is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

2 of the 6 tests turned up something to look into; the other 4 came back clean.

Look hereDid debt outgrow the business?$1.3B → $3.2B
Debt rose from $1.3B to $3.2B while owner earnings went from about $225M to $374M — about 5.7 years of owner earnings in debt then, about 8.4 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereAre "one-time" charges a yearly habit?10 of 10 years
Management took an impairment or write-down in 10 of the last 10 years, $604M in all. A charge taken almost every year is not one-time; it is the business — past deals coming due, and an admission the assets were worth less than what was paid. Munger's rule: when the "one-time" keeps happening, it is the business. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Auto Dealers & Services

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
PAGPenske Automotive	$31.8B	16%	3.7%	13%	3%
ANAutoNation	$27.6B	18%	4.3%	14%	2%
KMXCarMax	$25.9B	12%	5.3%	4%	0%
GPIGroup 1 Automotive	$22.6B	16%	3.9%	13%	3%
CVNACarvana	$20.3B	14%	-0.7%	-3%	-17%
MUSAMurphy USA	$19.4B	90%	3.6%	20%	3%
ABGAsbury Automotive Group Inc	$18.0B	17%	4.8%	14%	4%
CASYCasey's General	$17.6B	67%	4.3%	11%	4%
Group median	—	17%	4.1%	13%	3%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Group 1 Automotive has delivered.

Today’s price $

Through the cycle, Group 1 Automotive earns about $599M on its 2.7% median owner-earnings margin. This year’s 2.7% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($599M) Net of stock comp (−$32M) Steady-state · maintenance capex ($549M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−11%/yr

Owner-earnings growth · ’16→’25+16%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $326M on 12M shares outstanding, per the 10-Q cover, as of 2026-04-24; net debt $3.1B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($302M) runs well above depreciation ($79M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $549M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh GPI against another business →

Cite: Owner Scorecard, "Group 1 Automotive (GPI), the owner's record," https://ownerscorecard.com/c/GPI, data as of 2026-07-09.

Manual order: ← GPGI its page in the Manual GPK →

Industry order: ← EVGO the Auto Dealers & Services chapter HTZ →