GrowGeneration (NASDAQ:GRWG) versus Group 1 Automotive (NYSE:GPI) Critical Contrast
by Kim Johansen · The Markets DailyGroup 1 Automotive (NYSE:GPI – Get Free Report) and GrowGeneration (NASDAQ:GRWG – Get Free Report) are both consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.
Volatility and Risk
Group 1 Automotive has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, GrowGeneration has a beta of 2.54, suggesting that its stock price is 154% more volatile than the S&P 500.
Earnings and Valuation
This table compares Group 1 Automotive and GrowGeneration”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Group 1 Automotive | $22.15 billion | 0.14 | $325.20 million | $24.01 | 10.59 |
| GrowGeneration | $166.68 million | 0.52 | -$24.05 million | ($0.27) | -5.44 |
Group 1 Automotive has higher revenue and earnings than GrowGeneration. GrowGeneration is trading at a lower price-to-earnings ratio than Group 1 Automotive, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Group 1 Automotive and GrowGeneration, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Group 1 Automotive | 3 | 2 | 5 | 0 | 2.20 |
| GrowGeneration | 1 | 1 | 1 | 0 | 2.00 |
Group 1 Automotive currently has a consensus target price of $341.67, suggesting a potential upside of 34.43%. GrowGeneration has a consensus target price of $2.50, suggesting a potential upside of 70.07%. Given GrowGeneration’s higher probable upside, analysts plainly believe GrowGeneration is more favorable than Group 1 Automotive.
Profitability
This table compares Group 1 Automotive and GrowGeneration’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Group 1 Automotive | 1.31% | 15.66% | 4.43% |
| GrowGeneration | -10.07% | -17.44% | -11.52% |
Institutional & Insider Ownership
99.9% of Group 1 Automotive shares are held by institutional investors. Comparatively, 36.0% of GrowGeneration shares are held by institutional investors. 2.4% of Group 1 Automotive shares are held by company insiders. Comparatively, 8.1% of GrowGeneration shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Summary
Group 1 Automotive beats GrowGeneration on 10 of the 14 factors compared between the two stocks.
About Group 1 Automotive
Group 1 Automotive, Inc., through its subsidiaries, operates in the automotive retail industry in the United States and the United Kingdom. The company sells new and used cars, light trucks, and vehicle parts, as well as service and insurance contracts; arranges related vehicle financing; and offers automotive maintenance and repair services. Group 1 Automotive, Inc. was incorporated in 1995 and is headquartered in Houston, Texas.
About GrowGeneration
GrowGeneration Corp., through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company engages in the marketing and distribution of nutrients, additives, growing media, lighting, and environmental control systems, as well as other indoor and outdoor growing products. It operates a chain of stores in California, Colorado, Michigan, Maine, Oklahoma, Oregon, Washington, Montana, New York, Ohio, Mississippi, Missouri, Arizona, Rhode Island, Florida, Massachusetts, Virginia, New Jersey, and New Mexico, as well as growgeneration.com, an online superstore for cultivators, a wholesale business for resellers, HRG Distribution, and benching, racking, and storage solutions and MMI. The company was formerly known as Easylife Corp. GrowGeneration Corp. was founded in 2008 and is based in Greenwood Village, Colorado.