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Group 1 Automotive, Inc.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Auto - DealershipsSector: Consumer Cyclical

Fair Value Summary

Current Price$408.85
5Y Range239.99 – 594.17
5Y Selected417.08
(-) Safety Margin68.48%
5Y Buy Price$131.46
Upside (to Buy Price)-67.85%
10Y Range623.97 – 1,208.16
10Y Selected916.06
(-) Safety Margin68.48%
10Y Buy Price$288.74
Upside (to Buy Price)-29.38%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9880
Revenue R2 (10Y)0.7707
Net Income R2 (5Y)0.1950
Net Income R2 (10Y)0.7301
EBITDA R2 (5Y)0.4670
EBITDA R2 (10Y)0.8145
FCF R2 (5Y)0.4589
FCF R2 (10Y)0.0916
Safety Score0.3152

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth19.54%17.81%16.09%14.36%12.63%10.91%9.18%7.45%5.73%4.00%
Revenue23,829.6828,074.6432,591.0237,271.2041,979.9046,558.6050,832.7554,621.5457,749.5760,059.55
EBITDA1,285.171,514.101,757.682,010.092,264.032,510.972,741.482,945.823,114.513,239.09
D&A-132.39-155.97-181.06-207.07-233.23-258.66-282.41-303.46-320.84-333.67
EBIT1,152.781,358.131,576.611,803.022,030.812,252.312,459.072,642.362,793.682,905.42
Pro forma Taxes-277.19-326.57-379.10-433.54-488.31-541.57-591.29-635.36-671.75-698.61
NOPAT875.591,031.571,197.511,369.481,542.501,710.741,867.782,007.002,121.932,206.81
Capital Expenditures-294.99-347.54-403.44-461.38-519.67-576.35-629.26-676.16-714.88-743.48
NWC Investment-417.10-454.54-483.60-501.14-504.19-490.28-457.67-405.69-334.94-247.35
(+) D&A132.39155.97181.06207.07233.23258.66282.41303.46320.84333.67
Free Cash Flow295.90385.46491.53614.03751.86902.771,063.271,228.601,392.951,549.65
Diluted Shares Outstanding12,994,750.0012,994,750.0012,994,750.0012,994,750.0012,994,750.0012,994,750.0012,994,750.0012,994,750.0012,994,750.0012,994,750.00

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.39%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF293.33370.33432.85495.63556.27612.23660.94700.03727.48741.83
Raw: 11,467.77
8,123.15
Raw: 23,636.25
10,832.79

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value10,271.5716,423.71
(-) Net Debt5,366.535,366.53
Equity Value4,905.0411,057.18
(/) Shares Out12.9912.99
Fair Value$377.46$850.90
(-) Safety Margin68.48%68.48%
Buy Price$118.98$268.20
Current Price$408.85$408.85
Upside (to Buy Price)-70.90%-34.40%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.89%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF293.06368.78427.12484.63538.99587.82628.82659.96679.61686.72
Raw: 9,327.47
6,372.61
Raw: 19,224.86
8,119.32

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value8,485.1913,474.82
(-) Net Debt5,366.535,366.53
Equity Value3,118.668,108.30
(/) Shares Out12.9912.99
Fair Value$239.99$623.97
(-) Safety Margin68.48%68.48%
Buy Price$75.65$196.67
Current Price$408.85$408.85
Upside (to Buy Price)-81.50%-51.90%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.89%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.890.830.760.710.650.600.560.52
PV UFCF293.60371.90438.71506.98574.28637.90695.02742.93779.21801.93
Raw: 14,839.88
10,902.16
Raw: 30,586.50
15,223.82

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value13,087.6321,066.29
(-) Net Debt5,366.535,366.53
Equity Value7,721.1115,699.76
(/) Shares Out12.9912.99
Fair Value$594.17$1,208.16
(-) Safety Margin68.48%68.48%
Buy Price$187.28$380.81
Current Price$408.85$408.85
Upside (to Buy Price)-54.19%-6.86%

Reverse DCF: Market Implied Growth

Current Price$408.85
WACC Used9.1%
IMPLIED REVENUE GROWTH92.14%
Metric2027202820292030203120322033203420352036
Implied Revenue43,305.4083,209.06159,881.86307,204.64590,277.661,134,187.692,179,282.384,187,377.248,045,826.5915,459,635.43
Constant Implied Growth92.14%92.14%92.14%92.14%92.14%92.14%92.14%92.14%92.14%92.14%
Implied Free Cash Flow4.338.3215.9930.7259.03113.42217.93418.74804.581,545.96
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF4.036.7211.8320.8336.6964.62113.82200.45353.04621.78

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$100.0023.89%$207.37107.37%
20182018-12-31$52.7220.53%$82.1455.80%
20172017-12-31$70.9712.20%$-162.76-329.33%
20162016-12-31$77.946.09%$83.567.21%
20152015-12-31$75.704.25%$-101.78-234.45%
20142014-12-31$89.628.39%$-57.29-163.93%
20132013-12-31$71.0210.60%$-136.09-291.62%
20122012-12-31$61.9910.22%$-253.04-508.19%
20112011-12-31$51.8010.08%$88.8871.58%
20102010-12-31$41.7611.74%$-190.20-555.47%
20092009-12-31$28.3514.25%$357.191,159.95%
20082008-12-31$10.7716.98%$-26.18-343.06%
20072007-12-31$23.7510.65%$-210.02-984.31%
20062006-12-31$51.72-0.50%$-57.23-210.65%
20052005-12-31$31.43-5.28%$116.96272.13%
20042004-12-31$31.50-5.68%$-24.63-178.21%
20032003-12-31$36.191.32%$166.08358.90%
20022002-12-31$23.886.85%$-4.55-119.07%
20012001-12-31$28.518.47%$49.0772.13%
20002000-12-31$9.387.20%$50.17434.86%
19991999-12-31$13.947.13%$-80.86-680.08%
19981998-12-31$26.0011.00%$-84.57-425.26%
19971997-12-31$9.0618.31%$-61.89-783.07%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$900.98
Median
$854.51
10th Percentile
$630.63
90th Percentile
$1,229.11

Fair Value Distribution

$364.63 - $457.81
5
$457.81 - $550.98
25
$550.98 - $644.16
88
$644.16 - $737.33
152
$737.33 - $830.51
174
$830.51 - $923.68
164
$923.68 - $1,016.86
130
$1,016.86 - $1,110.03
80
$1,110.03 - $1,203.21
71
$1,203.21 - $1,296.38
44
$1,296.38 - $1,389.55
27
$1,389.55 - $1,482.73
11
$1,482.73 - $1,575.90
11
$1,575.90 - $1,669.08
8
$1,669.08 - $1,762.25
5
$1,762.25 - $1,855.43
2
$1,855.43 - $1,948.60
1
$1,948.60 - $2,041.78
0
$2,041.78 - $2,134.95
0
$2,134.95 - $2,228.13
2