Key Takeaways Raymond James to report fiscal Q2 (ended March 31) on April 22; earnings seen at $2.76 and sales at $3.75B.RJF trading revenues are expected to be strong as client activity and volatility jumped.Raymond James' NII estimate is $539.8M, up 28.8% year over year, with lending and steadier deposit costs. Raymond James (RJF - Free Report) is set to announce second-quarter fiscal 2026 (ended March 31) results on April 22, after market close. The company’s earnings and revenues are expected to have risen on a year-over-year basis.
In the last reported quarter, RJF’s earnings surpassed the Zacks Consensus Estimate. Results benefited primarily from an increase in revenues and robust growth in assets under administration balances. However, higher expenses were the undermining factor.
Raymond James does not have an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in only two of the trailing four quarters, with the average beat being 1.85%.
The Zacks Consensus Estimate for the company’s fiscal second-quarter earnings is currently pegged at $2.76, unchanged over the past seven days. The figure indicates an increase of 14.1% from the year-ago quarter.
The consensus estimate for sales of $3.75 billion suggests 10.2% year-over-year growth.
Management expects fiscal second-quarter asset management and related administrative fees to grow 1% sequentially, driven by 3% rise in PCG assets and fee-based accounts at quarter's end, partially offset by the impact of two fewer billing days in the quarter.
Factors to Impact Raymond James’ Q2 EarningsInvestment Banking (IB) Fees: Deal-making activity was robust in the to-be-reported quarter despite the Middle Eastern conflict and the ensuing uncertainty about its impact on the economy in the last month of the quarter. While global mergers and acquisitions (M&As) volume declined year over year, deal value rose as big transactions dominated the space. Unlike 2025, when President Donald Trump’s announcement of ‘Liberation Day’ tariff plans led to the deal drought for several months, this time, companies acknowledged that volatility is part of life, and they will have to do business around it. Lower capital costs and a focus on scale and AI integration drove the M&As. Thus, Raymond James’ advisory fees are expected to have been positively impacted.
The quarter saw decent IPO activity, with issuance volume improving despite fewer companies getting listed. On the other hand, global bond issuance volume was solid. Thus, RJF’s underwriting fees are expected to have been positively impacted.
The consensus estimate for RJF’s IB fees is pegged at $215.5 million, relatively stable on a year-over-year basis.
Trading Revenues: The performance of RJF’s trading business is expected to have been strong in the to-be-reported quarter, supported by increased client activity and market volatility. Major factors that influenced trading business in the quarter included shifting expectations around AI, rising geopolitical tensions, particularly concerns over the Middle East and the risk of an oil shock, persistent inflation concerns and uncertainty around the Fed’s monetary policy stance. Volatility was high in equity markets and other asset classes, including commodities, bonds and foreign exchange.
Net Interest Income (NII): The Federal Reserve kept interest rates unchanged in the quarter. However, relatively lower rates, a solid lending scenario and stabilizing funding/deposit costs are expected to have offered much-needed support. Hence, Raymond James’ NII might have witnessed a modest improvement in the quarter.
The Zacks Consensus Estimate for NII is pegged at $539.8 million, indicating a year-over-year jump of 28.8%.
Including the full impact of the October and December 2025 rate cuts and assuming unchanged quarter-end balances (net of the $1.8 billion fiscal second-quarter fee billing collections), management expects the aggregate of NII and RJBDP third-party fees in the second fiscal quarter to decline 3% sequentially.
Expenses: Raymond James consistently hires advisors and invests in franchises. Thus, overall expenses are expected to have increased in the to-be-reported quarter. Due to a highly competitive environment and inflationary pressure, expenses are likely to have risen.
Major Developments During the QuarterIn March, Raymond James completed the acquisition of a majority interest in GreensLedge Holdings LLC, a boutique investment bank recognized for its expertise in structured credit and securitization. Founded in 2008, GreensLedge is known for advising on and arranging CLOs, CDOs, Rated Feeders, CFOs, ABS and a range of debt offerings.
In January, Raymond James agreed to acquire Clark Capital Management Group, a Philadelphia-based asset management company with more than $46 billion in discretionary assets under management and non-discretionary assets. The deal is anticipated to close by the third quarter of 2026 and is subject to regulatory approvals and closing conditions. Clark Capital has established a powerful brand and provides wealth-oriented investment solutions.
What the Zacks Model Unveils for Raymond JamesOur proven model does not conclusively predict that RJF will beat the Zacks Consensus Estimate this time. This is because it doesn’t have the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Raymond James is 0.00%.
Zacks Rank: The company currently has a Zacks Rank #3.
Finance Stocks Worth ConsideringHere are a couple of finance stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around.
Capital One (COF - Free Report) is scheduled to report quarterly results on April 21. The company has an Earnings ESP of +1.76% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Over the past seven days, the Zacks Consensus Estimate for Capital One’s quarterly earnings has been lowered to $4.61.
The Earnings ESP for East West Bancorp (EWBC - Free Report) is +0.44%, and it carries a Zacks Rank #3. The company is also slated to report first-quarter 2026 results on April 21.
Over the past seven days, the Zacks Consensus Estimate for East West Bancorp’s quarterly earnings has remained unchanged at $2.46.
Raymond James Financial is an American multinational independent investment bank and financial services company. The company has already increased its dividend for 14 consecutive years. Its 10-year dividend growth rate of 15.3% is impressive. Raymond James has an outstanding financial position. Its long-term debt/equity ratio is 0.3. As good as that is, it belies the company's true financial strength.
ST. PETERSBURG, Fla., April 22, 2026 (GLOBE NEWSWIRE) --
Record quarterly net revenues of $3.86 billion, up 13% over the prior year’s fiscal second quarter and 3% over the preceding quarterQuarterly net income available to common shareholders of $542 million, or $2.72 per diluted share; quarterly adjusted net income available to common shareholders of $564 million(1), or $2.83 per diluted share(1)Domestic Private Client Group net new assets(2) of $23.0 billion for the fiscal second quarter, or annualized growth from beginning of quarter assets of 5.8%Client assets under administration of $1.76 trillion, up 15% over March 2025 and down 1% compared to December 2025Record quarter-end Private Client Group assets in fee-based accounts of $1.04 trillion, up 20% over March 2025 and up slightly over December 2025Record net bank loans of $54.8 billion; Securities-based loans of $23.0 billion, up 31% over March 2025 and 6% over December 2025Annualized return on common equity and annualized adjusted return on tangible common equity of 17.3% and 20.9%(1), respectively, for the fiscal second quarter Raymond James Financial, Inc. (NYSE: RJF) today reported net revenues of $3.86 billion and net income available to common shareholders of $542 million, or $2.72 per diluted share, for the fiscal second quarter ended March 31, 2026. Quarterly adjusted net income available to common shareholders, which excluded $22 million of acquisition-related expenses, net of tax, was $564 million(1), or $2.83 per diluted share(1).
“We generated record results for the first half of the fiscal year by leveraging the firm’s expertise and resources to support advisors and their clients during this period of market uncertainty. Our ongoing focus and disciplined execution have led to record PCG fee-based assets and annualized net new asset growth of 7% for the first half of the fiscal year,” said CEO Paul Shoukry. “We continue to develop industry-leading technology solutions, including increasing AI integration, to improve efficiency and provide our financial professionals with more time to serve their clients. Looking ahead, financial advisor recruiting activity across all our affiliation options remains robust, and the investment banking pipeline continues to be strong.”
Record quarterly net revenues increased 13% over the prior year’s fiscal second quarter, largely driven by continued growth in asset management and related administrative fees which increased 17% to over $2.0 billion. Compared to the preceding quarter, net revenues reflect strong growth in investment banking revenues and higher brokerage revenues. Quarterly pre-tax income increased 1% over the preceding quarter while net income available to common shareholders decreased 4% due to a higher effective tax rate. For the fiscal second quarter, annualized return on common equity and annualized adjusted return on tangible common equity were 17.3% and 20.9%(1), respectively.
For the first six months of the fiscal year, record net revenues of $7.59 billion increased 9%, record earnings per diluted share of $5.51 increased 6%, and record adjusted earnings per diluted share of $5.69(1) increased 6% over the first six months of fiscal 2025. The Private Client Group and Asset Management segments generated record net revenues in the first six months of fiscal 2026. The Asset Management and Bank segments produced record pre-tax income during the same period. Annualized return on common equity was 17.7% and annualized adjusted return on tangible common equity was 21.2%(1).
Segment Results
Private Client Group
Record quarterly net revenues of $2.81 billion, up 13% over the prior year’s fiscal second quarter and 2% over the preceding quarterQuarterly pre-tax income of $416 million, down 3% compared to the prior year’s fiscal second quarter and 5% compared to the preceding quarterDomestic Private Client Group net new assets(2) of $23.0 billion for the fiscal second quarter, or annualized growth from beginning of the quarter assets of 5.8%Private Client Group assets under administration of $1.70 trillion, up 15% over March 2025 and down 1% compared to December 2025 Record quarter-end Private Client Group assets in fee-based accounts of $1.04 trillion, up 20% over March 2025 and up slightly over December 2025Total clients’ domestic cash sweep and Enhanced Savings Program balances of $57.8 billion, approximating the prior year’s fiscal second quarter level and down 1% compared to the preceding quarter Quarterly net revenues rose 13% year-over-year primarily driven by higher asset management and related administrative fees which grew 17% to $1.71 billion, mainly due to market appreciation and net inflows into PCG fee-based accounts. Pre-tax income declined year-over-year primarily due to the impact of lower interest-related revenues and certain costs associated with our continued investments in growth.
Capital Markets
Quarterly net revenues of $464 million, up 17% over the prior year’s fiscal second quarter and 22% over the preceding quarterQuarterly investment banking revenues of $272 million, up 31% over the prior year’s fiscal second quarter and 36% over the preceding quarter Quarterly pre-tax income of $51 million Quarterly net revenues increased 17% over the prior year period, driven predominantly by higher debt and equity underwriting revenues. Sequentially, quarterly net revenues grew 22% largely due to higher debt and equity underwriting revenues, M&A and advisory revenues and fixed income brokerage revenues. During the quarter, we completed the acquisition of GreensLedge Holdings LLC.
Asset Management
Record quarterly net revenues of $327 million, up 13% over the prior year’s fiscal second quarter and just above the preceding quarter Quarterly pre-tax income of $137 million, up 13% over the prior year’s fiscal second quarter and down 4% compared to the preceding quarterRecord quarter-end financial assets under management of $282.4 billion, up 15% over March 2025 and 1% over December 2025 Record quarterly net revenues increased 13% year-over-year largely driven by higher financial assets under management due to market appreciation and net inflows into fee-based accounts in the Private Client Group.
Bank
Quarterly net revenues of $486 million, up 12% over the prior year’s fiscal second quarter and approximating the preceding quarter levelQuarterly pre-tax income of $166 million, up 42% over the prior year’s fiscal second quarter and down 4% compared to the preceding quarterRecord net bank loans of $54.8 billion, up 14% over March 2025 and 3% over December 2025Bank segment net interest margin (“NIM”) of 2.81% for the quarter, up 14 basis points over the prior year’s fiscal second quarter and unchanged from the preceding quarter Net bank loans grew 14% over the prior year quarter, driven by continued growth in securities-based and residential mortgage loans, which rose by 31% and 10%, respectively. Bank segment net interest income increased 13% over the prior year quarter due to loan growth, lower funding costs driven by the decline in short-term interest rates, and a favorable mix shift in assets. NIM remained stable with the preceding quarter at 2.81%. The credit quality of the loan portfolio remains strong.
Other Matters
The effective tax rate for the quarter was 26.0%, which includes the unfavorable impact of nondeductible losses in the corporate-owned life insurance portfolio in the quarter.
During the fiscal second quarter, the firm repurchased $400 million of common stock at an average price of $155 per share, and paid $81 million to redeem preferred stock. As of March 31, 2026, $1.5 billion remained available under the Board’s approved common stock repurchase authorization. At the end of the quarter, the total capital ratio was 24.0%(3) and the tier 1 leverage ratio was 12.4%(3), both well above regulatory requirements.
A conference call to discuss the results will take place today, Wednesday, April 22, at 5:00 p.m. ET. The live audio webcast, and the presentation which management will review on the call, will be available at www.raymondjames.com/investor-relations/financial-information/quarterly-earnings. An audio replay of the call will be available at the same location for 30 days. For a listen-only connection to the conference call, please dial: 888-330-3573 (conference code: 3778589).
Click here to view full earnings results, earnings supplement, and earnings presentation.
About Raymond James Financial, Inc.
Raymond James Financial, Inc. (NYSE: RJF) is a leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. Total client assets are $1.76 trillion. Public since 1983, the firm is listed on the New York Stock Exchange under the symbol RJF. Additional information is available at www.raymondjames.com.
Forward-Looking Statements
Certain statements made in this press release may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future strategic objectives, business prospects, anticipated savings, financial results (including expenses, earnings, liquidity, cash flow and capital expenditures), industry or market conditions (including changes in interest rates and inflation), demand for and pricing of our products (including cash sweep and deposit offerings), anticipated timing and benefits of our acquisitions, and our level of success integrating acquired businesses, anticipated results of litigation, regulatory developments, and general economic conditions. In addition, future or conditional verbs such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the Securities and Exchange Commission (the “SEC”) from time to time, including our most recent Annual Report on Form 10-K, and subsequent Quarterly Report on Form 10-Q and Current Reports on Form 8-K, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.
On April 22, 2026, Raymond James Financial Inc RJF released its 8-K filing for the fiscal second quarter ended March 31, 2026, posting record net revenues of $3.86 billion and diluted EPS of $2.72. The company reported adjusted diluted EPS of $2.83. Raymond James Financial Inc (RJF) is a diversified financial services firm that provides wealth management, investment banking, asset management, and capital markets services to individuals, corporations, and municipalities. Its wealth management franchise generates the bulk of revenues and earnings through a network of more than 8,900 advisors who managed over $1.7 trillion in client assets as of fiscal year-end 2025, with over 90% of revenue derived in the United States.
The company’s diluted EPS was $2.72, which is above the estimated EPS of 2.71. Adjusted diluted EPS was $2.83, which is above the estimated EPS of 2.71. Net revenues were $3,859 million, which is below the estimated revenue of $3,867.15 million.
Quarter highlights and why they matter Raymond James Financial Inc RJF delivered record quarterly net revenues, up 13% year over year and 3% sequentially, supported by a 17% rise in asset management and related administrative fees to $2.02 billion. Investment banking revenues increased 29% year over year and 34% sequentially to $279 million, reflecting stronger activity in debt and equity underwriting and improved advisory trends.
At quarter end, client assets under administration were $1.76 trillion, up 15% from March 2025 and down 1% from December 2025, underscoring both market sensitivity and the firm’s asset gathering. Domestic Private Client Group net new assets were $23.0 billion, representing a 5.8% annualized growth rate from beginning-of-quarter assets. Record fee-based assets reached $1.04 trillion, up 20% from March 2025 and slightly higher than December 2025. These fee-based balances are important to asset and wealth managers because they drive recurring revenue streams and help smooth earnings through market cycles.
Selected metrics Metric Q2 FY2026 YoY change QoQ change Net revenues $3,859M +13% +3% Pre-tax income $735M +10% +1% Net income to common $542M +10% (4)% Diluted EPS (GAAP) $2.72 +15% (3)% Adjusted diluted EPS $2.83 +17% (1)% Asset mgmt & admin fees $2,016M +17% +1% Total brokerage revenues $643M +11% +5% Investment banking revenues $279M +29% +34% Client assets under administration $1.76T +15% vs Mar-2025 (1)% vs Dec-2025 PCG fee-based assets $1.04T +20% vs Mar-2025 Up slightly vs Dec-2025 Domestic PCG net new assets $23.0B — — Net bank loans $54.8B +14% vs Mar-2025 +3% vs Dec-2025 Securities-based loans $23.0B +31% vs Mar-2025 +6% vs Dec-2025 Bank NIM 2.81% +14 bps Unchanged Return on common equity 17.3% Up from 16.4% Down from 18.0% Effective tax rate 26.0% ~Flat vs 26.2% Up from 22.7%Management commentaryWe generated record results for the first half of the fiscal year by leveraging the firm’s expertise and resources to support advisors and their clients during this period of market uncertainty. Our ongoing focus and disciplined execution have led to record PCG fee-based assets and annualized net new asset growth of 7% for the first half of the fiscal year.We continue to develop industry-leading technology solutions, including increasing AI integration, to improve efficiency and provide our financial professionals with more time to serve their clients. Looking ahead, financial advisor recruiting activity across all our affiliation options remains robust, and the investment banking pipeline continues to be strong.Income statement and margin dynamics Total revenues were $4.26 billion, while interest expense declined 9% year over year and 9% sequentially, resulting in net revenues of $3.86 billion. Compensation, commissions and benefits rose 15% year over year to $2.54 billion, lifting the total compensation ratio to 65.8% from 64.8% a year ago. Pre-tax margin was 19.0%, down from 19.7% a year ago and 19.5% in the prior quarter, reflecting higher compensation and continued investment in growth. The effective tax rate rose to 26.0%, up from 22.7% in the prior quarter, which contributed to a 4% sequential decline in net income to common despite higher pre-tax income.
For the first six months of fiscal 2026, net revenues were $7.59 billion, up 9% year over year. Diluted EPS was $5.51, up 6% year over year. Adjusted diluted EPS was $5.69, up 6% year over year. Diluted EPS of $5.51 compares to the annual EPS estimate of 11.48. Net revenues of $7,594 million compare to the annual revenue estimate of 15,718.50 million.
Segment performance Private Client Group: Net revenues were a record $2.81 billion, up 13% year over year and 2% sequentially, led by a 17% increase in asset management and related administrative fees to $1.71 billion. Pre-tax income declined 3% year over year and 5% sequentially, pressured by lower interest-related revenues and growth investments. Total domestic sweep and Enhanced Savings balances were $57.8 billion, roughly flat year over year and down 1% sequentially.
Capital Markets: Net revenues were $464 million, up 17% year over year and 22% sequentially. Investment banking revenues were $272 million, up 31% year over year and 36% sequentially, as debt and equity underwriting improved, complemented by gains in advisory and fixed income brokerage. The company completed the acquisition of GreensLedge Holdings LLC during the quarter.
Asset Management: Segment net revenues reached a record $327 million, up 13% year over year and slightly above the prior quarter. Pre-tax income was $137 million, up 13% year over year and down 4% sequentially. Quarter-end financial assets under management were a record $282.4 billion, up 15% from March 2025 and up 1% from December 2025, benefiting from market appreciation and net inflows into fee-based accounts.
Bank: Net revenues were $486 million, up 12% year over year and approximately flat sequentially. Pre-tax income was $166 million, up 42% year over year and down 4% sequentially. Net bank loans reached a record $54.8 billion, driven by securities-based and residential mortgage growth. Net interest margin was 2.81%, up 14 basis points year over year and unchanged sequentially, supported by loan growth, lower funding costs, and a favorable asset mix. Credit quality remained strong.
Balance sheet, capital, and shareholder returns Raymond James Financial Inc RJF maintained robust capital levels, with a total capital ratio of 24.0% and a tier 1 leverage ratio of 12.4%, both above regulatory requirements. During the quarter, the company repurchased $400 million of common stock at an average price of $155 per share and redeemed $81 million of preferred stock. As of March 31, 2026, $1.5 billion remained available under the repurchase authorization. These actions highlight ongoing capital return capacity while supporting growth in fee-based assets and bank lending.
Why the quarter matters to investors The quarter underscores the firm’s core strength in fee-based wealth management and asset gathering, which deliver recurring revenues and earnings resilience. The rebound in investment banking added cyclical upside. However, a higher compensation ratio and the elevated tax rate constrained margin expansion, and lower interest-related revenues in wealth management remain a headwind. Client assets under administration declined 1% sequentially, reflecting market sensitivity that can affect near-term fee levels. Even so, record fee-based assets, consistent net new asset growth, and expanding securities-based lending provide multiple revenue drivers aligned with the asset and wealth management industry’s secular trends.
GuruFocus Valuation Check The GF Value for Raymond James Financial Inc RJF is $161.13 versus a current price of $154.41, indicating the shares appear 4.2% undervalued based on GuruFocus’ proprietary model. This suggests a modest discount relative to estimated intrinsic value.
The company’s GF Score is 86/100, which is considered strong. A 9/10 Growth Rank points to healthy top-line and bottom-line expansion potential, while a 6/10 Profitability Rank indicates solid, though not peak, margin efficiency for the group. Financial Strength is 5/10, consistent with a diversified financial firm balancing lending growth, capital requirements, and shareholder returns. Predictability at 5 stars and a Moat Score of 6/10 suggest historically consistent operating performance and a competitive position supported by scale in wealth management and capital markets.
Insiders sold approximately $5.0 million of stock over the last three months with no reported insider buying, a data point that can be interpreted as a note of caution for near-term sentiment. For a deeper dive, visit the Raymond James Financial Inc stock page on GuruFocus.
Explore the complete 8-K earnings release (here) from Raymond James Financial Inc for further details.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Raymond James Financial, Inc. (RJF - Free Report) came out with quarterly earnings of $2.83 per share, beating the Zacks Consensus Estimate of $2.76 per share. This compares to earnings of $2.42 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +2.69%. A quarter ago, it was expected that this company would post earnings of $2.83 per share when it actually produced earnings of $2.86, delivering a surprise of +1.06%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Raymond James Financial, which belongs to the Zacks Financial - Investment Bank industry, posted revenues of $3.86 billion for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 2.95%. This compares to year-ago revenues of $3.4 billion. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Raymond James Financial shares have lost about 3.8% since the beginning of the year versus the S&P 500's gain of 3.2%.
What's Next for Raymond James Financial?While Raymond James Financial has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Raymond James Financial was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.89 on $3.78 billion in revenues for the coming quarter and $11.73 on $15.39 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Investment Bank is currently in the bottom 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, Evercore (EVR - Free Report) , has yet to report results for the quarter ended March 2026. The results are expected to be released on April 29.
This investment bank is expected to post quarterly earnings of $5.57 per share in its upcoming report, which represents a year-over-year change of +59.6%. The consensus EPS estimate for the quarter has been revised 17% lower over the last 30 days to the current level.
Evercore's revenues are expected to be $1.23 billion, up 75.4% from the year-ago quarter.
Raymond James Financial, Inc. (RJF - Free Report) reported $3.86 billion in revenue for the quarter ended March 2026, representing a year-over-year increase of 13.4%. EPS of $2.83 for the same period compares to $2.42 a year ago.
The reported revenue represents a surprise of +2.95% over the Zacks Consensus Estimate of $3.75 billion. With the consensus EPS estimate being $2.76, the EPS surprise was +2.69%.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Raymond James Financial performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Net Interest Margin: 2.8% versus 2.7% estimated by two analysts on average.Assets Under Management: $282.4 billion versus $284.75 billion estimated by two analysts on average.Private Client Group Asset Under Management: $1.7 billion compared to the $1.71 billion average estimate based on two analysts.Total Interest-Earning Assets: $82.41 billion versus $82.53 billion estimated by two analysts on average.Revenues- Asset management and related administrative fees: $2.02 billion compared to the $2.02 billion average estimate based on three analysts. The reported number represents a change of +16.9% year over year.Revenues- Interest income: $960 million compared to the $965.7 million average estimate based on three analysts. The reported number represents a change of -0.3% year over year.Revenues- Investment banking: $279 million compared to the $215.49 million average estimate based on three analysts. The reported number represents a change of +29.2% year over year.Net interest Income: $557 million compared to the $539.81 million average estimate based on three analysts. The reported number represents a change of +32.9% year over year.Revenues- Other: $53 million versus $41.8 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +32.5% change.Net Revenues- Total brokerage revenues: $643 million compared to the $626.72 million average estimate based on three analysts. The reported number represents a change of +10.9% year over year.Revenues- Account and service fees: $311 million compared to the $305.94 million average estimate based on three analysts. The reported number represents a change of -3.1% year over year.Private Client Group- Asset Management and Related Administrative Fees: $1.71 billion compared to the $1.72 billion average estimate based on two analysts. The reported number represents a change of +17.4% year over year.View all Key Company Metrics for Raymond James Financial here>>>
Shares of Raymond James Financial have returned +6.3% over the past month versus the Zacks S&P 500 composite's +8.6% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Raymond James Financial Inc (RJF) Q2 2026 Earnings Call Highlights: Record Revenues and Strategic Investments in AI Raymond James Financial Inc (RJF) reports a strong quarter with record revenues and significant investments in technology to drive future growth. Summary
Revenue: Record quarterly revenues of $3.86 billion, up 13% year-over-year and 3% sequentially.Pre-tax Income: $735 million, a 10% increase from the prior-year quarter and 1% above the preceding quarter.Net Income: $542 million, with earnings per diluted share of $2.72.Adjusted Net Income: $564 million, resulting in adjusted earnings per diluted share of $2.83.Pre-tax Margin: 19%, with an adjusted pre-tax margin of 19.7%.Return on Common Equity: Annualized return of 17.3%.Return on Tangible Common Equity: Annualized adjusted return of 20.9%.Client Assets Under Administration: $1.7 trillion, a 15% year-over-year increase.Net New Assets: $23 billion, representing a 5.8% annualized growth rate.Bank Loans: Record $54.8 billion, with a 31% year-over-year increase in securities-based lending balances.Share Repurchase: $400 million of common stock repurchased at an average price of $155 per share.Tier 1 Leverage Ratio: 12.4%.Compensation Expense: $2.54 billion, with a total compensation ratio of 65.8%.Non-compensation Expenses: $583 million, a 10% increase year-over-year.Total Assets: $91.9 billion, a 3% increase from the preceding quarter.
Release Date: April 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points Raymond James Financial Inc RJF reported record quarterly revenues of $3.86 billion, a 13% increase over the prior-year quarter.The Private Client Group ended the quarter with $1.7 trillion of client assets under administration, reflecting a 15% year-over-year growth.The company recruited financial advisors with trailing 12-month production totaling $141 million and nearly $21 billion of client assets, marking the second highest quarterly result in its history.Raymond James Financial Inc (RJF) is investing over $1.1 billion annually in technology, including AI, to enhance efficiencies and client experience.The Capital Markets segment saw improved results, driven by stronger investment banking revenues and a robust pipeline for future growth. Negative Points Client assets under administration in the Private Client Group were slightly down compared to the preceding quarter.The pretax income in the Private Client Group declined 3% year over year due to the impact of interest rate reductions.Net interest income in the Bank segment was nearly offset by the impact of two fewer interest-earning days and prior quarter interest rate cuts.Non-compensation expenses increased by 10% over the year-ago quarter, reflecting higher operational costs.The effective tax rate for the quarter was 26%, higher than the estimated rate for fiscal 2026, due to nondeductible losses on the corporate-owned life insurance portfolio. Q & A Highlights Q: Can you discuss the competitive environment in the Private Client Group (PCG) and your confidence in the recruiting pipeline?
A: Paul Shoukry, CEO: Our confidence is driven by the volume of home office visits and new commitments from prospective advisers. We're seeing an uptick in our employee affiliation option. Despite competitive pressures, our focus remains on being the best destination for financial advisers and their clients, which has led to strong retention and recruiting momentum.
Q: How do you view the impact of AI on your business, particularly regarding cash sweep optimization?
A: Paul Shoukry, CEO: AI is seen as a net positive, helping advisers provide more personalized advice. The industry has already seen cash balances move to higher-yielding alternatives without AI. We don't see AI as a significant incremental threat to our business model, as personal relationships remain crucial.
Q: Can you elaborate on your technology spending priorities and how you gauge the success of AI initiatives?
A: Paul Shoukry, CEO: The majority of our $1.1 billion technology spend focuses on the Private Client Group. Success is gauged through feedback from our Technology Advisory Council, composed of financial advisers. Our technology is designed to support advisers and enhance client relationships.
Q: What is the outlook for your Capital Markets pipeline, and how does it compare to earlier in the year?
A: Paul Shoukry, CEO: We have a strong investment banking pipeline, with March being particularly strong. Despite market volatility, we have motivated buyers and sellers, and our platform and expertise position us well to convert this pipeline into revenues.
Q: How do you see AI impacting long-term profitability and margins?
A: Paul Shoukry, CEO: While AI offers potential for efficiency and productivity gains, it's too early to quantify its impact on margins. We're exploring agentic AI for process improvements, but specific margin benefits are still preliminary.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Key Takeaways RJF Q2 earnings beat estimates, with adjusted EPS up 16.9% y/y.Record net revenues rose 13.4% y/y, driven by growth across all major segments.Expenses climbed 14.3% y/y, reflecting increases across nearly all cost components. Raymond James’ (RJF - Free Report) second-quarter fiscal 2026 (ended March 31) adjusted earnings of $2.83 per share beat the Zacks Consensus Estimate of $2.76. Also, the bottom line increased 16.9% from the prior-year quarter.
Results benefited primarily from an increase in revenues to record levels. Robust growth in assets under administration balances further supported results. However, an increase in expenses was a headwind.
Net income available to common shareholders (GAAP basis) was $542 million or $2.72 per share, up from $493 million or $2.36 in the prior-year quarter.
RJF’s Revenues Improve, Expenses RiseNet revenues were a record $3.86 billion, up 13.4% year over year. The top line beat the Zacks Consensus Estimate of $3.75 billion.
Segment-wise, in the reported quarter, the Private Client Group recorded 13% year-over-year growth in net revenues. Asset Management’s net revenues also rose 13%, while Capital Markets’ top line increased 17%. Bank registered a rise of 12% from the prior year's net revenues, while Others recorded negative revenues.
Non-interest expenses jumped 14.3% from the prior-year quarter to $3.12 billion. The increase was due to a rise in all cost components except for bank loan provision for credit losses.
As of March 31, 2026, client assets under administration were $1.76 trillion, up 15% from the prior-year period. Financial assets under management of $282.4 billion grew 15% year over year.
RJF’s Balance Sheet & Capital Ratios StrongAs of March 31, 2026, Raymond James had total assets of $91.9 billion, up 3% from the prior-quarter end. Total common equity was $12.6 billion, up 1% from the previous quarter.
Book value per share was $64.58, up from $59.74 as of March 31, 2025.
As of March 31, 2026, the total capital ratio was 24%, down from 24.8% as of March 31, 2025. The Tier 1 capital ratio was 22.9% compared with 23.5% as of March 31, 2025.
Return on common equity (annualized basis) was 17.3% at the end of the reported quarter compared with 16.4% a year ago.
Update on Raymond James’ Share RepurchasesIn the reported quarter, RJF repurchased shares worth $400 million at an average price of $155 per share.
As of March 31, 2026, $1.5 billion remained available under the repurchase authorization.
Our Take on Raymond JamesRaymond James’ global diversification efforts, along with its strategic acquisitions (completed the buyout of a majority interest in GreensLedge Holdings in March 2026 and announced a deal to acquire Clark Capital Management Group in January), are expected to keep supporting top-line growth in the near term. Also, a robust capital markets business is a positive for the company. However, elevated operating expenses remain a major concern.
Currently, Raymond James carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of RJF’s PeersMorgan Stanley’s (MS - Free Report) first-quarter 2026 earnings were $3.43 per share, which outpaced the Zacks Consensus Estimate of $3.06. The bottom line jumped 32% from the prior-year quarter.
Morgan Stanley’s results benefited from robust client engagement, strength in investment banking and trading activities, as well as growth in net interest income.
Charles Schwab’s (SCHW - Free Report) first-quarter 2026 adjusted earnings of $1.43 per share outpaced the Zacks Consensus Estimate of $1.38. The bottom line soared 38% year over year.
SCHW’s results benefited from the robust performance of the asset management business and an increase in trading revenues. Higher net interest revenues and solid brokerage account numbers were other positives. However, an increase in expenses was the undermining factor.
Raymond James Financial (NYSE:RJF) reported record fiscal second-quarter 2026 results, with management emphasizing resilient performance amid a “challenging and volatile market environment,” continued advisor recruiting momentum, and record balances in key areas including bank loans and fee-based assets.
Record revenue and earnings metrics CEO Paul Shoukry said the firm’s performance reflected “disciplined execution” and a focus on being “the absolute best firm for financial professionals and their clients.” For the quarter, Raymond James posted record quarterly revenues of $3.86 billion, up 13% from the prior-year period and 3% from the preceding quarter. Pre-tax income totaled $735 million, up 10% year-over-year and 1% sequentially.
CFO Butch Oorlog reported net income available to common shareholders of $542 million, or $2.72 per diluted share. Adjusted results, excluding acquisition-related expenses, were $564 million and $2.83 per diluted share. The firm’s pre-tax margin was 19%, with an adjusted pre-tax margin of 19.7%. Oorlog said annualized return on common equity was 17.3% and annualized adjusted return on tangible common equity was 20.9%.
Private Client Group: asset growth, recruiting strength, and margin headwinds Raymond James ended the quarter with $1.7 trillion of Private Client Group (PCG) client assets under administration, “down slightly” versus the preceding quarter but up 15% year-over-year, Shoukry said. Domestic net new assets were $23 billion, representing a 5.8% annualized growth rate for the quarter.
Recruiting remained a focal point. Shoukry said the firm recruited advisors into its domestic independent contractor and employee channels with trailing 12-month production of $141 million and nearly $21 billion of client assets at their prior firms, calling it the “second highest quarterly result” in company history for both recruited production and assets.
During Q&A, Shoukry attributed confidence in the recruiting pipeline to home office visit volume and “the volume of new commits of prospective advisors across our affiliation options,” adding the company is seeing “an uptick of commits in our employee affiliation option as well.” He also described private equity as having been “competitive over the last five years,” and said he had heard of firms that attempted to raise capital in recent months but were unable to do so, which he suggested could influence valuations and potentially become a future catalyst for advisor movement.
Financially, PCG generated pre-tax income of $416 million on record net revenues of $2.81 billion. Oorlog said PCG pre-tax income declined 3% year-over-year primarily due to interest rate reductions over the past year that reduced “non-compensable revenues.” Shoukry also noted that lower short-term rates create a spread-driven headwind to PCG margins as rates decline.
Asked about PCG compensation dynamics, Shoukry pointed to a mix shift in recruiting toward the independent channel, where payouts are higher because advisors cover their own overhead costs, and noted tiered payout grids can increase as production rises.
Capital Markets and Asset Management: improved banking activity and inflows Capital Markets results improved during the quarter. Shoukry said the segment benefited from stronger investment banking revenues and highlighted “a particularly strong performance in the month of March.” Oorlog reported Capital Markets net revenues of $464 million and pre-tax income of $51 million, with year-over-year and sequential growth driven by higher debt and equity underwriting, plus higher M&A and advisory revenues.
Shoukry said the investment banking pipeline was “very promising,” citing activity levels and engagement letters signed, though he cautioned the firm does not know when pipelines will convert to revenues. He said much of the pipeline is driven by financial sponsors, describing “motivated buyers and sellers,” with buyers holding “capital and dry powder” and sellers often beyond original holding periods.
In Asset Management, Shoukry said net inflows into managed fee-based programs within PCG were strong, and Raymond James Investment Management also posted positive net inflows. Oorlog reported Asset Management pre-tax income of $137 million on record net revenues of $327 million, attributing results largely to higher assets under management from market appreciation and “strong net inflows into PCG fee-based accounts.”
Oorlog said asset management and related administrative fees totaled $2.02 billion, up 17% year-over-year and 1% sequentially, and that record PCG fee-based assets ended the quarter at $1.04 trillion, up 20% year-over-year. Looking ahead, he said the firm expects fiscal third-quarter asset management and related administrative fees to be higher by approximately 1% from the second quarter level, driven by one additional billing day and slightly higher quarter-end balances.
Banking: record loans, stable credit, and cash sweep trends Raymond James ended the quarter with record loans of $54.8 billion. Shoukry said growth was “primarily driven by continued outstanding growth in securities-based lending balances,” which increased more than $5 billion, or 31%, year-over-year and 6% sequentially. He added that credit quality “continues to be strong.”
Oorlog reported Banking net revenues of $486 million and pre-tax income of $166 million. He said net interest income increased marginally from the prior quarter, with loan growth largely offset by two fewer interest-earning days and the full-quarter impact of prior-quarter interest rate cuts.
On client cash balances, Oorlog said domestic cash sweep and Enhanced Savings Program balances ended the quarter at $57.8 billion, down 1% sequentially and representing 3.7% of domestic PCG client assets. Based on April activity, he said balances declined due to collection of record quarterly fee billings of approximately $1.9 billion and seasonal tax activity.
During Q&A, Shoukry addressed investor concerns about “agentic AI” tools potentially optimizing cash and pressuring sweep balances. He said the shift into higher-yielding alternatives has been underway since rates rose and “doesn’t require AI,” pointing to offerings such as the Enhanced Savings Program and access to institutional share classes of prime money market funds. Shoukry said sweep balances have “stabilized over the last several quarters,” aside from billing and tax season effects, and he did not see “much more of an incremental threat” from AI in the advised channel.
Technology investment, AI initiatives, acquisitions, and capital return Shoukry reiterated more than $1.1 billion in annual technology spending, saying the “vast majority” is focused on PCG, which he described as a differentiator because the firm does not have to prioritize areas like credit cards and payments. He cited an internal AI operations agent—also referenced later as a solution called “Ray”—that provides natural-language guidance on operational questions and is being piloted with a few hundred advisors and teams, with “extremely positive” early feedback.
On the margin impact of AI, Shoukry said it is “hard to dimension the actual margin impact at this juncture,” calling it “too preliminary” to provide specific cost-reduction or margin-benefit estimates. He framed AI’s long-term benefit as helping advisors deliver more tailored advice while reducing administrative burdens, while arguing that personal client relationships remain central to the advised model.
On M&A, Shoukry said the firm remains committed to enhancing its platform through hiring and acquisitions, citing GreensLedge, which closed late in the quarter, and Clark Capital, which is expected to close in the current quarter. Asked about the potential for a larger deal, Shoukry said the challenge is that “a lot of great competitors…haven’t necessarily been for sale,” adding the firm prefers to “invite other firms to the Raymond James family” rather than pursuing “takeovers.”
Capital actions also featured prominently. Shoukry said the firm repurchased $400 million of common stock at an average share price of $155 and ended the quarter with a Tier 1 leverage ratio of 12.4%. Oorlog said the company returned $507 million to shareholders during the quarter through dividends and buybacks and redeemed all outstanding Series B preferred stock in January for $81 million. Over the past 12 months, Oorlog said the firm repurchased $1.6 billion of common shares and returned over $2 billion to common shareholders including dividends, representing a combined return of 94% of earnings.
Looking ahead on taxes, Oorlog said the quarter’s effective tax rate was 26%, including an unfavorable impact from non-deductible losses on the corporate-owned life insurance portfolio. He maintained an estimated fiscal 2026 effective tax rate of approximately 24% to 25%.
In closing remarks, Shoukry said the company delivered record revenues and record pre-tax income in the first half of the fiscal year and entered the third quarter with “record PCG fee-based assets under administration, record bank loans,” robust recruiting activity, and a strong investment banking pipeline.
About Raymond James Financial (NYSE:RJF) Raymond James Financial is a diversified financial services firm headquartered in St. Petersburg, Florida. Founded in 1962, the company provides a range of services to individual investors, businesses and institutions through a combination of wealth management, capital markets, investment banking, asset management, banking and trust services. Its business model centers on a network of financial advisors and broker-dealer operations that deliver personalized financial planning, investment advisory services and brokerage solutions.
The firm’s core offerings include private client wealth management delivered by independent and employee advisors, equity and fixed-income research, institutional sales and trading, and investment banking services such as mergers and acquisitions advisory and capital raising.
See Also Five stocks we like better than Raymond James Financial
Raymond James Financial is upgraded to a strong buy, driven by robust growth, earnings momentum, low leverage, and compelling valuation. RJF's growth is fueled by advisor network expansion, strong net inflows, and the Clark Capital acquisition, supporting top-line resilience through market cycles. Improving operating margins, AI-driven efficiencies, and consensus EPS growth of 11-12% YoY underpin a bullish earnings outlook, despite interest expense headwinds.
New York, NY, May 12, 2026 (GLOBE NEWSWIRE) -- South Street Securities Holdings Inc. (“South Street”) today announced that it acquired 100% of the outstanding equity in Lime Funding, LLC (“Lime Funding”) on February 28, 2026. Lime Funding is an asset‑backed commercial paper (“ABCP”) conduit designed to make loans to corporate and other institutional borrowers, with funding provided through the issuance of ABCP to investors.
The commercial paper program is supported by Sumitomo Mitsui Trust Bank, Limited (“SuMi TRUST”), as the administrative agent and liquidity provider while GreensLedge Advisors LLC (“GreensLedge”) serves as the sub-administrator responsible for overseeing the commercial paper issuance. Together, South Street, GreensLedge and SuMi TRUST seek to provide efficient, scalable financing to high‑quality borrowers, while offering investors diversified, short‑term asset‑backed investment opportunities.
“Integrating Lime Funding into the South Street platform reflects our strategy of building scalable, balance‑sheet‑efficient funding solutions for our clients,” said James Tabacchi, CEO of South Street Securities Holdings Inc. “By partnering with GreensLedge and Sumitomo, we combine specialized conduit expertise, strong liquidity support and our own distribution and risk management capabilities to better serve issuers and investors.”
Lime Funding will operate as part of South Street’s broader securities finance and funding platform and is expected to support the continued expansion of South Street’s financing capabilities.
About South Street Securities Holdings Inc.
South Street Securities Holdings Inc. operates through its subsidiaries. Affiliates include South Street Securities LLC, a FINRA and SIPC member who holds a FICC Tier 1 membership and is focused on repo dealer financing US Treasuries, Agency MBS, TBA Mortgage Origination Hedging and Algorithmic Trade Execution, Matrix Applications LLC, a technology and back-office services company, AmeriVet Securities, Inc., a FINRA and SIPC member who operates an SEC registered Service-Disabled Veteran-Owned broker-dealer, and GX2 Systems LLC, a fintech software development company that engineers electronic trading solutions for the fixed income and futures markets.
About GreensLedge Advisors LLC
GreensLedge is an investment adviser registered with the U.S. Securities and Exchange Commission. It is an indirect subsidiary of Raymond James Financial, Inc. (NYSE: RJF), a publicly traded, full-service financial services company headquartered in St. Petersburg, Florida.
About Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Trust Bank, Limited forms the core of SuMi TRUST Group, a listed trust bank group in Japan, which excels in numerous trust-related business areas, such as asset management and wealth management. SuMi TRUST Group collectively has one of the largest asset bases in Asia, including both assets under custody and assets under management. With a diverse client base ranging from pension funds and other financial institutions to individuals, SuMi TRUST offers a wide range of investment products, including alternative investment solutions.
Sumitomo Mitsui Trust Bank, Limited & GreensLedge Advisors LLC
Sumitomo Mitsui Trust Bank, Limited & GreensLedge Advisors LLC Logos
Contact Data Colleen Judge South Street Securities Holdings Inc. [email protected]
St. Petersburg, Fla., May 13, 2026 (GLOBE NEWSWIRE) -- On May 13, 2026, the Raymond James Financial, Inc. (NYSE: RJF) Board of Directors declared a quarterly cash dividend on shares of its common stock of $0.54 per share, payable July 15, 2026 to shareholders of record on July 1, 2026.
About Raymond James Financial, Inc.
Raymond James Financial, Inc. (NYSE: RJF) is a leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. Total client assets are $1.76 trillion. Public since 1983, the firm is listed on the New York Stock Exchange under the symbol RJF. Additional information is available at www.raymondjames.com.
Forward-Looking Statements
Certain statements made in this press release may constitute “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning future shareholder distributions. Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from those expressed in the forward-looking statements. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our filings with the Securities and Exchange Commission (the “SEC”) from time to time, including our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are available at www.raymondjames.com and the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update any forward-looking statement in the event it later turns out to be inaccurate, whether as a result of new information, future events, or otherwise.
It has been about a month since the last earnings report for Raymond James Financial, Inc. (RJF - Free Report) . Shares have lost about 2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Raymond James Financial due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
Raymond James Q2 Earnings Beat on Higher Revenues, Cost Woes RemainRaymond James’ second-quarter fiscal 2026 (ended March 31) adjusted earnings of $2.83 per share beat the Zacks Consensus Estimate of $2.76. Also, the bottom line increased 16.9% from the prior-year quarter.
Results benefited primarily from an increase in revenues to record levels. Robust growth in assets under administration balances further supported results. However, an increase in expenses was a headwind.
Net income available to common shareholders (GAAP basis) was $542 million or $2.72 per share, up from $493 million or $2.36 in the prior-year quarter.
Revenues Improve, Expenses RiseNet revenues were a record $3.86 billion, up 13.4% year over year. The top line beat the Zacks Consensus Estimate of $3.75 billion.
Segment-wise, in the reported quarter, the Private Client Group recorded 13% year-over-year growth in net revenues. Asset Management’s net revenues also rose 13%, while Capital Markets’ top line increased 17%. Bank registered a rise of 12% from the prior year's net revenues, while Others recorded negative revenues.
Non-interest expenses jumped 14.3% from the prior-year quarter to $3.12 billion. The increase was due to a rise in all cost components except for bank loan provision for credit losses.
As of March 31, 2026, client assets under administration were $1.76 trillion, up 15% from the prior-year period. Financial assets under management of $282.4 billion grew 15% year over year.
Balance Sheet & Capital Ratios StrongAs of March 31, 2026, Raymond James had total assets of $91.9 billion, up 3% from the prior-quarter end. Total common equity was $12.6 billion, up 1% from the previous quarter.
Book value per share was $64.58, up from $59.74 as of March 31, 2025.
As of March 31, 2026, the total capital ratio was 24%, down from 24.8% as of March 31, 2025. The Tier 1 capital ratio was 22.9% compared with 23.5% as of March 31, 2025.
Return on common equity (annualized basis) was 17.3% at the end of the reported quarter compared with 16.4% a year ago.
Update on Share RepurchasesIn the reported quarter, the company repurchased shares worth $400 million at an average price of $155 per share.
OutlookThe company expects fiscal third-quarter 2026 asset management and related administrative fees to be 1% higher, sequentially, driven by the impact of one additional billing day in the third quarter, along with slightly higher PCG assets and fee-based accounts balance at quarter end.
Based on static interest rates and assuming unchanged quarter end balances, net of the fiscal third quarter fee billing collection of $1.9 billion, the company expects the aggregate of NII and RJBDP third-party fees in the third fiscal quarter to be up 1% sequentially.
For fiscal 2026, management expects non-compensation expenses, excluding the bank loan loss provision for credit losses, unexpected legal and regulatory items, and non-GAAP adjustments to be $2.3 billion, representing 8% year-over-year growth.
The effective tax rate for fiscal 2026 is expected to be approximately 24-25%.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates revision.
VGM ScoresCurrently, Raymond James Financial has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Raymond James Financial has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerRaymond James Financial is part of the Zacks Financial - Investment Bank industry. Over the past month, Morgan Stanley (MS - Free Report) , a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended March 2026 more than a month ago.
Morgan Stanley reported revenues of $20.58 billion in the last reported quarter, representing a year-over-year change of +16%. EPS of $3.43 for the same period compares with $2.60 a year ago.
Morgan Stanley is expected to post earnings of $2.71 per share for the current quarter, representing a year-over-year change of +27.2%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.6%.
Morgan Stanley has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Raymond James Financial, Inc. (RJF - Free Report) Established in 1962, Raymond James Financial Inc. is a diversified company based in St. Petersburg, FL. The company along with its subsidiaries – Raymond James & Associates Inc. (RJ&A), Raymond James Financial Services Inc. (RJFS), Raymond James Financial Services Advisors Inc. (RJFSA), Raymond James Ltd. (RJ Ltd.), Eagle Asset Management Inc. (Eagle) and Raymond James Bank N.A. (RJ Bank) – provide financial services mainly in the United States and Canada.
RJF is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. RJF has a Growth Style Score of B, forecasting year-over-year earnings growth of 10.9% for the current fiscal year.
For fiscal 2026, three analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $11.82 per share. RJF boasts an average earnings surprise of +2.7%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, RJF should be on investors' short list.
Algert Global LLC raised its stake in Group 1 Automotive, Inc. (NYSE: GPI) by 365.9% during the undefined quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The fund owned 63,980 shares of the company's stock after purchasing an additional 50,248 shares during the period.
, /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI) ("Group 1" or the "Company"), a Fortune 250 automotive retailer with 253 dealerships located in the U.S. and U.K., today announced that it will release financial results for the first quarter ended March 31, 2026 on Thursday, April 30, 2026 before the market opens. Daryl Kenningham, Group 1's President and Chief Executive Officer, and the Company's senior management team will host a conference call to discuss the results later that morning at 10:00 a.m. ET.
The conference call will be simulcast live on the Internet at http://www.group1corp.com/events. A webcast replay will be available for 30 days. A copy of the Company's presentation will also be made available at http://www.group1corp.com/company-presentations.
The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:
Domestic:
1-888-317-6003
International:
1-412-317-6061
Passcode:
3297324
A telephonic replay will be available following the call through May 7, 2026, by dialing:
Domestic:
1-855-669-9658
International:
1-412-317-0088
Replay Code:
9961441
ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 owns and operates 253 automotive dealerships, 313 franchises, and 32 collision centers in the United States and the United Kingdom that offer 36 brands of automobiles. Through its dealerships and omni-channel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.
Group 1 discloses additional information about the Company, its business, and its results of operations at www.group1corp.com, www.group1auto.com, www.group1collision.com, www.acceleride.com, and www.facebook.com/group1auto.
Investor contacts:
Terry Bratton
Manager, Investor Relations
Group 1 Automotive, Inc.
[email protected]
Media contacts:
Pete DeLongchamps
Senior Vice President, Financial Services and Manufacturer Relations
Group 1 Automotive, Inc.
[email protected]
Kimberly Barta
Head of Marketing and Communications
Group 1 Automotive, Inc.
[email protected]
The market expects Group 1 Automotive (GPI - Free Report) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended March 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on April 30. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis auto dealer is expected to post quarterly earnings of $8.93 per share in its upcoming report, which represents a year-over-year change of -12.2%.
Revenues are expected to be $5.5 billion, down 0% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 0.4% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Group 1 Automotive?For Group 1 Automotive, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.38%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination makes it difficult to conclusively predict that Group 1 Automotive will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Group 1 Automotive would post earnings of $9.36 per share when it actually produced earnings of $8.49, delivering a surprise of -9.29%.
Over the last four quarters, the company has beaten consensus EPS estimates two times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Group 1 Automotive doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Expected Results of an Industry PlayerLithia Motors (LAD - Free Report) , another stock in the Zacks Automotive - Retail and Whole Sales industry, is expected to report earnings per share of $7.07 for the quarter ended March 2026. This estimate points to a year-over-year change of -7.7%. Revenues for the quarter are expected to be $9.36 billion, up 2% from the year-ago quarter.
The consensus EPS estimate for Lithia Motors has been revised 3.2% lower over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of +0.31%.
When combined with a Zacks Rank of #3 (Hold), this Earnings ESP indicates that Lithia Motors will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Current quarter diluted earnings per common share from continuing operations of $10.82 and current quarter adjusted diluted earnings per common share from continuing operations (a non-GAAP measure) of $8.66 Record quarterly U.K. gross profits of $230.6 million, a 6.3% increase over the comparable prior year quarter, driven by double digit same store parts and service and F&I growth. Repurchased approximately 1.7% of the Company's outstanding common shares in first quarter of 2026 , /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI) ("Group 1" or the "Company"), a Fortune 250 automotive retailer with 253 dealerships located in the U.S. and U.K., today reported financial results for the first quarter of 2026 ("current quarter").
"The U.K. performed well in the first quarter of 2026," said Daryl Kenningham, Group 1's President and Chief Executive Officer. "Our U.K. business generated record revenues across nearly all major business lines and achieved record gross profit in used vehicles and parts and service. In the U.S., we saw a key bright spot in aftersales, with parts and service gross margin reaching a new quarterly high. Parts and service continues to be a key differentiator for us and our strength during this quarter is a testament to our relentless focus on operational excellence."
"The broader macro environment remains dynamic and challenging, with persistently high interest rates and elevated vehicle and gasoline prices weighing on affordability. To address these challenges, we have initiated several cost actions in the U.S. and U.K., including staffing reductions and discretionary expense reductions across our business."
Reconciliations for financial results, non-GAAP metrics and diluted earnings per common share between continuing and discontinued operations are included in the accompanying financial tables.
Current Quarter Results Overview
Current quarter total revenues were $5.4 billion, compared to $5.5 billion for the first quarter of 2025 ("prior-year quarter"). Current quarter net income from continuing operations was $129.9 million, an increase of $2.1 million compared to $127.7 million for the prior-year quarter. Current quarter adjusted net income from continuing operations (a non-GAAP measure) was $104.0 million, compared to $134.7 million for the prior-year quarter. Current quarter diluted earnings per common share from continuing operations was $10.82, an increase of $1.18 compared to $9.64 for the prior-year quarter. Current quarter diluted earnings per common share from continuing operations included a $2.87 per share benefit related to a gain on asset dispositions. Current quarter adjusted diluted earnings per common share from continuing operations (a non-GAAP measure) was $8.66, compared to $10.17 for the prior-year quarter. First Quarter 2026
Key Performance Metrics
(year-over-year comparable period basis)
Consolidated
Same Store
(a non-GAAP
measure)
Reported:
1Q26
Change
1Q26
Change
Total revenues
$5.4B
(1.8) %
$5.2B
(1.2) %
Total gross profit ("GP")
$877.9M
(1.6) %
$844.7M
(1.4) %
NV units sold
52,398
(6.6) %
50,812
(5.2) %
NV GP per retail unit ("PRU")
$3,296
(2.5) %
$3,239
(4.8) %
Used vehicle ("UV") retail units sold
56,985
(4.4) %
55,128
(3.5) %
UV retail GP PRU
$1,540
(1.9) %
$1,544
(1.7) %
Parts & service ("P&S") GP
$400.0M
+5.0 %
$384.4M
+5.9 %
P&S Gross Margin ("GM")
56.8 %
+1.7 %
56.8 %
+0.8 %
Finance and Insurance ("F&I") revenues
$215.9M
(4.6) %
$208.7M
(4.9) %
F&I GP PRU
$1,974
+0.9 %
$1,970
(0.5) %
Adjusted F&I GP PRU (a non-GAAP measure)
$2,036
+4.1 %
$2,035
+2.7 %
Selling, General and Administrative ("SG&A") expenses as a % of GP
68.4 %
(79) bps
72.9 %
+339 bps
Adjusted SG&A expenses (a non-GAAP measure) as a % of GP
72.7 %
+319 bps
72.2 %
+325 bps
Corporate Development
During the current quarter, as part of Volkswagen Group's Ideal Network Plan, Group 1 acquired one Skoda and two Volkswagen dealerships in the U.K. This acquisition is expected to generate approximately $135 million in annual revenues. The Company remains focused on efficiently and effectively integrating acquisitions into existing operations to create value for shareholders.
During the current quarter, the Company also disposed of two Mercedes-Benz dealerships in California and one Volkswagen and one Skoda dealership in the U.K. These dealerships generated approximately $570 million in annual revenues.
Subsequent to the current quarter, Group 1 executed an agreement with a Chinese automaker, Geely, to expand the U.K. network through three new locations. Additionally, we are evaluating representation with two additional Chinese OEMs.
Share Repurchases
During the current quarter, the Company repurchased 205,190 shares, at an average price per common share of $353.08, for a total of $72.4 million, excluding excise taxes of $0.5 million.
As of March 31, 2026, the Company had an aggregate 11,900,611 outstanding common shares and unvested restricted stock awards. As of March 31, 2026, the Company had $306.3 million remaining in its Board authorized common share repurchase program.
Future repurchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations in the open market, pursuant to Rule 10b5-1 trading plans or in privately negotiated transactions, and subject to Board approval and covenant restrictions.
First Quarter Earnings Conference Call Details
Group 1's senior management will host a conference call today at 10:00 a.m. ET to discuss the first quarter 2026 financial results. The conference call will be simulcast live on the Internet at http://www.group1corp.com/events. A webcast replay will be available for 30 days. A copy of the Company's presentation will also be made available at http://www.group1corp.com/company-presentations.
The conference call will also be available live by dialing in 10 minutes prior to the start of the call at:
Domestic:
1-888-317-6003
International:
1-412-317-6061
Passcode:
3297324
A telephonic replay will be available following the call through May 7, 2026, by dialing:
Domestic:
1-877-344-7529
International:
1-412-317-0088
Replay Code:
9961441
ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 owns and operates 253 automotive dealerships, 313 franchises, and 32 collision centers in the United States and the United Kingdom that offer 36 brands of automobiles. Through its dealerships and omni-channel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides automotive maintenance and repair services; and sells vehicle parts.
Group 1 discloses additional information about the Company, its business, and its results of operations at www.group1corp.com, www.group1auto.com, www.group1collision.com, www.acceleride.com, and www.facebook.com/group1auto.
FORWARD-LOOKING STATEMENTS
This press release 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 position, results of operations and business strategy, including the annualized revenues of recently completed acquisitions or dispositions and other benefits of such currently anticipated or recently completed acquisitions or dispositions. These forward-looking statements often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," "foresee," "may" or "will" and similar expressions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, (a) general economic and business conditions, (b) the impacts of sustained levels of inflation, (c) developments in U.S. and global trade policy, including the imposition by the U.S. of significant tariffs on the import of automobiles and certain materials used in our parts and services business and the resulting consequences (including, but not limited to, retaliatory tariffs by non-U.S. nations, supply chain disruptions, vehicle and part cost increases and demand decreases, and potential recessions in the U.S. and U.K.), (d) the level of manufacturer incentives, (e) our ability to comply with extensive laws, regulations and policies applicable to our operations, including BEV mandates in the U.K., and their impact on new vehicle demand, (f) our ability to obtain an inventory of desirable new and used vehicles (including as a result of changes in the international trade environment), (g) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions, (h) our cost of financing and the availability of credit for consumers, (i) our ability to complete acquisitions and dispositions, on a timely basis, if at all and the risks associated therewith, (j) our ability to successfully integrate recent and future acquisitions and realize the expected benefits from consummated acquisitions, (k) foreign exchange controls and currency fluctuations, (l) the armed conflicts in Ukraine and the Middle East, (m) our ability to maintain sufficient liquidity to operate, and (n) a material failure in or breach of our vendors' information technology systems and other cybersecurity incidents. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
NON-GAAP FINANCIAL MEASURES, SAME STORE DATA, AND OTHER DATA
In addition to evaluating the financial condition and results of our operations in accordance with U.S. GAAP, from time to time our management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering alternative financial measures not prepared in accordance with U.S. GAAP. In our evaluation of results from time to time, we exclude items that do not arise directly from core operations, such as non-cash asset impairment charges, out-of-period adjustments, legal matters, gains and losses on dealership franchise or real estate transactions, and catastrophic events, such as hailstorms, hurricanes and snow storms. Because these non-core charges and gains materially affect the Company's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items. This includes evaluating measures such as adjusted selling, general and administrative expenses, adjusted net income, adjusted diluted earnings per share, and constant currency. These adjusted measures are not measures of financial performance under U.S. GAAP, but are instead considered non-GAAP financial performance measures. Non-GAAP measures do not have definitions under U.S. GAAP and may be defined differently by, and not be comparable to similarly titled measures used by, other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with U.S. GAAP. We caution investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable U.S. GAAP measures.
In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Our management also uses these adjusted measures in conjunction with U.S. GAAP financial measures to assess our business, including communication with our Board of Directors, investors, and industry analysts concerning financial performance. We disclose these non-GAAP measures, and the related reconciliations, because we believe investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance. The exclusion of certain expenses in the calculation of non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-GAAP financial measures.
In addition, we evaluate our results of operations on both an as reported and a constant currency basis. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information provides valuable supplemental information regarding our underlying business and results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our current period reported results for entities reporting in currencies other than U.S. dollars using comparative period exchange rates rather than the actual exchange rates in effect during the respective periods. The constant currency performance measures should not be considered a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. The Same Store amounts presented include the results of dealerships for the identical months in each period presented in comparison, commencing with the first full month in which the dealership was owned by us and, in the case of dispositions, ending with the last full month it was owned by us. Same Store results also include the activities of our corporate headquarters.
Certain amounts in the financial statements may not compute due to rounding. All computations have been calculated using unrounded amounts for all periods presented.
Investor contacts:
Terry Bratton
Manager, Investor Relations
Group 1 Automotive, Inc.
[email protected]
Media contacts:
Pete DeLongchamps
Senior Vice President, Financial Services and Manufacturer Relations
Group 1 Automotive, Inc.
[email protected]
Kimberly Barta
Head of Marketing and Communications
Group 1 Automotive, Inc.
[email protected]
Less: Earnings allocated to participating securities
1.3
1.6
(0.3)
(16.6) %
Net income available to diluted common shares
$ 128.9
$ 126.5
$ 2.4
1.9 %
Diluted earnings per share from continuing operations
$ 10.82
$ 9.64
$ 1.18
12.2 %
Diluted earnings per share from discontinued operations
$ 0.03
$ 0.03
$ —
4.0 %
DILUTED EARNINGS PER SHARE
$ 10.85
$ 9.67
$ 1.18
12.2 %
Weighted average dilutive common shares outstanding
11.9
13.1
(1.2)
(9.2) %
Weighted average participating securities
0.1
0.2
—
(25.8) %
Total weighted average shares
12.0
13.2
(1.2)
(9.4) %
Effective tax rate on continuing operations
23.8 %
23.7 %
0.1 %
Group 1 Automotive, Inc.
Additional Information — Consolidated
(Unaudited)
March 31, 2026
December 31, 2025
Increase/(Decrease)
% Change
SELECTED BALANCE SHEET INFORMATION:
(In millions)
Cash and cash equivalents
$ 41.7
$ 32.5
$ 9.2
28.3 %
Inventories, net
$ 2,727.8
$ 2,741.3
$ (13.5)
(0.5) %
Floorplan notes payable, net (1)
$ 2,239.0
$ 1,915.8
$ 323.2
16.9 %
Total debt
$ 3,141.0
$ 3,699.5
$ (558.5)
(15.1) %
Total equity
$ 2,839.6
$ 2,789.1
$ 50.4
1.8 %
(1) Amounts are net of offset accounts of $149.7 and $504.2, respectively.
Three Months Ended March 31,
2026
2025
NEW VEHICLE UNIT SALES GEOGRAPHIC MIX:
United States
66.2 %
67.4 %
United Kingdom
33.8 %
32.6 %
NEW VEHICLE UNIT SALES BRAND MIX:
Toyota/Lexus
25.3 %
23.0 %
Volkswagen/Audi/Porsche/SEAT/SKODA
15.6 %
17.3 %
BMW/MINI
13.0 %
12.3 %
Mercedes-Benz/Sprinter/smart
9.6 %
9.3 %
Honda/Acura
8.0 %
8.0 %
Chevrolet/GMC/Buick
7.0 %
7.7 %
Ford/Lincoln
6.8 %
6.6 %
Hyundai/Kia/Genesis
5.5 %
5.1 %
Jaguar/Land Rover
3.6 %
3.0 %
Nissan
1.7 %
1.8 %
Subaru
1.5 %
2.8 %
Chrysler/Dodge/Jeep/RAM/Citroën/Leapmotor
1.3 %
1.8 %
Mazda
0.9 %
1.1 %
Other
0.1 %
0.1 %
100.0 %
100.0 %
March 31, 2026
December 31, 2025
March 31, 2025
DAYS' SUPPLY IN INVENTORY (1):
Consolidated
New vehicle inventory
38
46
29
Used vehicle inventory
32
36
33
U.S.
New vehicle inventory
51
44
38
Used vehicle inventory
26
29
26
U.K.
New vehicle inventory
19
52
16
Used vehicle inventory
42
55
47
(1) Days' supply in inventory is calculated based on inventory unit levels and 30-day total unit sales volumes, both at the end of each reporting period.
Group 1 Automotive, Inc.
Reported Operating Data — Consolidated
(Unaudited)
(In millions, except unit data)
Three Months Ended March 31,
2026
2025
Increase/
(Decrease)
% Change
Currency
Impact on
Current
Period
Results
Constant
Currency %
Change
Revenues:
New vehicle retail sales
$ 2,562.4
$ 2,680.0
$ (117.6)
(4.4) %
$ 39.0
(5.8) %
Used vehicle retail sales
1,774.9
1,755.4
19.5
1.1 %
42.5
(1.3) %
Used vehicle wholesale sales
149.5
151.6
(2.1)
(1.4) %
3.4
(3.7) %
Total used
1,924.4
1,907.0
17.4
0.9 %
45.9
(1.5) %
Parts and service sales
704.4
692.1
12.4
1.8 %
11.6
0.1 %
F&I, net
215.9
226.2
(10.4)
(4.6) %
2.6
(5.7) %
Total revenues
$ 5,407.1
$ 5,505.3
$ (98.2)
(1.8) %
$ 98.9
(3.6) %
Gross profit:
New vehicle retail sales
$ 172.7
$ 189.6
$ (17.0)
(8.9) %
$ 3.1
(10.6) %
Used vehicle retail sales
87.7
93.5
(5.8)
(6.2) %
1.8
(8.2) %
Used vehicle wholesale sales
1.5
1.5
—
(0.2) %
(0.1)
5.8 %
Total used
89.3
95.1
(5.8)
(6.1) %
1.8
(8.0) %
Parts and service sales
400.0
381.0
19.0
5.0 %
6.6
3.3 %
F&I, net
215.9
226.2
(10.4)
(4.6) %
2.6
(5.7) %
Total gross profit
$ 877.9
$ 891.9
$ (14.1)
(1.6) %
$ 14.1
(3.2) %
Gross margin:
New vehicle retail sales
6.7 %
7.1 %
(0.3) %
Used vehicle retail sales
4.9 %
5.3 %
(0.4) %
Used vehicle wholesale sales
1.0 %
1.0 %
— %
Total used
4.6 %
5.0 %
(0.3) %
Parts and service sales
56.8 %
55.1 %
1.7 %
Total gross margin
16.2 %
16.2 %
— %
Units sold:
Retail new vehicles sold (1)
52,398
56,099
(3,701)
(6.6) %
Retail used vehicles sold (1)
56,985
59,618
(2,633)
(4.4) %
Wholesale used vehicles sold
15,402
16,354
(952)
(5.8) %
Total used
72,387
75,972
(3,585)
(4.7) %
Average sales price per unit sold:
New vehicle retail (1)
$ 52,415
$ 49,861
$ 2,554
5.1 %
$ 788
3.5 %
Used vehicle retail (1)
$ 31,204
$ 29,449
$ 1,755
6.0 %
$ 746
3.4 %
Gross profit per unit sold:
New vehicle retail sales
$ 3,296
$ 3,381
$ (85)
(2.5) %
$ 59
(4.3) %
Used vehicle retail sales
$ 1,540
$ 1,569
$ (29)
(1.9) %
$ 32
(3.9) %
Used vehicle wholesale sales
$ 99
$ 93
$ 6
6.0 %
$ (6)
12.4 %
Total used
$ 1,233
$ 1,251
$ (18)
(1.5) %
$ 24
(3.4) %
F&I PRU
$ 1,974
$ 1,955
$ 19
0.9 %
$ 24
(0.3) %
Adjusted F&I PRU (2)
$ 2,036
$ 1,955
$ 81
4.1 %
$ 24
2.9 %
Other:
SG&A expenses
$ 600.6
$ 617.3
$ (16.7)
(2.7) %
$ 11.9
(4.6) %
Adjusted SG&A expenses (2)
$ 643.4
$ 620.3
$ 23.1
3.7 %
$ 11.9
1.8 %
SG&A as % gross profit
68.4 %
69.2 %
(0.8) %
Adjusted SG&A as % gross profit (2)
72.7 %
69.5 %
3.2 %
Operating margin %
4.5 %
4.2 %
0.2 %
Adjusted operating margin % (2)
3.9 %
4.4 %
(0.5) %
Pretax margin %
3.2 %
3.0 %
0.1 %
Adjusted pretax margin % (2)
2.5 %
3.2 %
(0.7) %
Floorplan expense:
Floorplan interest expense
$ 23.3
$ 26.9
$ (3.6)
(13.4) %
$ 0.5
(15.1) %
Less: Floorplan assistance (3)
20.1
20.4
(0.4)
(1.8) %
—
(1.8) %
Net floorplan expense
$ 3.2
$ 6.5
$ (3.2)
$ 0.5
(1) Retail new and used vehicle units sold include new and used vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new and used vehicles due to their net presentation within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold.
(2) See the section in this release titled "Reconciliation of Certain Non-GAAP Financial Measures" for the GAAP to non-GAAP reconciliation of these figures.
(3) Floorplan assistance is included within New vehicle retail Gross profit above and New vehicle retail Cost of sales in our Condensed Consolidated Statements of Operations.
Group 1 Automotive, Inc.
Reported Operating Data — U.S.
(Unaudited)
(In millions, except unit data)
Three Months Ended March 31,
2026
2025
Increase/
(Decrease)
% Change
Revenues:
New vehicle retail sales
$ 1,852.0
$ 1,968.7
$ (116.7)
(5.9) %
Used vehicle retail sales
1,117.5
1,144.3
(26.8)
(2.3) %
Used vehicle wholesale sales
94.6
92.0
2.6
2.8 %
Total used
1,212.1
1,236.3
(24.2)
(2.0) %
Parts and service sales
527.2
531.3
(4.1)
(0.8) %
F&I, net
172.6
185.5
(12.9)
(7.0) %
Total revenues
$ 3,763.8
$ 3,921.8
$ (157.9)
(4.0) %
Gross profit:
New vehicle retail sales
$ 114.9
$ 130.6
$ (15.8)
(12.1) %
Used vehicle retail sales
59.5
65.8
(6.2)
(9.5) %
Used vehicle wholesale sales
2.8
2.6
0.2
7.0 %
Total used
62.3
68.3
(6.0)
(8.8) %
Parts and service sales
297.5
290.5
7.0
2.4 %
F&I, net
172.6
185.5
(12.9)
(7.0) %
Total gross profit
$ 647.2
$ 675.0
$ (27.7)
(4.1) %
Gross margin:
New vehicle retail sales
6.2 %
6.6 %
(0.4) %
Used vehicle retail sales
5.3 %
5.7 %
(0.4) %
Used vehicle wholesale sales
2.9 %
2.8 %
0.1 %
Total used
5.1 %
5.5 %
(0.4) %
Parts and service sales
56.4 %
54.7 %
1.7 %
Total gross margin
17.2 %
17.2 %
— %
Units sold:
Retail new vehicles sold
34,666
37,835
(3,169)
(8.4) %
Retail used vehicles sold
36,097
38,613
(2,516)
(6.5) %
Wholesale used vehicles sold
9,868
10,217
(349)
(3.4) %
Total used
45,965
48,830
(2,865)
(5.9) %
Average sales price per unit sold:
New vehicle retail
$ 53,424
$ 52,034
$ 1,390
2.7 %
Used vehicle retail
$ 30,959
$ 29,636
$ 1,323
4.5 %
Gross profit per unit sold:
New vehicle retail sales
$ 3,313
$ 3,453
$ (139)
(4.0) %
Used vehicle retail sales
$ 1,650
$ 1,703
$ (54)
(3.1) %
Used vehicle wholesale sales
$ 279
$ 252
$ 27
10.8 %
Total used
$ 1,355
$ 1,400
$ (44)
(3.2) %
F&I PRU
$ 2,439
$ 2,426
$ 13
0.5 %
Adjusted F&I PRU (1)
$ 2,535
$ 2,426
$ 109
4.5 %
Other:
SG&A expenses
$ 418.2
$ 447.4
$ (29.2)
(6.5) %
Adjusted SG&A expenses (1)
$ 461.4
$ 451.4
$ 10.0
2.2 %
SG&A as % gross profit
64.6 %
66.3 %
(1.7) %
Adjusted SG&A as % gross profit (1)
70.5 %
66.9 %
3.7 %
(1) See the section in this release titled "Reconciliation of Certain Non-GAAP Financial Measures" for the GAAP to non-GAAP reconciliation of these figures.
Group 1 Automotive, Inc.
Reported Operating Data — U.K.
(Unaudited)
(In millions, except unit data)
Three Months Ended March 31,
2026
2025
Increase/
(Decrease)
% Change
Currency
Impact on
Current
Period
Results
Constant
Currency %
Change
Revenues:
New vehicle retail sales
$ 710.4
$ 711.2
$ (0.9)
(0.1) %
$ 39.0
(5.6) %
Used vehicle retail sales
657.4
611.1
46.3
7.6 %
42.5
0.6 %
Used vehicle wholesale sales
54.9
59.6
(4.7)
(7.9) %
3.4
(13.6) %
Total used
712.3
670.7
41.6
6.2 %
45.9
(0.6) %
Parts and service sales
177.3
160.8
16.4
10.2 %
11.6
3.0 %
F&I, net
43.3
40.8
2.6
6.3 %
2.6
(0.2) %
Total revenues
$ 1,643.3
$ 1,583.5
$ 59.7
3.8 %
$ 98.9
(2.5) %
Gross profit:
New vehicle retail sales
$ 57.8
$ 59.0
$ (1.2)
(2.0) %
$ 3.1
(7.3) %
Used vehicle retail sales
28.2
27.8
0.4
1.5 %
1.8
(5.1) %
Used vehicle wholesale sales
(1.2)
(1.0)
(0.2)
(17.6) %
(0.1)
(8.8) %
Total used
27.0
26.7
0.2
0.9 %
1.8
(5.7) %
Parts and service sales
102.5
90.5
12.1
13.3 %
6.6
6.0 %
F&I, net
43.3
40.8
2.6
6.3 %
2.6
(0.2) %
Total gross profit
$ 230.6
$ 217.0
$ 13.7
6.3 %
$ 14.1
(0.2) %
Gross margin:
New vehicle retail sales
8.1 %
8.3 %
(0.2) %
Used vehicle retail sales
4.3 %
4.5 %
(0.3) %
Used vehicle wholesale sales
(2.2) %
(1.8) %
(0.5) %
Total used
3.8 %
4.0 %
(0.2) %
Parts and service sales
57.8 %
56.3 %
1.6 %
Total gross margin
14.0 %
13.7 %
0.3 %
Units sold:
Retail new vehicles sold (1)
17,732
18,264
(532)
(2.9) %
Retail used vehicles sold (1)
20,888
21,005
(117)
(0.6) %
Wholesale used vehicles sold
5,534
6,137
(603)
(9.8) %
Total used
26,422
27,142
(720)
(2.7) %
Average sales price per unit sold:
New vehicle retail (1)
$ 49,916
$ 44,642
$ 5,274
11.8 %
$ 2,738
5.7 %
Used vehicle retail (1)
$ 31,630
$ 29,106
$ 2,524
8.7 %
$ 2,043
1.7 %
Gross profit per unit sold:
New vehicle retail sales
$ 3,261
$ 3,231
$ 30
0.9 %
$ 174
(4.5) %
Used vehicle retail sales
$ 1,350
$ 1,322
$ 28
2.1 %
$ 88
(4.6) %
Used vehicle wholesale sales
$ (222)
$ (170)
$ (52)
(30.4) %
$ (17)
(20.7) %
Total used
$ 1,021
$ 985
$ 36
3.6 %
$ 66
(3.1) %
F&I PRU
$ 1,121
$ 1,038
$ 84
8.1 %
$ 68
1.5 %
Other:
SG&A expenses
$ 182.4
$ 169.8
$ 12.5
7.4 %
$ 11.9
0.4 %
Adjusted SG&A expenses (2)
$ 182.0
$ 168.9
$ 13.2
7.8 %
$ 11.9
0.7 %
SG&A as % gross profit
79.1 %
78.3 %
0.8 %
Adjusted SG&A as % gross profit (2)
78.9 %
77.8 %
1.1 %
(1) Retail new and used vehicle units sold include new and used vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new and used vehicles due to their net presentation within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold.
(2) See the section in this release titled "Reconciliation of Certain Non-GAAP Financial Measures" for the GAAP to non-GAAP reconciliation of these figures.
Group 1 Automotive, Inc.
Same Store Operating Data — Consolidated
(Unaudited)
(In millions, except unit data)
Three Months Ended March 31,
2026
2025
Increase/
(Decrease)
% Change
Currency
Impact on
Current
Period
Results
Constant
Currency %
Change
Revenues:
New vehicle retail sales
$ 2,462.5
$ 2,569.2
$ (106.7)
(4.2) %
$ 38.2
(5.6) %
Used vehicle retail sales
1,708.3
1,685.5
22.8
1.4 %
41.8
(1.1) %
Used vehicle wholesale sales
140.8
138.1
2.6
1.9 %
3.1
(0.4) %
Total used
1,849.0
1,823.6
25.5
1.4 %
44.9
(1.1) %
Parts and service sales
677.3
647.9
29.4
4.5 %
11.4
2.8 %
F&I, net
208.7
219.4
(10.7)
(4.9) %
2.6
(6.1) %
Total revenues
$ 5,197.6
$ 5,260.1
$ (62.6)
(1.2) %
$ 96.9
(3.0) %
Gross profit:
New vehicle retail sales
$ 164.6
$ 182.4
$ (17.8)
(9.8) %
$ 3.0
(11.4) %
Used vehicle retail sales
85.1
89.8
(4.6)
(5.2) %
1.8
(7.2) %
Used vehicle wholesale sales
1.8
2.1
(0.2)
(10.8) %
(0.1)
(7.4) %
Total used
87.0
91.8
(4.9)
(5.3) %
1.7
(7.2) %
Parts and service sales
384.4
362.8
21.6
5.9 %
6.5
4.2 %
F&I, net
208.7
219.4
(10.7)
(4.9) %
2.6
(6.1) %
Total gross profit
$ 844.7
$ 856.5
$ (11.8)
(1.4) %
$ 13.8
(3.0) %
Gross margin:
New vehicle retail sales
6.7 %
7.1 %
(0.4) %
Used vehicle retail sales
5.0 %
5.3 %
(0.3) %
Used vehicle wholesale sales
1.3 %
1.5 %
(0.2) %
Total used
4.7 %
5.0 %
(0.3) %
Parts and service sales
56.8 %
56.0 %
0.8 %
Total gross margin
16.3 %
16.3 %
— %
Units sold:
Retail new vehicles sold (1)
50,812
53,625
(2,813)
(5.2) %
Retail used vehicles sold (1)
55,128
57,155
(2,027)
(3.5) %
Wholesale used vehicles sold
14,839
15,274
(435)
(2.8) %
Total used
69,967
72,429
(2,462)
(3.4) %
Average sales price per unit sold:
New vehicle retail (1)
$ 52,058
$ 49,948
$ 2,110
4.2 %
$ 799
2.6 %
Used vehicle retail (1)
$ 31,046
$ 29,494
$ 1,552
5.3 %
$ 760
2.7 %
Gross profit per unit sold:
New vehicle retail sales
$ 3,239
$ 3,402
$ (163)
(4.8) %
$ 60
(6.5) %
Used vehicle retail sales
$ 1,544
$ 1,571
$ (26)
(1.7) %
$ 33
(3.8) %
Used vehicle wholesale sales
$ 123
$ 134
$ (11)
(8.2) %
$ (5)
(4.6) %
Total used
$ 1,243
$ 1,268
$ (25)
(2.0) %
$ 25
(3.9) %
F&I PRU
$ 1,970
$ 1,981
$ (10)
(0.5) %
$ 25
(1.8) %
Adjusted F&I PRU (2)
$ 2,035
$ 1,981
$ 54
2.7 %
$ 25
1.5 %
Other:
SG&A expenses
$ 615.5
$ 595.0
$ 20.5
3.4 %
$ 11.4
1.5 %
Adjusted SG&A expenses (2)
$ 614.5
$ 590.2
$ 24.2
4.1 %
$ 11.4
2.2 %
SG&A as % gross profit
72.9 %
69.5 %
3.4 %
Adjusted SG&A as % gross profit (2)
72.2 %
68.9 %
3.3 %
Operating margin %
3.8 %
4.4 %
(0.6) %
Adjusted operating margin % (2)
4.0 %
4.5 %
(0.5) %
(1) Retail new and used vehicle units sold include new and used vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new and used vehicles due to their net presentation within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold.
(2) See the section in this release titled "Reconciliation of Certain Non-GAAP Financial Measures" for the GAAP to non-GAAP reconciliation of these figures.
Group 1 Automotive, Inc.
Same Store Operating Data — U.S.
(Unaudited)
(In millions, except unit data)
Three Months Ended March 31,
2026
2025
Increase/
(Decrease)
% Change
Revenues:
New vehicle retail sales
$ 1,764.4
$ 1,898.8
$ (134.4)
(7.1) %
Used vehicle retail sales
1,060.5
1,113.7
(53.2)
(4.8) %
Used vehicle wholesale sales
89.6
85.0
4.6
5.4 %
Total used
1,150.1
1,198.7
(48.6)
(4.1) %
Parts and service sales
504.3
498.8
5.5
1.1 %
F&I, net
165.9
181.3
(15.4)
(8.5) %
Total revenues
$ 3,584.8
$ 3,777.6
$ (192.8)
(5.1) %
Gross profit:
New vehicle retail sales
$ 107.9
$ 127.0
$ (19.2)
(15.1) %
Used vehicle retail sales
57.4
64.4
(7.1)
(11.0) %
Used vehicle wholesale sales
2.7
2.4
0.3
12.1 %
Total used
60.1
66.9
(6.8)
(10.2) %
Parts and service sales
284.0
278.9
5.1
1.8 %
F&I, net
165.9
181.3
(15.4)
(8.5) %
Total gross profit
$ 617.9
$ 654.2
$ (36.3)
(5.5) %
Gross margin:
New vehicle retail sales
6.1 %
6.7 %
(0.6) %
Used vehicle retail sales
5.4 %
5.8 %
(0.4) %
Used vehicle wholesale sales
3.1 %
2.9 %
0.2 %
Total used
5.2 %
5.6 %
(0.4) %
Parts and service sales
56.3 %
55.9 %
0.4 %
Total gross margin
17.2 %
17.3 %
(0.1) %
Units sold:
Retail new vehicles sold
33,404
36,590
(3,186)
(8.7) %
Retail used vehicles sold
34,584
37,566
(2,982)
(7.9) %
Wholesale used vehicles sold
9,506
9,789
(283)
(2.9) %
Total used
44,090
47,355
(3,265)
(6.9) %
Average sales price per unit sold:
New vehicle retail
$ 52,820
$ 51,893
$ 927
1.8 %
Used vehicle retail
$ 30,665
$ 29,647
$ 1,019
3.4 %
Gross profit per unit sold:
New vehicle retail sales
$ 3,229
$ 3,472
$ (243)
(7.0) %
Used vehicle retail sales
$ 1,658
$ 1,715
$ (57)
(3.3) %
Used vehicle wholesale sales
$ 288
$ 249
$ 38
15.4 %
Total used
$ 1,363
$ 1,412
$ (50)
(3.5) %
F&I PRU
$ 2,440
$ 2,445
$ (5)
(0.2) %
Adjusted F&I PRU (1)
$ 2,540
$ 2,445
$ 95
3.9 %
Other:
SG&A expenses
$ 440.9
$ 438.4
$ 2.5
0.6 %
Adjusted SG&A expenses (1)
$ 439.9
$ 434.6
$ 5.3
1.2 %
SG&A as % gross profit
71.4 %
67.0 %
4.3 %
Adjusted SG&A as % gross profit (1)
70.4 %
66.4 %
4.0 %
(1) See the section in this release titled "Reconciliation of Certain Non-GAAP Financial Measures" for the GAAP to non-GAAP reconciliation of these figures.
Group 1 Automotive, Inc.
Same Store Operating Data — U.K.
(Unaudited)
(In millions, except unit data)
Three Months Ended March 31,
2026
2025
Increase/
(Decrease)
% Change
Currency
Impact on
Current
Period
Results
Constant
Currency %
Change
Revenues:
New vehicle retail sales
$ 698.1
$ 670.4
$ 27.6
4.1 %
$ 38.2
(1.6) %
Used vehicle retail sales
647.8
571.8
76.0
13.3 %
41.8
6.0 %
Used vehicle wholesale sales
51.2
53.1
(1.9)
(3.6) %
3.1
(9.5) %
Total used
698.9
624.8
74.1
11.9 %
44.9
4.7 %
Parts and service sales
173.0
149.2
23.8
16.0 %
11.4
8.4 %
F&I, net
42.8
38.1
4.7
12.4 %
2.6
5.6 %
Total revenues
$ 1,612.8
$ 1,482.5
$ 130.3
8.8 %
$ 96.9
2.2 %
Gross profit:
New vehicle retail sales
$ 56.7
$ 55.4
$ 1.3
2.4 %
$ 3.0
(3.0) %
Used vehicle retail sales
27.8
25.3
2.4
9.7 %
1.8
2.5 %
Used vehicle wholesale sales
(0.9)
(0.4)
(0.5)
(134.1) %
(0.1)
(115.9) %
Total used
26.9
24.9
1.9
7.7 %
1.7
0.8 %
Parts and service sales
100.4
83.9
16.5
19.6 %
6.5
11.9 %
F&I, net
42.8
38.1
4.7
12.4 %
2.6
5.6 %
Total gross profit
$ 226.8
$ 202.3
$ 24.5
12.1 %
$ 13.8
5.3 %
Gross margin:
New vehicle retail sales
8.1 %
8.3 %
(0.1) %
Used vehicle retail sales
4.3 %
4.4 %
(0.1) %
Used vehicle wholesale sales
(1.8) %
(0.7) %
(1.0) %
Total used
3.8 %
4.0 %
(0.1) %
Parts and service sales
58.0 %
56.3 %
1.8 %
Total gross margin
14.1 %
13.6 %
0.4 %
Units sold:
Retail new vehicles sold (1)
17,408
17,035
373
2.2 %
Retail used vehicles sold (1)
20,544
19,589
955
4.9 %
Wholesale used vehicles sold
5,333
5,485
(152)
(2.8) %
Total used
25,877
25,074
803
3.2 %
Average sales price per unit sold:
New vehicle retail (1)
$ 50,198
$ 45,106
$ 5,091
11.3 %
$ 2,749
5.2 %
Used vehicle retail (1)
$ 31,691
$ 29,202
$ 2,489
8.5 %
$ 2,047
1.5 %
Gross profit per unit sold:
New vehicle retail sales
$ 3,258
$ 3,251
$ 7
0.2 %
$ 174
(5.1) %
Used vehicle retail sales
$ 1,352
$ 1,293
$ 59
4.6 %
$ 88
(2.3) %
Used vehicle wholesale sales
$ (169)
$ (70)
$ (99)
(140.8) %
$ (13)
(122.1) %
Total used
$ 1,039
$ 995
$ 44
4.4 %
$ 67
(2.4) %
F&I PRU
$ 1,128
$ 1,040
$ 88
8.5 %
$ 68
1.9 %
Other:
SG&A expenses
$ 174.6
$ 156.6
$ 18.0
11.5 %
$ 11.4
4.2 %
Adjusted SG&A expenses (2)
$ 174.6
$ 155.7
$ 18.9
12.2 %
$ 11.4
4.8 %
SG&A as % gross profit
77.0 %
77.4 %
(0.4) %
Adjusted SG&A as % gross profit (2)
77.0 %
76.9 %
— %
(1) Retail new and used vehicle units sold include new and used vehicle agency units. The agency units and related revenues are excluded from the calculation of the average sales price per unit sold for new and used vehicles due to their net presentation within revenues. The agency units and related net revenues are included in the calculation of gross profit per unit sold.
(2) See the section in this release titled "Reconciliation of Certain Non-GAAP Financial Measures" for the GAAP to non-GAAP reconciliation of these figures.
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures — Consolidated
(Unaudited)
(In millions, except per share and unit data)
Three Months Ended March 31, 2026
U.S.
GAAP
Non-
recurring
F&I
adjustment
Non-cash
gain on
interest
rate
swaps
Catastrophic
events
Dealership
and real
estate
transactions
Restructuring
charges
Legal items
and other
professional
fees
Asset
impairments
and
accelerated
depreciation
Non-
GAAP
adjusted
F&I, net
$ 215.9
$ 6.8
$ —
$ —
$ —
$ —
$ —
$ —
$ 222.7
Total gross profit
$ 877.9
$ 6.8
$ —
$ —
$ —
$ —
$ —
$ —
$ 884.7
SG&A expenses
$ 600.6
$ —
$ —
$ (0.7)
$ 43.8
$ —
$ (0.3)
$ —
$ 643.4
Depreciation and amortization expense
$ 31.1
$ —
$ —
$ —
$ —
$ —
$ —
$ (0.8)
$ 30.3
Asset impairments
$ 2.5
$ —
$ —
$ —
$ —
$ —
$ —
$ (2.5)
$ —
Restructuring charges
$ 1.0
$ —
$ —
$ —
$ —
$ (1.0)
$ —
$ —
$ —
Income (loss) from operations
$ 242.6
$ 6.8
$ —
$ 0.7
$ (43.8)
$ 1.0
$ 0.3
$ 3.4
$ 210.9
Other interest expense, net
$ 48.8
$ —
$ 0.8
$ —
$ —
$ —
$ —
$ —
$ 49.6
Income (loss) before income taxes
$ 170.5
$ 6.8
$ (0.8)
$ 0.7
$ (43.8)
$ 1.0
$ 0.3
$ 3.4
$ 138.0
Less: Provision (benefit) for income
taxes
40.6
1.6
(0.2)
0.2
(9.4)
0.4
0.1
0.8
34.1
Net income (loss) from continuing
operations
129.9
5.2
(0.6)
0.5
(34.5)
0.7
0.3
2.5
104.0
Less: Earnings (loss) allocated to
participating securities
1.3
0.1
—
—
(0.4)
—
—
—
1.1
Net income (loss) from continuing
operations available to diluted common
shares
$ 128.6
$ 5.1
$ (0.6)
$ 0.5
$ (34.1)
$ 0.7
$ 0.2
$ 2.5
$ 102.9
Diluted earnings (loss) per common
share from continuing operations
$ 10.82
$ 0.43
$ (0.05)
$ 0.04
$ (2.87)
$ 0.06
$ 0.02
$ 0.21
$ 8.66
Effective tax rate
23.8 %
24.7 %
F&I PRU (1)
$ 1,974
$ 2,036
SG&A as % gross profit (2)
68.4 %
72.7 %
Operating margin (3)
4.5 %
3.9 %
Pretax margin (4)
3.2 %
2.5 %
Same Store F&I, net
$ 208.7
$ 6.8
$ —
$ —
$ —
$ —
$ —
$ —
$ 215.5
Same Store F&I PRU (1)
$ 1,970
$ 2,035
Same Store Total gross profit
$ 844.7
$ 6.8
$ —
$ —
$ —
$ —
$ —
$ —
$ 851.5
Same Store SG&A expenses
$ 615.5
$ —
$ —
$ (0.7)
$ —
$ —
$ (0.3)
$ —
$ 614.5
Same Store SG&A as % gross profit (2)
72.9 %
72.2 %
Same Store income from operations
$ 197.5
$ 6.8
$ —
$ 0.7
$ —
$ —
$ 0.3
$ 2.8
$ 208.1
Same Store operating margin (3)
3.8 %
4.0 %
U.S. GAAP
Non-GAAP
adjustments
Non-GAAP
adjusted
Net income from discontinued operations
$ 0.3
$ —
$ 0.3
Less: Earnings allocated to participating securities
—
—
—
Net income from discontinued operations available to diluted common shares
$ 0.3
$ —
$ 0.3
Net income (loss)
$ 130.2
$ (25.9)
$ 104.3
Less: Earnings (loss) allocated to participating securities
1.3
(0.3)
1.1
Net income (loss) available to diluted common shares
$ 128.9
$ (25.7)
$ 103.2
Diluted earnings per common share from discontinued operations
$ 0.03
$ —
$ 0.03
Diluted earnings (loss) per common share from continuing operations
10.82
(2.16)
8.66
Diluted earnings (loss) per common share
$ 10.85
$ (2.16)
$ 8.69
(1) Adjusted F&I PRU excludes the impact of the non-recurring F&I adjustment.
(2) Adjusted SG&A as % of gross profit excludes the impact of SG&A reconciling items above.
(3) Adjusted operating margin excludes the impact of the non-recurring F&I adjustment, SG&A reconciling items, accelerated depreciation expense, asset impairment charges and restructuring charges.
(4) Adjusted pretax margin excludes the impact of the non-recurring F&I adjustment, non-cash gain on interest rate swaps, SG&A reconciling items, accelerated depreciation expense, asset impairment charges and restructuring charges.
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures — Consolidated
(Unaudited)
(In millions, except per share data)
Three Months Ended March 31, 2025
U.S.
GAAP
Dealership
and real
estate
transactions
Severance
costs
Restructuring
charges
Acquisition
costs
Legal items
and other
professional
fees
Asset
impairments
and
accelerated
depreciation
Non-
GAAP
adjusted
SG&A expenses
$ 617.3
$ 7.8
$ (1.0)
$ —
$ (1.1)
$ (2.7)
$ —
$ 620.3
Depreciation and amortization expense
$ 29.3
$ —
$ —
$ —
$ —
$ —
$ (0.4)
$ 28.9
Asset impairments
$ 0.4
$ —
$ —
$ —
$ —
$ —
$ (0.4)
$ —
Restructuring charges
$ 11.1
$ —
$ —
$ (11.1)
$ —
$ —
$ —
$ —
Income (loss) from operations
$ 233.9
$ (7.8)
$ 1.0
$ 11.1
$ 1.1
$ 2.7
$ 0.8
$ 242.8
Income (loss) before income taxes
$ 167.5
$ (7.8)
$ 1.0
$ 11.1
$ 1.1
$ 2.7
$ 0.8
$ 176.4
Less: Provision (benefit) for income taxes
39.7
(1.7)
—
2.8
—
0.6
0.2
41.6
Net income (loss) from continuing operations
127.7
(6.1)
1.0
8.3
1.1
2.0
0.6
134.7
Less: Earnings (loss) allocated to participating
securities
1.6
(0.1)
—
0.1
—
—
—
1.7
Net income (loss) from continuing operations
available to diluted common shares
$ 126.2
$ (6.0)
$ 1.0
$ 8.2
$ 1.1
$ 2.0
$ 0.6
$ 133.1
Diluted earnings (loss) per common share from
continuing operations
$ 9.64
$ (0.46)
$ 0.08
$ 0.63
$ 0.08
$ 0.15
$ 0.05
$ 10.17
Effective tax rate
23.7 %
23.6 %
SG&A as % gross profit (1)
69.2 %
69.5 %
Operating margin (2)
4.2 %
4.4 %
Pretax margin (3)
3.0 %
3.2 %
Same Store SG&A expenses
$ 595.0
$ —
$ (1.0)
$ —
$ (1.1)
$ (2.7)
$ —
$ 590.2
Same Store SG&A as % gross profit (1)
69.5 %
68.9 %
Same Store income from operations
$ 230.8
$ —
$ 1.0
$ —
$ 1.1
$ 2.7
$ 3.1
$ 238.6
Same Store operating margin (2)
4.4 %
4.5 %
U.S. GAAP
Non-GAAP
adjustments
Non-GAAP
adjusted
Net income from discontinued operations
$ 0.4
$ —
$ 0.4
Less: Earnings allocated to participating securities
—
—
—
Net income from discontinued operations available to diluted common shares
$ 0.3
$ —
$ 0.3
Net income
$ 128.1
$ 7.0
$ 135.1
Less: Earnings allocated to participating securities
1.6
0.1
1.7
Net income available to diluted common shares
$ 126.5
$ 6.9
$ 133.4
Diluted earnings per common share from discontinued operations
$ 0.03
$ —
$ 0.03
Diluted earnings per common share from continuing operations
9.64
0.53
10.17
Diluted earnings per common share
$ 9.67
$ 0.53
$ 10.20
(1) Adjusted SG&A as % of gross profit excludes the impact of SG&A reconciling items above.
(2) Adjusted operating margin excludes the impact of SG&A reconciling items, accelerated depreciation expense, asset impairment charges and restructuring charges.
(3) Adjusted pretax margin excludes the impact of SG&A reconciling items, accelerated depreciation expense, asset impairment charges and restructuring charges.
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures — U.S.
(Unaudited)
(In millions, except unit data)
Three Months Ended March 31, 2026
U.S. GAAP
Non-
recurring
F&I
adjustment
Catastrophic
events
Dealership
and real
estate
transactions
Legal items
and other
professional
fees
Non-GAAP
adjusted
F&I, net
$ 172.6
$ 6.8
$ —
$ —
$ —
$ 179.4
F&I PRU (1)
$ 2,439
$ 2,535
Total gross profit
$ 647.2
$ 6.8
$ —
$ —
$ —
$ 654.0
SG&A expenses
$ 418.2
$ —
$ (0.7)
$ 44.2
$ (0.3)
$ 461.4
SG&A as % gross profit (2)
64.6 %
70.5 %
Same Store F&I, net
$ 165.9
$ 6.8
$ —
$ —
$ —
$ 172.7
Same Store F&I PRU (1)
$ 2,440
$ 2,540
Same Store Total gross profit
$ 617.9
$ 6.8
$ —
$ —
$ —
$ 624.7
Same Store SG&A expenses
$ 440.9
$ —
$ (0.7)
$ —
$ (0.3)
$ 439.9
Same Store SG&A as % gross profit (2)
71.4 %
70.4 %
Three Months Ended March 31, 2025
U.S.
GAAP
Dealership
and real
estate
transactions
Severance
costs
Acquisition
costs
Legal items
and other
professional
fees
Non-GAAP
adjusted
SG&A expenses
$ 447.4
$ 7.8
$ (1.0)
$ (0.1)
$ (2.7)
$ 451.4
SG&A as % gross profit (2)
66.3 %
66.9 %
Same Store SG&A expenses
$ 438.4
$ —
$ (1.0)
$ (0.1)
$ (2.7)
$ 434.6
Same Store SG&A as % gross profit (2)
67.0 %
66.4 %
(1) Adjusted F&I PRU excludes the impact of the non-recurring F&I adjustment.
(2) Adjusted SG&A as % of gross profit excludes the impact of SG&A reconciling items above.
Group 1 Automotive, Inc.
Reconciliation of Certain Non-GAAP Financial Measures — U.K.
(Unaudited)
(In millions)
Three Months Ended March 31, 2026
U.S. GAAP
Dealership and real
estate transactions
Non-GAAP Adjusted
SG&A expenses
$ 182.4
$ (0.3)
$ 182.0
SG&A as % gross profit (1)
79.1 %
78.9 %
Three Months Ended March 31, 2025
U.S. GAAP
Acquisition costs
Non-GAAP Adjusted
SG&A expenses
$ 169.8
$ (1.0)
$ 168.9
SG&A as % gross profit (1)
78.3 %
77.8 %
Same Store SG&A expenses
$ 156.6
$ (1.0)
$ 155.7
Same Store SG&A as % gross profit (1)
77.4 %
76.9 %
(1) Adjusted SG&A as % of gross profit excludes the impact of SG&A reconciling items above.
Group 1 Automotive (GPI - Free Report) came out with quarterly earnings of $8.66 per share, missing the Zacks Consensus Estimate of $8.93 per share. This compares to earnings of $10.17 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -3.00%. A quarter ago, it was expected that this auto dealer would post earnings of $9.36 per share when it actually produced earnings of $8.49, delivering a surprise of -9.29%.
Over the last four quarters, the company has surpassed consensus EPS estimates just once.
Group 1 Automotive, which belongs to the Zacks Automotive - Retail and Whole Sales industry, posted revenues of $5.41 billion for the quarter ended March 2026, missing the Zacks Consensus Estimate by 1.76%. This compares to year-ago revenues of $5.51 billion. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Group 1 Automotive shares have lost about 11.2% since the beginning of the year versus the S&P 500's gain of 4.2%.
What's Next for Group 1 Automotive?While Group 1 Automotive has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Group 1 Automotive was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $10.67 on $5.75 billion in revenues for the coming quarter and $41.86 on $22.93 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Retail and Whole Sales is currently in the bottom 27% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Titan Machinery (TITN - Free Report) , another stock in the same industry, has yet to report results for the quarter ended April 2026.
This agriculture and construction equipment seller is expected to post quarterly loss of $0.61 per share in its upcoming report, which represents a year-over-year change of -5.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Titan Machinery's revenues are expected to be $493.22 million, down 17% from the year-ago quarter.
For the quarter ended March 2026, Group 1 Automotive (GPI - Free Report) reported revenue of $5.41 billion, down 1.8% over the same period last year. EPS came in at $8.66, compared to $10.17 in the year-ago quarter.
The reported revenue compares to the Zacks Consensus Estimate of $5.5 billion, representing a surprise of -1.76%. The company delivered an EPS surprise of -3%, with the consensus EPS estimate being $8.93.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Group 1 Automotive performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Units sold - Retail new vehicles sold: 52,398 versus 54,145 estimated by four analysts on average.Units sold - Retail used vehicles sold: 56,985 versus 59,473 estimated by four analysts on average.Units sold - United States - Retail new vehicles sold: 34,666 versus the three-analyst average estimate of 37,063.Units sold - United States - Retail used vehicles sold: 36,097 versus the three-analyst average estimate of 38,194.Revenues- United States - New vehicle retail sales: $1.85 billion compared to the $1.92 billion average estimate based on three analysts. The reported number represents a change of -5.9% year over year.Revenues- United Kingdom - New vehicle retail sales: $710.4 million versus the three-analyst average estimate of $743.12 million. The reported number represents a year-over-year change of -0.1%.Revenues- United States - F&I, net: $172.6 million versus the three-analyst average estimate of $189.15 million. The reported number represents a year-over-year change of -7%.Revenues- United States - Parts and service sales: $527.2 million versus the three-analyst average estimate of $547.82 million. The reported number represents a year-over-year change of -0.8%.Revenues- New vehicle retail sales: $2.56 billion versus $2.62 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a -4.4% change.Revenues- Finance, insurance and other, net: $215.9 million versus the four-analyst average estimate of $231.59 million. The reported number represents a year-over-year change of -4.6%.Revenues- Total Used vehicle: $1.92 billion versus $1.92 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +0.9% change.Revenues- Used vehicle wholesale sales: $149.5 million versus the four-analyst average estimate of $159.75 million. The reported number represents a year-over-year change of -1.4%.View all Key Company Metrics for Group 1 Automotive here>>>
Shares of Group 1 Automotive have returned +5.6% over the past month versus the Zacks S&P 500 composite's +12.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Zacks' 7 Best Strong Buy Stocks (New Research Report) Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.
Click Here, It's Really Free
Published in earnings earnings-estimates-revisions earnings-surprise
BEVERLY HILLS, Calif.--(BUSINESS WIRE)--The Presidio Group LLC (“Presidio”), an independent merchant banking firm focused on mergers and acquisitions, capital raising and investments in the automotive retail and consumer mobility sectors, exclusively advised Group 1 Automotive (NYSE: GPI) on the sale of Mercedes-Benz of Beverly Hills to Fletcher Jones Automotive Group (“Fletcher Jones”). The transaction closed March 30. “After significant acquisitions expanding Group 1's footprint and increasin.
Key Takeaways GPI Q1 EPS fell 14.8% to $8.66, missing estimates as revenues dipped 1.8% to $5.41B.Group 1 faced lower vehicle volumes, partly offset by higher pricing and resilient aftersales margins.GPI's parts and service gross profit rose 5%, while U.K. operations delivered record gross profit. Group 1 Automotive, Inc. (GPI - Free Report) reported first-quarter 2026 adjusted earnings of $8.66 per share, which declined 14.8% year over year and missed the Zacks Consensus Estimate of $8.93 by 3%. Total revenues were $5.41 billion, which decreased 1.8% year over year and came below the consensus mark of $5.50 billion by 1.76%.
Results reflected continued pressure on retail vehicle volumes, partly offset by steadier pricing and a resilient aftersales business. A key highlight was parts and service gross margin, which reached 56.8% in the quarter.
GPI’s Gross Profit Mix Leans on AftersalesGross profit totaled $877.9 million, edging down 1.6% from the year-ago quarter. The performance underscored how aftersales continues to stabilize results as vehicle retail activity normalizes.
Parts and service gross profit rose 5% year over year to $400 million, aided by a 170-basis-point improvement in parts and service gross margin to 56.8%.
Group 1 Sees Lower Volumes as Pricing Stays FirmOn the retail new-vehicle side, sales fell 4.4% from the prior-year quarter’s level to $2.56 billion, units sold fell 6.6% year over year to 52,398, while gross profit per retail unit slipped 2.5% to $3,296. The average selling price per new vehicle increased 5.1% to $52,415, partially cushioning the revenue impact from lower volumes.
Used-vehicle retail sales rose 1.1% from the year-ago period to $1.77 billion. Units sold declined 4.4% to 56,985, and used retail gross profit per unit decreased 1.9% to $1,540. Still, the average used-vehicle selling price rose 6% to $31,204, reflecting a higher price environment even as unit counts moderated.
Used-vehicle wholesale sales declined 1.4% year over year to $149.5 million. The unit generated gross profit of $1.5 million, flat year over year. In the Parts and Service business, the top line increased 1.8% to $704.4 million. Revenues from the Finance, Insurance and Other business were $215.9 million, down 4.6% from the year-ago quarter’s level.
GPI’s U.S. Operations Record Sales & Profit DeclineIn the reported quarter, revenues from the U.S. business segment fell 4% year over year to $3.76 billion. The segment’s gross profit declined 4.1% to $647.2 million. During the quarter, retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 34,666, 36,097 and 9,868, respectively.
Group 1’s U.K. Operations Post Record Quarterly Gross ProfitThe U.K. segment generated revenues of $1.64 billion, up 3.8% year over year, while gross profit increased 6.3% to a record $230.6 million in the quarter. Within the market, parts and service sales climbed 10.2% to $177.3 million, and parts and service gross profit rose 13.3% to $102.5 million, supporting the overall improvement. During the reported quarter, the retail new-vehicle, retail used-vehicle and wholesale used-vehicle units sold were 17,732, 20,888 and 5,534, respectively.
The strength across several U.K. business lines in the quarter, including progress in used vehicles and F&I on a same-store basis, alongside ongoing operational initiatives aimed at expanding service capacity and throughput, resulted in improvement.
Group 1 Targets Efficiency, Reshapes PortfolioIn the United States, the company implemented staffing reductions and discretionary expense actions, and expects to remove $50 million of annual costs from U.S. operations through headcount and contract-related savings.
The quarter also included portfolio activity. Group 1 acquired one Skoda and two Volkswagen dealerships in the United Kingdom, expected to add about $135 million in annual revenues, while disposing of two Mercedes-Benz dealerships in California and one Volkswagen and one Skoda dealership in the United Kingdom that collectively represented about $570 million in annual revenues. Subsequent to quarter-end, the company executed an agreement with Geely to expand its U.K. network through three new locations.
GPI’s Cash Flow, Liquidity and Leverage UpdateAs of March 31, 2026, Group 1’s cash and cash equivalents totaled $41.7 million, up from $32.5 million as of Dec. 31, 2025. Total debt was $3.14 billion at March 31, 2026, down from $3.70 billion as of Dec. 31, 2025, while floorplan notes payable (net) increased to $2.24 billion from $1.92 billion over the same period.
The company reported total liquidity of $714.3 million at quarter-end, comprising accessible cash and availability on the acquisition line, and noted a rent-adjusted leverage ratio of 3.09x. The quarter included $53 million of capital expenditures and $72.4 million of share repurchases, with $306.3 million remaining under the authorized buyback program as of March 31, 2026.
GPI currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Releases From Auto SpaceMobileye Global Inc. (MBLY - Free Report) reported first-quarter 2026 results on April 23. It posted earnings of 12 cents per share, beating the Zacks Consensus Estimate of 8 cents by 58.52%. The bottom line rose 50% year over year, driven by higher shipments of EyeQ system-on-chip. The company posted revenues of $558 million, which beat the Zacks Consensus Estimate of $520 million by 7.36% and increased 27.4% year over year.
Operating cash flow was $75 million, reflecting the company’s ability to convert its ADAS scale into cash generation.
Mobileye also approved a share buyback program of up to $250 million. By the end of the first quarter, MBLY had $1.21 billion in cash, after spending $591 million (net of cash received) on the Mentee Robotics acquisition.
Gentex Corporation (GNTX - Free Report) reported first-quarter 2026 results on April 24. It posted adjusted earnings of 48 cents per share, which beat the Zacks Consensus Estimate of 44 cents by 8.28%. The figure increased 11.6% from 43 cents a year ago. Net sales came in at $675 million, topping the consensus mark of $647 million by 4.36%. Revenues rose 17.1% from $577 million in the year-ago quarter, aided by contributions from VOXX and a richer mix of advanced features.
Liquidity improved during the quarter. As of March 31, 2026, GNTX’s cash and cash equivalents were $164.8 million compared with $145.6 million as of Dec. 31, 2025. Short-term investments increased to $10.3 million from $5.4 million.
PACCAR Inc. (PCAR - Free Report) reported first-quarter 2026 results on April 28. It reported earnings of $1.15 per share, beating the Zacks Consensus Estimate of $1.13 by 1.8%. The bottom line decreased 21.2% from $1.46 in the year-ago quarter. Consolidated revenues (including trucks and financial services) were $6.78 billion, down from $7.44 billion in the corresponding quarter of 2025. The decline reflected lower industry volumes.
On the balance sheet, cash and marketable securities were $8.60 billion as of March 31, 2026, compared with $9.25 billion as of Dec. 31, 2025, while stockholders’ equity increased to $19.76 billion from $19.26 billion over the same span.
, /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI) ("Group 1" or the "Company"), a Fortune 250 automotive retailer with 253 dealerships located in the U.S. and U.K., today announced its board of directors declared a quarterly dividend of $0.55 per share. The dividend is consistent with the Company's previously announced increase of 10% in its annualized dividend rate from $2.00 per share in 2025 to $2.20 per share in 2026.
The dividend is payable on June 15, 2026 to stockholders of record as of June 1, 2026.
ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 owns and operates 253 automotive dealerships, 313 franchises, and 32 collision centers in the United States and the United Kingdom that offer 36 brands of automobiles. Through its dealerships and omni-channel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts.
Group 1 discloses additional information about the Company, its business, and its results of operations at www.group1corp.com, www.group1auto.com, www.group1collision.com, www.acceleride.com, and www.facebook.com/group1auto.
FORWARD-LOOKING STATEMENTS
All statements in this press release related to future, not past, events are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on our current expectations and assumptions regarding our business, the economy and other future conditions. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.
Investor contacts:
Terry Bratton
Manager, Investor Relations
Group 1 Automotive, Inc.
[email protected]
Media contacts:
Pete DeLongchamps
Senior Vice President, Financial Services and Manufacturer Relations
Group 1 Automotive, Inc.
[email protected]
Kimberly Barta
Head of Marketing and Communications
Group 1 Automotive, Inc.
[email protected]
, /PRNewswire/ -- Group 1 Automotive (NYSE: GPI) ("Group 1" or the "Company") today announced the appointment of Daniel McHenry as President and CEO of its UK business, effective May 19, 2026.* Prior to becoming CFO for Group 1, Daniel spent 13 years in Group 1's UK Operations. He will lead the UK business while continuing in his CFO role, reporting to Daryl Kenningham, Group 1's President and CEO. McHenry replaces Mark Raban, who is leaving the Company after two years as the head of the UK business.
"Daniel is an exceptional talent, and his proven leadership and experience make him the right leader for our UK business. We believe he will have a very positive impact." said Mr. Kenningham. "This appointment gives Daniel valuable operational experience, a reflection of our commitment to talent development and succession planning."
"I am proud to take on this role," said McHenry, "and look forward to building on what Group 1 has already achieved in the UK. Our US and UK businesses have distinct strengths and drawing on those strengths and the broader resources of Group 1 presents a tremendous opportunity for our team and our shareholders."
A native of Belfast, Northern Ireland, McHenry holds a Bachelor's degree in Economics from Queen's University Belfast and a Master's degree in Accounting and Management Science from the University of Southampton. Prior to his 2020 appointment as CFO, he served as UK Finance Director for Group 1.
Mr. Kenningham concluded, "I would also like to thank Mark for his contributions to our UK business and wish him nothing but the best in the future."
*subject to formal regulatory approval
ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 owns and operates 253 automotive dealerships, 313 franchises, and 32 collision centers in the United States and the United Kingdom that offer 36 brands of automobiles. Through its dealerships and omni-channel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service contracts; provides automotive maintenance and repair services; and sells vehicle parts.
Group 1 discloses additional information about the Company, its business, and its results of operations at www.group1corp.com, www.group1auto.com, www.group1collision.com, www.acceleride.com, and www.facebook.com/group1auto
Investor contacts:
[email protected]
Media contacts:
Pete DeLongchamps
Senior Vice President, Financial Services and Manufacturer Relations
Group 1 Automotive, Inc.
[email protected]
Kimberly Barta
Head of Marketing, Brand and Communications
Group 1 Automotive, Inc.
[email protected]
On May 19, 2026, Group 1 Automotive Inc GPI shares fell 3.7% to a current price of $305.47. This decline is part of a broader downward trend, with the stock down 22.2% year-to-date and 30.4% over the past year. The shares have traded in a 52-week range of $292.44 to $488.39.
GF Value™ verdict: Current price of $305.47 is 28.0% below the GF Value™ estimate of $424.37.GF Score™ of 86/100 indicates a strong overall performance based on key financial metrics.Notable signal: No insider transactions have occurred in the last 3 months. Is GPI Overvalued or Undervalued? Group 1 Automotive Inc GPI appears to be undervalued according to the GF Value™ which estimates a fair value of $424.37. This suggests that the stock is currently trading at a significant discount of 28.0% compared to its intrinsic value. The margin of safety provided by this undervaluation may present a considerable opportunity for investors looking for growth in the automotive sector. However, potential investors should exercise caution as the undervaluation must be weighed against market conditions and the company's financial health. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
Additionally, the GF Valuation label indicates that GPI is "Modestly Undervalued," further reinforcing the view that current pricing does not fully reflect the company's underlying value. Investors may find this an attractive entry point, though they should remain aware of market volatility and economic factors that could impact future performance.
How Does GPI's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 11.7x 6.5x Forward P/E 7.2x N/A Currently, GPI's P/E ratio of 11.7x is 80% above its 5-year median P/E of 6.5x, suggesting that the stock is trading at a premium compared to its historical valuation. The forward P/E of 7.2x indicates a potential for earnings growth that may not be fully reflected in the current valuation. This P/E analysis aligns with the GF Value™ verdict, indicating that while the stock may be undervalued, it is also trading at higher multiples than its historical averages.
What Does GPI's GF Score™ Tell Us? Metric Rating GF Score™ 86 Financial Strength 5/10 Profitability 8/10 Growth 9/10 Valuation 8/10 Momentum 4/10 The GF Score™ of 86/100 indicates a strong overall performance for GPI based on the five key aspects of financial analysis. The strongest areas are Growth (9/10) and Profitability (8/10), suggesting that the company has strong potential for earnings and operational efficiency. However, the Financial Strength rating of 5/10 and the Momentum score of 4/10 highlight areas where the company may face challenges, particularly in maintaining stable financial health and positive stock price momentum.
What Are Insiders Doing with GPI Stock? In the last three months, there have been no insider transactions reported for Group 1 Automotive Inc. This lack of insider activity may suggest a neutral sentiment among insiders regarding the stock's current valuation and future potential. Absence of buying or selling can indicate that insiders are uncertain or do not find the current price appealing enough to act.
What This Means for Investors Based on the analysis, Group 1 Automotive Inc GPI is currently undervalued according to GF Value™, presenting a potential investment opportunity within the automotive sector. However, investors should consider the overall market conditions and the company's financial strength before making investment decisions.
For the complete analysis, visit the Group 1 Automotive Inc GPI stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is GPI's GF Score™?
GPI's GF Score™ is 86/100, indicating a strong overall performance based on key financial metrics that suggest potential for higher long-term returns.
Is GPI overvalued or undervalued?
GPI is currently undervalued with a GF Value™ of $424.37, which is 28.0% higher than its current price of $305.47.
What is GPI's P/E ratio?
GPI's P/E ratio (TTM) is 11.7x, which is significantly above its historical 5-year median P/E of 6.5x, suggesting that the stock is trading at a premium compared to its past valuations.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
On May 29, 2026, Group 1 Automotive Inc GPI shares fell 3.1% to a current price of $316.34. This decline continues a troubling trend, with the stock down 19.4% year-to-date and 25.0% over the past year, while trading within a 52-week range of $292.44 to $488.39.
GF Value™ verdict: Current price is $316.34, which is 25.6% below the GF Value™ estimate of $425.27.GF Score™ of 86/100 indicates a strong overall rating based on various factors.Most notable signal: No insider transactions have occurred in the last 3 months, suggesting a lack of insider confidence or activity. Is GPI Overvalued or Undervalued? Currently, Group 1 Automotive Inc GPI is trading at $316.34, which is significantly below its GF Value™ estimate of $425.27. This indicates that the stock is 25.6% undervalued, presenting potential opportunities for investors looking for bargains in the automotive sector. The GF Valuation label classifies GPI as modestly undervalued, suggesting that there is a margin of safety for potential investors. However, it is crucial to consider that a modest undervaluation does not guarantee immediate price appreciation, as market conditions and company performance can influence the stock's movement.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. The current undervaluation signals a potential opportunity, but caution should be exercised as market volatility and broader economic conditions can impact stock prices in the near term.
How Does GPI's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 12.1x 6.5x (5-Year Median) Forward P/E 7.5x - The current P/E (TTM) ratio of 12.1x is substantially above the 5-year median P/E of 6.5x, indicating that GPI is trading at a higher valuation relative to its historical averages. This P/E analysis corroborates the GF Value™ verdict that GPI is undervalued, as the higher current P/E could suggest a market correction is needed to bring valuations in line with historical averages.
What Does GPI's GF Score™ Tell Us? Metric Rating GF Score™ 86/100 Financial Strength 5/10 Profitability 8/10 Growth 9/10 Valuation 8/10 Momentum 4/10 GPI's GF Score™ of 86/100 indicates a strong potential for long-term returns, with particularly high ratings in Growth (9/10) and Profitability (8/10). However, the Financial Strength score of 5/10 raises concerns about the company’s overall financial stability. Additionally, the low Momentum rank of 4/10 suggests that the stock may face headwinds in the short term, which could impact its price performance moving forward.
What Are Insiders Doing with GPI Stock? In the past three months, there have been no reported insider transactions for Group 1 Automotive Inc GPI . This lack of insider activity may suggest that company executives are either confident in the current valuation or are waiting for more favorable market conditions before making moves with their stock holdings. Without insider buying, it can be challenging to gauge the sentiment from those within the company regarding its future performance.
What This Means for Investors Based on the GF Value™ assessment, Group 1 Automotive Inc GPI is currently undervalued, offering a potential opportunity for investors looking to enter the stock at a discount. However, given the recent trends in price performance and the concerns around Financial Strength and Momentum, caution is warranted when considering investment in GPI.
For the complete analysis, visit the Group 1 Automotive Inc GPI stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is GPI's GF Score™?
GPI's GF Score™ is 86/100, indicating a strong overall rating based on multiple financial performance metrics.
Is GPI overvalued or undervalued?
GPI is currently undervalued, with a GF Value™ estimate of $425.27, which is 25.6% higher than the current market price of $316.34.
What is GPI's P/E ratio?
GPI's P/E (TTM) ratio is 12.1x, which is significantly above its 5-year median of 6.5x, suggesting a higher valuation compared to its historical performance.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
, /PRNewswire/ -- Mercedes-Benz of Westwood, part of Houston-based Group 1 Automotive, Inc. ( NYSE: GPI ), will celebrate the grand opening of its newly renovated dealership on June 4, from 6 to 9 p.m. at 425 Providence Hwy in Westwood, Massachusetts. The event will feature food, drinks, entertainment, a ribbon-cutting ceremony, and remarks from Group 1 President and CEO Daryl Kenningham. CEO Adam Chamberlain of Mercedes-Benz USA will also be in attendance.
Guests can learn more about Mercedes-Benz of Westwood, explore current inventory, and schedule service at Mercedes-Benz of Westwood online.
The multi-phase renovation modernized approximately 35,320 square feet of the dealership and expanded the final building to approximately 67,617 square feet, including existing service and parts areas. The project introduced a larger showroom, an expanded service drive, AMG Performance Center displays, large-format digital vehicle stages, upgraded customer lounge spaces, and new vehicle delivery areas.
“Customers will notice the difference from the moment they arrive,” said Michael Espey, General Manager of Mercedes-Benz of Westwood. “The expanded showroom allows us to showcase our vehicles more effectively, the enhanced service drive improves efficiency and convenience, and the upgraded customer spaces create a more comfortable and welcoming environment. We look forward to welcoming guests to experience the dealership firsthand.”
Customer areas were also expanded and updated. The renovated dealership includes a larger customer lounge with a self-serve café, customer workstations, and retail display areas. Restroom improvements include individual stalls for added privacy. The expanded service drive accommodates more vehicles indoors, helping customers move through arrival and drop-off more efficiently.
“Mercedes-Benz of Westwood reflects Group 1 Automotive’s ongoing commitment to investing in modern retail facilities, elevating the customer experience, and supporting long-term operational excellence,” said Daryl Kenningham, President and Chief Executive Officer of Group 1 Automotive. “This renovation strengthens our ability to serve customers throughout the Greater Boston market while showcasing the innovation, luxury, and performance that define the Mercedes-Benz brand.”
$10,000 Donation to the Joe Andruzzi Foundation
In Group 1's tradition of giving back, Mercedes-Benz of Westwood will make a $10,000 donation to the Joe Andruzzi Foundation during the grand opening event. Joe and Jen Andruzzi will accept the donation on behalf of the foundation.
The Joe Andruzzi Foundation provides financial assistance and support to New England cancer patients and their families while they are undergoing treatment, helping ease the everyday financial burdens that often accompany a cancer diagnosis.
EVENT DETAILS
What: Mercedes-Benz of Westwood Grand Opening
When: Thursday, June 4, 6 to 9 p.m.
Where: Mercedes-Benz of Westwood, 425 Providence Hwy, Westwood, MA
Who: Mercedes-Benz of Westwood, Group 1 Automotive, customers, local guests, community partners, Joe and Jen Andruzzi, and Group 1 President and CEO Daryl Kenningham.
About Group 1 Automotive, Inc.
Group 1 owns and operates 250 automotive dealerships, 310 franchises, and 32 collision centers in the United States and the United Kingdom that offer 37 brands of automobiles. Through its dealerships and omni-channel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts. (Group 1 Automotive)
Media Contact:
Kimberly Barta
Head of Marketing, Brand and Communications
[email protected]
503-539-0756
Multi-phase renovation introduces expanded showroom, enhanced service drive, AMG Performance Center displays, EV infrastructure, and updated customer amenities
, /PRNewswire/ -- Mercedes-Benz of Westwood, part of Houston-based Group 1 Automotive, Inc. ( NYSE: GPI ), will celebrate the grand opening of its newly renovated dealership on June 4, from 6 to 9 p.m. at 425 Providence Hwy in Westwood, Massachusetts. The event will feature food, drinks, entertainment, a ribbon-cutting ceremony, and remarks from Group 1 President and CEO Daryl Kenningham and CEO Adam Chamberlain of Mercedes-Benz USA.
Guests can learn more about Mercedes-Benz of Westwood, explore current inventory, and schedule service at Mercedes-Benz of Westwood online .
The multi-phase renovation modernized approximately 35,320 square feet of the dealership and expanded the final building to approximately 67,617 square feet, including existing service and parts areas. The project introduced a larger showroom, an expanded service drive, AMG Performance Center displays, large-format digital vehicle stages, upgraded customer lounge spaces, new vehicle delivery areas, and EV infrastructure inside and outside the dealership.
"Customers will see the difference as soon as they arrive," said Michael Espey, General Manager of Mercedes-Benz of Westwood. "The new showroom gives us more room to present vehicles properly, the expanded service drive helps us welcome customers more efficiently, and the upgraded lounge and consultation areas create a more comfortable experience throughout the visit. We invite guests to visit the dealership or explore Mercedes-Benz of Westwood online to see what's new."
Customer areas were also expanded and updated. The renovated dealership includes a larger customer lounge with a self-serve café, customer workstations, and retail display areas. Restroom improvements include individual stalls for added privacy. The expanded service drive accommodates more vehicles indoors, helping customers move through arrival and drop-off more efficiently. EV infrastructure was added throughout the site to support both customer use and dealership operations.
"Mercedes-Benz of Westwood reflects Group 1's continued investment in modern dealership facilities and customer-focused design," said Daryl Kenningham, President and CEO of Group 1 Automotive. "This renovation gives our Westwood team a stronger platform to serve customers today while preparing for the continued growth of electric mobility and digital retail."
$10,000 Donation to the Joe Andruzzi Foundation
In Group 1's tradition of giving back, Mercedes-Benz of Westwood will make a $10,000 donation to the Joe Andruzzi Foundation during the grand opening event. Joe and Jen Andruzzi will accept the donation on behalf of the foundation.
The Joe Andruzzi Foundation provides financial assistance and support to New England cancer patients and their families while they are undergoing treatment, helping ease the everyday financial burdens that often accompany a cancer diagnosis.
EVENT DETAILS
What: Mercedes-Benz of Westwood Grand Opening
When: Thursday, June 4, 6 to 9 p.m.
Where: Mercedes-Benz of Westwood, 425 Providence Hwy, Westwood, MA
Who: Mercedes-Benz of Westwood, Group 1 Automotive, customers, local guests, community partners, Joe and Jen Andruzzi, and Group 1 President and CEO Daryl Kenningham.
About Group 1 Automotive, Inc.
Group 1 owns and operates 250 automotive dealerships, 310 franchises, and 32 collision centers in the United States and the United Kingdom that offer 37 brands of automobiles. Through its dealerships and omni-channel platform, the Company sells new and used cars and light trucks; arranges related vehicle financing; sells service and insurance contracts; provides automotive maintenance and repair services; and sells vehicle parts. (Group 1 Automotive)
Media Contact:
Kimberly Barta
Head of Marketing, Brand and Communications [email protected]
503-539-0756
View original content:https://www.prnewswire.com/news-releases/mercedes-benz-of-westwood-celebrates-grand-opening-of-newly-renovated-luxury-dealership-302790479.html
, /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI) ("Group 1" or the "Company"), an international automotive retailer with operations in the U.S. and U.K., today announced that Melkeya McDuffie, Chief People Officer, has been named to Mogul's Top 100 People Leaders of 2026, joining a distinguished group of executives recognized for shaping culture, talent strategy, and the future of work; a cohort whose honorees represent a wide range of respected global organizations, including NIKE, The Walt Disney Company, The Coca-Cola Company, Netflix, and Procter & Gamble.
"This recognition is well deserved and reflects the impact Melkeya continues to have across our organization," said Daryl Kenningham, President and Chief Executive Officer of Group 1 Automotive. "She brings clarity, compassion, and discipline to the work of building a stronger culture for our people. Her leadership helps ensure that as Group 1 grows, we continue investing in the teams who make our business possible."
At Group 1, McDuffie leads the company's people strategy across a large and diverse automotive retail organization, supporting teams across the United States and United Kingdom. Her work includes advancing employee engagement, leadership development, talent acquisition, organizational effectiveness, and initiatives that strengthen the employee experience across Group 1's dealerships, collision centers, and corporate teams.
"I'm honored to be recognized by Mogul and to be included among so many talented people leaders," said McDuffie. "This recognition reflects the work of an incredible team and the commitment across Group 1 to listen, improve, and create an environment where our people can do their best work."
The full list of Mogul's Top 100 People Leaders of 2026 is available at onmogul.com/people-leaders.
About Group 1 Automotive, Inc.
Group 1 Automotive, Inc. is a leading automotive retailer with dealerships and collision centers in the United States and United Kingdom. Through its dealerships, Group 1 offers new and used vehicle sales, financing, service, parts, and collision repair. The company is committed to delivering exceptional customer experiences while supporting the people and communities it serves.
Media Contact:
Kimberly Barta
Head of Marketing, Brand and Communications
[email protected]
503-539-0756
, /PRNewswire/ -- Group 1 Automotive, Inc. (NYSE: GPI) ("Group 1" or the "Company"), an international automotive retailer with operations in the U.S. and U.K., today announced the promotion of Bob Andersen to Vice President, Corporate Development & Pre-Owned Operations.
In this expanded role, Andersen will lead Group 1's U.S. corporate development initiatives, including acquisitions and dispositions, while retaining responsibility for the Company's pre-owned business. Andersen joined Group 1 in 2023 and previously served in multiple C-level roles in both the franchise and independent space with a proven track record in both revenue and rooftop growth. Most recently, Andersen was Group 1's National Director of Pre-Owned Operations.
"Bob has consistently demonstrated strong leadership, sharp strategic insight, and a deep understanding of our business," said Daryl Kenningham, Group 1's President and Chief Executive Officer. "His ability to work effectively across our organization and with external partners makes him well-suited to lead our corporate development efforts."
Andersen will be supported by Group 1's Corporate Development, Transactions, and Real Estate team, which brings together expertise in deal strategy, pipeline development, financial diligence, valuation, transaction execution, real estate coordination, and cross-functional partnership. The team-based approach supports Group 1's ability to evaluate opportunities with discipline and navigate transactions effectively.
"Acquisitions continue to play an important role in Group 1's long-term growth strategy," said Andersen. "Our focus is on scaling in our existing regional markets where we can further leverage the Group 1 brand, while also evaluating new markets that bring meaningful opportunity. Group 1 offers sellers a strong path forward by aligning their local presence with enterprise-grade innovation and tailwinds."
Since 2004, Group 1 has grown total revenue from $5.4 billion to $22.6 billion, with acquisitions serving as a meaningful accelerator in key years. The announcement reinforces Group 1's continued focus on disciplined growth, operational excellence, and long-term value creation.
ABOUT GROUP 1 AUTOMOTIVE, INC.
Group 1 Automotive, Inc. is a leading automotive retailer with dealerships and collision centers in the United States and United Kingdom. Through its dealerships, Group 1 offers new and used vehicle sales, financing, service, parts, and collision repair. The company is committed to delivering exceptional customer experiences while supporting the people and communities it serves.
Media Contact:
Kimberly Barta
Head of Marketing, Brand and Communications
[email protected]
503-539-0756
Shares of DigitalOcean Holdings (DOCN 0.86%) spiked on Tuesday after the cloud computing provider highlighted the torrid growth in its artificial intelligence (AI)-focused offerings.
Image source: Getty Images.
A cloud for AI agents DigitalOcean's revenue jumped 22% year over year to $258 million in the first quarter. Its earnings before interest, taxes, depreciation, and amortization (EBITDA), in turn, leaped 21% to $105 million.
DigitalOcean's AI-related gains were stunning. Its AI customer annual run rate revenue (ARR) soared 221% to $170 million.
Today's Change
(
-0.86
%) $
-1.50
Current Price
$
173.25
With the launch of its AI-Native Cloud in April, DigitalOcean is positioning itself as a leading platform for AI agents. Its new Inference Engine is helping to reduce the costs of using AI models to make decisions and predictions.
DigitalOcean also acquired Katanemo Labs last month to further bolster its agentic AI capabilities.
"The Inference and agentic era needs its own cloud," CEO Paddy Srinivasan said. "DigitalOcean built it, and our record Q1 results demonstrate the strength of our platform."
Accelerating growth These encouraging results drove DigitalOcean to lift its full-year guidance. Management now sees revenue rising by roughly 26% to $1.14 billion in 2026.
Better still, DigitalOcean expects its revenue growth to accelerate to over 50% in 2027.
"We continue to invest in what we believe is a generational market opportunity, adding approximately 60 MW [megawatts] of incremental committed data center capacity that will come online throughout 2027 to support growing customer demand," Srinivasan said.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DigitalOcean. The Motley Fool has a disclosure policy.
DigitalOcean reported adjusted earnings per share of 44 cents, beating the consensus estimate of 27 cents. In addition, it reported revenue of $257.90 million, beating the consensus estimate of $249.74 million.
DigitalOcean raised its fiscal-year 2026 adjusted earnings per share guidance from between 75 cents and $1.00 to between $1.10 and $1.20, versus the consensus estimate of $1.02. Furthermore, it raised its fiscal-year 2026 revenue guidance from between $1.07 billion and $1.10 billion to between $1.13 billion and $1.14 billion, versus the consensus estimate of $1.09 billion.
The company anticipates second-quarter adjusted earnings per share between 20 cents and 23 cents, versus the consensus estimate of 24 cents. It sees revenue of between $272 million and $274 million, versus the consensus estimate of $260.75 million.
DigitalOcean shares rose 3.3% to trade at $157.73 on Wednesday.
These analysts made changes to their price targets on DigitalOcean following earnings announcement.
Barclays analyst Raimo Lenschow maintained the stock with an Overweight rating and raised the price target from $105 to $183. Piper Sandler analyst James Fish maintained DigitalOcean with a Neutral and raised the price target from $98 to $155. Morgan Stanley analyst Josh Baer maintained the stock with an Overweight rating and raised the price target from $75 to $175. Considering buying DOCN stock? Here’s what analysts think:
Photo via Shutterstock
Market News and Data brought to you by Benzinga APIs
Digital Ocean NYSE: DOCN is an AI infrastructure play potentially beyond compare. It not only owns and operates a network of high-performance data centers but also has the software stack to support them. It is a cloud computing solution for small and medium-sized businesses, enabling them access and scalability alongside ease of use, and the business is gaining traction. Plans include expanding its footprint over the coming year, driven by a rising tide of AI demand; the question for investors is how high this AI play can go.
Get DigitalOcean alerts:
DigitalOcean Accelerates, Outperforms, and Raises GuidanceDigitalOcean had a solid Q1 earnings report, with revenue growth topping 22%, accelerating sequentially and compared to the prior year.
DigitalOcean Today
$172.44 -2.32 (-1.32%)
As of 09:44 AM Eastern
This is a fair market value price provided by Massive. Learn more.
52-Week Range$25.56▼
$184.46P/E Ratio75.51
Price Target$146.36
Revenue outpaced the consensus by a substantial margin, indicating a fundamental misunderstanding of the growth opportunity, and is expected to continue accelerating in the upcoming quarters. Growth was driven by large clients and AI demand, with annual run-rate revenue (ARR) from large clients up by 180% and AI-related ARR up by 221%.
Margin news was mixed, with margin contracting in some comparisons and expanding in others. The critical details are that the core business is profitable, profitability improves with scale, and weaknesses are tied to spending increases. Spending increases aim to increase capacity and underpin management's decision to increase guidance. They now expect at least 50% revenue growth in the subsequent fiscal year and may be cautious in the estimate. The company is already expanding its footprint, and pricing is a factor to consider as well. Demand for GPU capacity is driving rental prices through the roof, and DigitalOcean is exposed to the market.
Strong Market Getting Stronger, But Upside May Be LimitedThe MACD indicator suggests that this rally is just getting started. It is a measure of market momentum and can be used to gauge whether a market is strengthening or weakening. In this case, the convergence between the MACD peak and price action suggests the market is strengthening and likely to continue higher over the long term, with periodic corrections aside.
Analysts, institutions, and valuation suggest the upside may be limited, but they are not the only factors in play. Analysts rate the stock as a conviction Moderate Buy with 75% Buy-side bias, but price action has outpaced the consensus price target. The likely outcome is that DOCN stock price corrects at some point, touching base with the consensus level before continuing its advance in the longer term. Additionally, institutions were selling heavily in late 2025 and early 2026, which presents a headwind for the market and could amplify any correction that forms.
Valuation is the biggest concern, as the stock trades at over 125X its current-year earnings forecast. The market is pricing in a robust outlook, but even so, valuation is expected to fall only slightly over the next few years, leaving the stock highly valued relative to its forecasts and tech peers. The worst-case scenario is that this company fails to meet its outlook, leading to a market reset and a massive stock price correction, but that is unlikely given the recent Q1 results and the guidance update.
2 Catalysts for DOCN Price Action May StrengthenWhile analysts and institutions limit the upside potential, they also provide support for this market. The market has outrun the consensus price target, but the trend remains positive, with recent revisions leading it into the high end of the range. Those revised price targets would be sufficient for more than 30% upside from the $150 level, where the DOCN stock price surged following the report. Institutions, on the other hand, sold heavily in early 2026 but reverted to buying in early Q2 and may continue to accumulate as the quarter progresses.
Catalysts for this stock include its aggressive expansion. The plans include more than tripling total capacity by early 2028, potentially driving revenue growth into the triple-digit range and sustaining it for several quarters. Risks include the cost of buildout, including a nearly-$1 billion equity raise, and the threat of dilution. As it stands, the share count is up approximately 10% at the end of Q1, and though the company is well-capitalized, additional funding is not out of the question. Delays, missteps, and cost-overruns will be reflected in the stock price.
DigitalOcean is leaning on debt to fund its expansion, and its balance sheet can handle the load. Highlights at Q1’s end include increased cash, current and total assets, with long-term debt and liabilities declining, equity improving, a net-cash position, and low total leverage. The likely outcome is that cash flow will enable debt reduction as the buildout progresses, with cash flow increasing over time and equity rising alongside it.
Should You Invest $1,000 in DigitalOcean Right Now?Before you consider DigitalOcean, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and DigitalOcean wasn't on the list.
While DigitalOcean currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Just getting into the stock market? These 10 simple stocks can help beginning investors build long-term wealth without knowing options, technicals, or other advanced strategies.
Key Takeaways DOCN topped Q1 2026 estimates: revenue $258M ( 22%), non-GAAP EPS 44 despite y/y drop.DigitalOcean AI Customer ARR reached $170M, up 221% YoY; AI-Native Cloud debuted at Deploy 2026.DOCN lifted 2026 revenue outlook to $1.130B-$1.145B as committed data center capacity rose to ~135MW. DigitalOcean Holdings (DOCN - Free Report) posted a sizable first-quarter 2026 earnings beat, even as profitability moved lower from the year-ago period. Non-GAAP earnings came in at 44 cents, down 21.4% year over year, but the figure beat the Zacks Consensus Estimate by 63%.
Revenue was $258.0 million, up 22.4% year over year and beat the consensus by 3.1%. The quarter’s outperformance was supported by retention and expansion in larger customer cohorts, with Annual Run-Rate Revenues (ARR) ending the period at $1.032 billion, up 22% year over year. AI Customer ARR was $170 million, which jumped 221% year over year.
DOCN shares rose 5.4% to close at $160.99 on May 6, following the results.
DOCN’s Larger Customer Cohorts Drove the UpsideDOCN’s release underscored that growth continues to be led by its biggest customers. Revenue from $1 million-plus customers rose 179% year over year to $183 million in ARR, and that cohort now represents 18% of total revenues.
Momentum was also visible one tier down. Revenues from $500,000-plus customers climbed 132% year over year and represents 21% of total revenues, while revenues from $100,000-plus customers rose 73% and now represent 30% of total revenues. Management tied the quarter’s revenue beat to strong retention in top Digital Native Enterprise cohorts and continued expansion among top cloud and AI-native customers.
DOCN’s AI-Native Cloud Push Expanded the Platform StoryDigitalOcean positioned the quarter around product breadth, highlighting the launch of its AI-Native Cloud at Deploy 2026. The company said it delivered more than 15 product launches across five integrated layers: infrastructure, core cloud, inference, data and managed agents.
The company has highlighted recent AI-native wins, including Cursor, Ideogram and Higgsfield AI, as examples of customers building production inference and related workloads on the platform, with AI customer ARR now generated primarily from non-bare metal services.
DOCN’s Margins Mixed as Operating Costs RoseDOCN’s cost structure showed clear investment alongside solid operating profitability. Gross profit was $144.7 million, translating to a gross margin of 56.1%, down from 61.5% in the year-ago quarter.
Operating expenses increased across the board. Research and development expense climbed to $48.8 million from $39.6 million, while sales and marketing rose to $21.7 million from $19.4 million. General and administrative expense increased to $37.6 million from $32.8 million.
On a non-GAAP basis, adjusted operating income was $64 million with a 25% margin (contracted from 30% reported in the year-ago quarter), while adjusted EBITDA was $104.6 million and the adjusted EBITDA margin held at 41% (unchanged year over year).
DigitalOcean’s Cash Flow Shifted as Investment AcceleratedThe balance sheet expanded sharply following the company’s follow-on offering, with cash, cash equivalents and restricted cash ending the quarter at $741.5 million. Net proceeds from the follow-on public offering were $888.8 million, and the company repaid $500.0 million of its term loan facility principal while also drawing $120.0 million during the quarter.
DigitalOcean generated $46.9 million of net cash from operating activities in the first quarter, down from $64.1 million a year earlier, reflecting working capital movement and higher cash interest costs. Capital spending remained meaningful, with $40 million of property and equipment expenditures and $4.7 million of internal-use software development.
Adjusted free cash flow was positive but modest at $2.2 million, compared with negative $0.8 million in the year-ago quarter.
DOCN Raised Its 2026 Outlook as Capacity Plans ExpandedDOCN guided second-quarter revenue to $272 million-$274 million, implying 24%-25% year-over-year growth. The company expects an adjusted EBITDA margin of 37%-38% and non-GAAP earnings between 20 cents per share and 23 cents per share.
For 2026, DigitalOcean raised its revenue outlook to $1.130 billion-$1.145 billion, calling for 25%-27% year-over-year growth, alongside an adjusted EBITDA margin of 37%-39% and an adjusted free cash flow margin of 9%-12%. Non-GAAP earnings are expected to be $1.10-$1.20 per share.
Management also pointed to incremental committed data center capacity of about 60 megawatts, bringing total committed capacity to roughly 135 megawatts, and said it now expects 2027 revenue growth to exceed 50%, with 2027 revenues projected to exceed $1.7 billion.
Zacks Rank & Stocks to ConsiderDigitalOcean currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector that are set to report their quarterly results are Docebo (DCBO - Free Report) , Cisco Systems (CSCO - Free Report) and Keysight Technologies (KEYS - Free Report) . Docebo and Keysight Technologies sport a Zacks Rank #1 (Strong Buy) each at present, while Cisco carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Docebo is set to report its quarterly results on May 8, while both Cisco and Keysight Technologies are set to report their quarterly results on May 13. Year to date, shares of Cisco and Keysight Technologies have returned 18.8% and 80.4%, respectively, while Docebo has dropped 10%.
DigitalOcean (DOCN 0.86%) is a cloud computing company that provides hundreds of services to small and medium-sized businesses (SMBs), enabling them to thrive in the digital age. The company is investing aggressively in artificial intelligence (AI) infrastructure to help its customers deploy this revolutionary technology in a simple and cost-effective way.
On May 5, DigitalOcean released its first-quarter 2026 operating results. The report was so strong that its stock blasted higher by 40%, to close at $152.77 on the day. According to The Wall Street Journal, even the most bullish analyst on Wall Street had predicted the stock would reach just $121 over the next 12 months.
Were analysts underestimating DigitalOcean, or is it simply overvalued now?
Image source: Getty Images.
DigitalOcean continues to expand its AI product portfolio The cloud industry is dominated by trillion-dollar giants like Amazon and Microsoft, but they mostly target large enterprises because they have the highest spending potential. This leaves the SMB cloud market wide open for providers like DigitalOcean. It captures these customers by offering affordable pricing, highly personalized support, and a simple dashboard to make deploying services easy.
In the first quarter, the company launched a new platform, DigitalOcean AI-Native Cloud, comprising five distinct layers. The bottom (and most important) layer is infrastructure, which includes 20 data centers fitted with the latest AI chips from suppliers like Nvidia and Advanced Micro Devices. DigitalOcean rents the computing capacity to its SMB customers, which can use it to deploy AI applications.
The other four layers work together to help SMBs turn all of that computing power into working AI software, whether they want to build data analysis tools, chatbots, or agents. The platform offers access to the latest AI foundation models from leading start-ups like OpenAI, which can help customers accelerate their development goals.
DigitalOcean allows customers to start with one chip and scale up as needed, which is perfect for running small AI workloads like web-based customer-service chatbots or agents. And the company is staying true to its original cloud business model, allowing customers to pay as they go with no lock-in contracts.
Today's Change
(
-0.86
%) $
-1.50
Current Price
$
173.25
DigitalOcean just significantly raised its revenue growth forecast DigitalOcean ended the first quarter with $1.03 billion in annual run-rate revenue (ARR), a 22% increase from the year-ago period. It was the third consecutive quarter of accelerating growth, highlighting the company's incredible momentum.
AI customers, specifically, accounted for $170 million of DigitalOcean's ARR at the end of the first quarter, and that figure soared by an eye-popping 221% year over year. Simply put, products like the AI-Native Cloud are quickly becoming the growth engine for the entire company, and that's likely to continue, as demand for computing capacity outstrips supply.
For that reason, DigitalOcean raised $800 million from investors in March, which will go toward building more AI data centers. As more capacity comes online, revenue growth is likely to accelerate further. In fact, management just raised its 2027 growth forecast from 30% to 50%, which is a big reason why DigitalOcean stock rocketed higher on May 5.
DigitalOcean stock is no longer cheap Based on DigitalOcean's trailing-12-month revenue, its stock is trading at a price-to-sales (P/S) ratio of 17, which is twice its long-term average of 8.1. If we assume the company grows its revenue by more than 50% in 2027, its forward P/S ratio is around 9.2.
Data by YCharts.
From that perspective, there probably isn't much upside left in the tank in the short term. In my opinion, the stock would be a good buy right now if the company could maintain a similar rate of revenue growth in 2028 and beyond, but management hasn't provided any long-term guidance just yet.
In light of DigitalOcean's spectacular first-quarter report, the stock has blown past even the most bullish price targets on Wall Street, and I expect many analysts to raise their forecasts soon. However, since the stock certainly isn't cheap, investors who buy it today need to maintain a long-term view of at least three years (but preferably more) to maximize their chances of earning a positive return. That time frame will give DigitalOcean time to grow into its valuation.
DigitalOcean Holdings, Inc. (DOCN) shares rise 279% since last year’s first institutional outlier signal.
DOCN is a cloud computing infrastructure company benefitting from the AI build-out; it operates in the U.S., Netherlands, Germany, Canada, Singapore, and other locations, and just introduced an AI-native cloud. In its first-quarter fiscal 2026 earnings, DOCN reported revenue of $258 million (a 22% year-over-year gain), adjusted EBITDA of $105 million (41% margin), and raised annual revenue guidance to a high point of $1.145 billion.
It’s no wonder DOCN shares are up 213% so far this year – and they could rise more. MoneyFlows data shows how Big Money investors are again betting heavily on the stock.
DigitalOcean Brings in Big Money Institutional volumes reveal plenty. In the last year, DOCN has enjoyed strong investor demand, which we believe to be institutional support.
Each green bar signals unusually large volumes in DOCN shares. They reflect our proprietary inflow signal, pushing the stock higher:
Source: www.moneyflows.com Plenty of technology names are under accumulation right now. But there’s a powerful fundamental story happening with DigitalOcean.
DigitalOcean Fundamental Analysis Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, DOCN has had strong sales and earnings growth:
Also, EPS is estimated to ramp higher this year by +37.9%.
Now it makes sense why the stock has been generating Big Money interest. DOCN has a track record of strong financial performance.
Marrying great fundamentals with MoneyFlows software has found some big winning stocks over the long term.
DigitalOcean has been a top-rated stock at MoneyFlows. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.
It’s up 279% since its first appearance on the rare Outlier 20 report in October 2025. The blue bars below show when DOCN was a top pick…institutional inflows drive gains:
Source: www.moneyflows.com Tracking unusual volumes reveals the power of money flows.
This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward.
DigitalOcean Price Prediction The DOCN action isn’t new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.
Disclosure: the author holds no position in DOCN at the time of publication.
If you are a Registered Investment Advisor (RIA) or are a serious investor, take your investing to the next level and follow our free weekly MoneyFlows insights.
Related Articles
Nasdaq 100, Dow Jones 30 and S&P 500 Forecasts – US Indices Could Drift into the WeekendGME, MSTR and AMC Forecasts – Meme and Crypto Stocks Offering Opportunities?S&P500: SpaceX IPO and Iran Deal Set Stage for Market VolatilityAbout the Author
Lucas is a well-versed equity investor and educator. He currently is co-founder of research and analytics firm, MAPsignals.com, which focuses on finding outlier stocks by following the Big Money.
Nvidia (NVDA +0.64%) remains the center of the artificial intelligence boom, but the stock is up just 15% in 2026, both because investors worry the current pace of AI spending is unsustainable and because they question the durability of Nvidia's dominance in the AI infrastructure market.
Meanwhile, DigitalOcean (DOCN 0.86%) is a little-known cloud computing company whose aggressive expansion into AI services has led to tremendous shareholder returns. The stock is up 240% this year, and most Wall Street analysts say it's still undervalued. The median target price of $177 per share implies 8% upside from its current share price of $164.
Here's what investors should know about these AI stocks.
Image source: Getty Images.
Nvidia: The dominant supplier of AI infrastructure Nvidia dominates the artificial intelligence infrastructure. The company is best known for its GPUs, chips that accelerate AI workloads, but its greatest competitive strength lies in vertical integration. Nvidia builds rack-scale AI systems comprising chips and networking, and it supplements its hardware with an unmatched software ecosystem of developers.
That full-stack strategy affords Nvidia a durable competitive moat. The company has nearly 90% market share in AI accelerators, and it captures over 40% of AI data center spending. Nvidia may lose some market share in the coming years as custom chips (e.g., Alphabet's TPU) become more popular, but it will almost certainly remain the dominant supplier of AI infrastructure.
"Our pace of innovation, particularly at our scale, is unmatched, fueled by an annual R&D budget approaching $20 billion and our ability to extreme co-design across compute and networking across chips, systems, algorithms, and software," CFO Colette Kress recently told analysts. "We intend to deliver x-factor leaps in performance per watt every generation and extend our leadership position over the long term."
Nvidia has an important catalyst on the horizon in the upcoming launch of its Vera Rubin platform, which brings together Rubin GPUs and Vera CPUs. It works with Groq 3 LPUs (language processing units) to speed up inference tasks. When paired with LPUs, Rubin GPUs deliver up to 35 times more throughput per watt than the previous generation of Blackwell GPUs.
Wall Street estimates Nvidia's adjusted earnings will increase at 53% annually through the fiscal year ending in January 2028. That makes the current valuation of 45 times adjusted earnings look quite reasonable. It's not too late for patient investors to buy Nvidia.
Today's Change
(
-0.86
%) $
-1.50
Current Price
$
173.25
DigitalOcean: The cloud company simplifying AI services DigitalOcean provides cloud infrastructure and platform services to small and medium-sized businesses, particularly those in the technology sector. Hyperscalers like Amazon and Microsoft undoubtedly have broader portfolios, but their products are built for large customers with complex needs, deep pockets, and large IT departments.
By comparison, DigitalOcean offers fewer and less advanced services, but its platform is designed to simplify cloud computing. Its intuitive user interface with click-and-go options lets developers spin up servers and deploy applications quickly, often in just a few minutes. DigitalOcean also provides no-cost 24/7 technical support to all customers.
The number of inference tokens processed daily is projected to grow over tenfold by 2030, meaning demand for AI infrastructure is expected to increase substantially. DigitalOcean hopes to capitalize on this boom with its AI-Native Cloud, which brings together the servers and software needed for agentic workloads. CEO Paddy Srinivasan called it the "most significant product launch" in company history.
DigitalOcean reported solid first-quarter financial results. Revenue increased 22% to $258 million, driven by exceptionally strong sales growth among AI customers. Non-GAAP net income dropped 21% to $0.44 per diluted share, but that was due to significant spending on AI infrastructure. "We beat every financial target we shared in our last call," Srinivasan told analysts.
DigitalOcean also gave very encouraging guidance, bolstered by what Srinivasan sees as a "generational market opportunity" in AI. The company says revenue growth will hit 26% in 2026, before accelerating to over 50% in 2027. Management previously predicted revenue would grow 30% next year, but the company recently secured 60 megawatts of additional compute capacity that will boost sales.
Wall Street estimates DigitalOcean's adjusted earnings will grow at 23% annually through 2028. That makes the current valuation of 81 times adjusted earnings look expensive. The market is excited by the upward revision to revenue guidance, and the stock has climbed more than 50% since the company reported earnings on May 5. I think investors should wait for a pullback before buying shares, or at least keep any purchases very small.
On May 12, 2026, DigitalOcean Holdings Inc DOCN shares fell 5.0% today, closing at $155.72. This decline comes despite a remarkable performance over the past year, with the stock soaring 392.6%. DOCN has experienced a 52-week high of $164.77 and a low of $25.56, highlighting significant volatility.
GF Value™ verdict: Current price of $155.72 is 250.0% overvalued compared to the GF Value™ of $44.49.GF Score™ of 75/100 indicates that DOCN is above average in overall quality and performance.Notable signal: Insiders sold $63.1 million in shares over the past three months, with no buying activity reported. Is DOCN Overvalued or Undervalued? According to the GF Value™, DigitalOcean is significantly overvalued at its current price of $155.72. The estimated fair value of $44.49 indicates a substantial 250.0% downside risk. This overvaluation suggests that the stock may be trading at a premium compared to its intrinsic value, making it less attractive for potential investors. The significant gap between the current price and the GF Value™ underscores the need for caution, as the potential for a price correction exists if market sentiment shifts.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Given the current overvaluation, investors might consider the risks associated with holding or entering a position in DOCN at this price level.
How Does DOCN's Valuation Compare to Its History? MetricCurrentHistorical P/E (TTM)68.0x41.6x (5-Year Median) Forward P/E138.7xN/A The current P/E ratio of 68.0x is significantly above its 5-year median of 41.6x, indicating that DOCN is trading at a premium compared to its historical valuation. Moreover, the forward P/E of 138.7x further emphasizes the high expectations that the market has for the company's future earnings. This P/E analysis aligns with the GF Value™ verdict of overvaluation, suggesting that the stock may not be justified at its current price based on historical earnings metrics.
What Does DOCN's GF Score™ Tell Us? MetricRating GF Score™75/100 Financial Strength6/10 Profitability5/10 Growth10/10 Valuation1/10 Momentum6/10 The GF Score™ of 75/100 indicates that DigitalOcean is above average in terms of overall quality and performance. Its strongest aspect is growth, rated at 10/10, reflecting the company’s robust revenue expansion and market position. However, the valuation rank of 1/10 is concerning, highlighting the stock's significant overvaluation relative to its intrinsic value. The financial strength and profitability ranks suggest moderate stability, but they do not compensate for the valuation concerns. Overall, while there are positive growth prospects, the valuation remains a critical weakness.
What Are Insiders Doing with DOCN Stock? In the last three months, insiders at DigitalOcean have sold a substantial $63.1 million worth of shares, with no buying activity reported. This pattern of selling may indicate a lack of confidence from those closest to the company regarding its current valuation or future performance. High insider selling can often be a red flag for potential investors, suggesting that insiders may believe that the stock price is stretched or that they foresee challenges ahead.
What This Means for Investors Based on the GF Value™ assessment, DigitalOcean Holdings Inc DOCN is currently overvalued. With a current price significantly exceeding the estimated fair value, potential investors may want to exercise caution. The high P/E ratio and substantial insider selling further reinforce the concerns regarding the stock's valuation, indicating a potential risk for those considering an investment at this time.
For the complete analysis, visit the DigitalOcean Holdings Inc DOCN stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is DOCN's GF Score™?
DOCN has a GF Score™ of 75/100, suggesting that it is above average in terms of quality and performance potential.
Is DOCN overvalued or undervalued?
DOCN is currently overvalued, with a significant discrepancy between its market price and the GF Value™ of $44.49.
What is DOCN's P/E ratio?
DOCN's P/E ratio is 68.0x, which is 64% above its 5-year median of 41.6x, indicating that the stock is trading at a premium compared to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Shares of cloud computing company DigitalOcean (DOCN 0.86%) shot up by 40% on May 5 after the company released terrific results for the first quarter of 2026, and anyone following the company's business model may not be entirely surprised by this big pop.
In fact, it was just a few days ago that I predicted DigitalOcean stock could become a multibagger by the end of 2026. So, it was easy to see why investors piled into this cloud stock after it posted a significant surge in AI revenue last quarter and raised its 2027 guidance.
Let's take a closer look at what's working for DigitalOcean and check if this high-flying tech stock has room for more upside.
Image source: Getty Images.
AI has supercharged DigitalOcean's growth DigitalOcean operates an on-demand cloud computing platform, primarily serving start-ups, developers, and small businesses. The company's focus on making it simpler and cheaper for smaller enterprises to deploy and scale AI applications in the cloud explains why demand for its AI offerings is growing.
Today's Change
(
-0.86
%) $
-1.50
Current Price
$
173.25
DigitalOcean's annual run rate revenue (ARR) from its AI customers soared 221% year over year in Q1 to $170 million. This was well above the 22% growth in its overall ARR last quarter. DigitalOcean's focus on offering an end-to-end cloud computing platform for running agentic artificial intelligence (AI) and inference applications in a more cost-effective, simpler way is resonating with customers.
DigitalOcean customers can rent cloud computing infrastructure, including compute, storage, and networking, from the company. At the same time, its software-as-a-service (SaaS) solutions enable them to build, deploy, and scale AI applications. It is worth noting that DigitalOcean's inference services are proving hugely popular. The company's ARR for its inference services increased by a whopping 487% year over year in Q1.
DigitalOcean's management is confident that the growing adoption of AI inference applications will be a long-term tailwind for the company. This explains why DigitalOcean is building more data centers to capture the available end-market opportunity. The company plans to add 31 megawatts (MW) of data center capacity this year, followed by another 60 MW in 2027 and 2028.
This new capacity should help accelerate DigitalOcean's growth, especially considering that its revenue backlog is now growing at a healthy pace. The company reported a 17.3x increase in its remaining performance obligations (RPO) last quarter to $243 million, which was well above the 22% increase in revenue to $258 million.
RPO is the total value of contracts that a company has yet to fulfill at the end of a period. The exponential growth in this metric suggests that DigitalOcean's growth is poised to accelerate, which explains why it has significantly upgraded its guidance.
DigitalOcean now expects 26% revenue growth in 2026, up from its earlier estimate of 21%. However, it sees a significant jump of more than 50% in revenue in 2027, well above the 30% growth it guided for in February this year. But will this upgraded forecast be enough for it to deliver more gains?
Investors can still expect substantial upside DigitalOcean stock is already up 223% in 2026 as of this writing. However, it can continue to climb, as its guidance clearly suggests stronger growth is in the cards for the company. This explains why analysts have significantly upgraded their revenue growth expectations.
Data by YCharts
Don't be surprised if DigitalOcean ends up exceeding Wall Street's growth expectations. But even if it achieves $2.47 billion in revenue in 2028 and trades at even 10 times sales at that time, a discount to its current price-to-sales ratio of 18.6, its market cap could jump to $25 billion. That suggests potential gains of 47% over its current market cap.
Of course, I have assumed that DigitalOcean will trade at a premium to the U.S. tech sector's average of 7.5 after three years, but this can be justified by the company's ability to grow revenue much faster than analysts' expectations. So, you can still consider adding this cloud stock to your portfolio as it is primed to deliver more upside.
BROOMFIELD, Colo.--(BUSINESS WIRE)--DigitalOcean Holdings, Inc. (NYSE: DOCN), the AI-Native Cloud, purpose-built for inference and agentic workloads, today announced that Chief Executive Officer Paddy Srinivasan and Chief Financial Officer Matt Steinfort will participate in a fireside chat at JP Morgan's Global Technology, Media and Communications Conference on Tuesday May, 19 at 11:15 a.m. (PT) / 2:15 p.m. (ET). A live webcast will be available at https://jpmorgan.metameetings.net/events/tmc26.
BROOMFIELD, Colo.--(BUSINESS WIRE)--DigitalOcean (NYSE: DOCN) today announced that Hippocratic AI's Polaris system has reached 10 million patient calls at a 99.9% clinical safety score, running on NVIDIA HGX™ B300 GPUs on DigitalOcean's AI-Native Cloud, a five-layer, integrated stack purpose built for production AI. This milestone is the result of DigitalOcean engineering its inference platform for the latency, reliability, and concurrency demands of safety-critical healthcare workloads, delive.
DigitalOcean (NYSE: DOCN) today announced that Hippocratic AI's Polaris system has reached 10 million patient calls at a 99.9% clinical safety score, running on NVIDIA HGX™ B300 GPUs on DigitalOcean's AI-Native Cloud, a five-layer, integrated stack purpose built for production AI. This milestone is the result of DigitalOcean engineering its inference platform for the latency, reliability, and concurrency demands of safety-critical healthcare workloads, delivering 2× prefill speedup and ~30% higher per-node throughput, developed in close collaboration with both NVIDIA and Hippocratic AI. The results demonstrate why an increasing number of production AI workloads are choosing DigitalOcean's AI-Native Cloud as the purpose-built home for inference at scale.
Hippocratic AI's Polaris system has reported a 99.9% clinical safety score and an average patient rating of 8.95 out of 10 across more than 10 million real patient calls, supported by human evaluation involving more than 7,500 clinical staff. With more than 180 million patient interactions to date across chronic disease management, medication adherence, care gap closure, and clinical scheduling, Hippocratic AI is operating at a scale where the line between infrastructure performance and patient safety disappears.
"Polaris is built for the realities of clinical care: long sessions, real human conversations, zero room for error. With DigitalOcean and NVIDIA, we have early access to NVIDIA HGX™ B300 and the optimization techniques it unlocks, including NVFP4 quantization,” said Debajyoti Datta, Co-Founder, Hippocratic AI. “That is what allows us to hold a 400-millisecond time-to-first-token at production scale, on the clinical conversations our patients depend on."
Engineered to Support Safety-Critical Inference
Production healthcare AI breaks the assumptions most inference stacks are built on. Sessions are long. Tokens are time-sensitive. A dropped connection in the middle of a care plan retrieval is not a UX bug. It is a clinical interruption. Meeting that bar requires deep platform engineering and reliability at scale, the kind that off-the-shelf GPU access cannot provide and that only a purpose-built inference cloud can deliver.
Over the past year, the engineering teams at DigitalOcean worked in close collaboration with Hippocratic AI to optimize every layer of the inference stack. DigitalOcean engineered its AI-Native Cloud with hardware-aware scheduling, optimized inference runtimes, and platform-level scaling tuned for sustained high-concurrency workloads. Hippocratic AI's model team contributed proprietary inference work, including FP8 and NVFP4 quantization, KV-cache optimization, custom MoE kernels, and a cache-aware routing architecture that maximizes KV-cache hit rate and context reuse across long-horizon clinical sessions. NVIDIA provided early access to next-generation HGX™ B300 hardware, alongside engineering collaboration on Hopper and Blackwell architecture.
The combined result, on long-context clinical sessions, is approximately 30% higher per-node throughput and a 2× reduction in prefill latency, compared to a prior-generation stateless serving configuration. These gains build on the production efficiency Hippocratic AI announced earlier this month at DigitalOcean Deploy, where the company reported 2× production inference throughput and a 40% reduction in end-to-end P99 latency on the AI-Native Cloud.
"What Hippocratic AI has built in healthcare AI is remarkable, hundreds of millions of real patient interactions across some of the most complex and sensitive moments in people's lives,” said Paddy Srinivasan, Chief Executive Officer, DigitalOcean. “Delivering that at 99.9% clinical safety is what production AI looks like when it matters most. This is what purpose-built inference delivers, and it's what our AI-Native Cloud makes possible. Hippocratic AI's results are the proof."
Among the First Production Customers on NVIDIA HGX™ B300
Having Hippocratic AI among the first production customers on NVIDIA HGX™ B300 GPUs, made available through DigitalOcean's early work with NVIDIA, means DigitalOcean is validating its inference platform against one of the most demanding real-world workloads, not synthetic benchmarks. For workloads where every token affects clinical experience, Blackwell Ultra unlocks a step-change in capacity per node, allowing Hippocratic AI to support more concurrent sessions at the same latency targets and to extend context windows on long-horizon clinical conversations.
"The demands of safety-critical AI workloads are fundamentally different from consumer applications,” said Dave Salvator, Director of Accelerated Computing Products, NVIDIA. “DigitalOcean and Hippocratic AI are demonstrating how tightly integrated infrastructure and inference optimization, built on NVIDIA Hopper and Blackwell architecture, can deliver both performance and reliability at scale."
A Different Bar for Healthcare AI Infrastructure
The infrastructure requirements of safety-critical AI are not the requirements of consumer or enterprise AI scaled up. They are different in kind. Latency translates directly into clinical workflow quality. Reliability is measured in successful patient interactions, not nine-fives uptime. Cost efficiency determines whether a healthcare AI workload can scale to serve a population, not just a pilot.
In healthcare AI, infrastructure is not just about performance. It is foundational to patient safety. The Hippocratic AI deployment on the DigitalOcean AI-Native Cloud reflects this shift, and the platform engineering behind it shows what production AI looks like when infrastructure, model optimization, and hardware are designed together for outcomes that matter.
Read the full customer case study, including a video interview with Hippocratic AI Co-Founder Debajyoti Datta, at digitalocean.com/customers/hippocratic-ai.
About DigitalOcean
DigitalOcean is the AI-Native Cloud purpose-built for the inference and agentic era. Its five-layer integrated platform - spanning infrastructure, core cloud, inference, data, and managed agents - is open throughout with no vendor lock-in, giving builders everything they need to start fast, scale production AI workloads, and improve unit economics. More than 650,000 customers globally trust DigitalOcean to build, ship, and scale their applications. Learn more at digitalocean.com.
About Hippocratic AI
Hippocratic AI has developed the safest generative AI Agents for healthcare. The company believes that generative AI has the ability to bring healthcare abundance to every person in the world. The company focuses on building non-diagnostic patient-facing clinical AI agents and does not allow its agents to be used to prescribe or diagnose. Hippocratic AI has received a total of $404 million in funding and is backed by leading investors, including Andreessen Horowitz, General Catalyst, Kleiner Perkins, Avenir, NVIDIA's NVentures, Premji Invest, SV Angel, Google’s CapitalG, and numerous health systems. Learn more at https://hippocraticai.com/.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260527711308/en/
BROOMFIELD, Colo.--(BUSINESS WIRE)--DigitalOcean Holdings, Inc. (NYSE: DOCN), the AI-Native Cloud, purpose-built for inference and agentic workloads, today announced that Chief Financial Officer Matt Steinfort and SVP of Corporate Development and Investor Relations Radu Patrichi will participate in a fireside chat at the Bank of America Global Technology Conference on Wednesday June, 3 at 2:00 p.m (PT) / 5:00 p.m (ET). A live webcast will be available at https://bofa.veracast.com/webcasts/bofa/.
