Lithia Motors (LAD) AI Stock Analysis

• Market Cap: $8.34B
• Dividend Yield: 0.63%
• Average Volume (3M): 300.58K
• Price to Earnings (P/E): 9.9
• Beta (1Y): 0.97
• Revenue Growth: 8.56%
• EPS Growth: 17.84%
• Country: US
• Employees: 30,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Dealerships
• EPS (TTM): 9.50
• Shares Outstanding: 24,250,030
• 10 Day Avg. Volume: 342,405
• 30 Day Avg. Volume: 300,582
• PEG Ratio: -0.66
• Price to Book (P/B): 1.45
• Price to Sales (P/S): 0.27
• P/FCF Ratio: 130.94
• Enterprise Value/Market Cap: 2.67
• Enterprise Value/Revenue: 0.59
• Enterprise Value/Gross Profit: 3.93
• Enterprise Value/Ebitda: 9.89
• 1Y Price Target: $383.14
• Price Target Upside: 11.41% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 35.59
• Revenue Forecast (FY): $37.80B

• Rating: 76 Outperform
• Price Target: $368.00 ▲(7.01% Upside)

Lithia Motors' strong earnings performance and attractive valuation are the primary drivers of its stock score. The technical indicators support a positive outlook, while corporate events and earnings call insights further enhance confidence in the company's strategic direction. However, challenges in profitability margins and cash flow generation slightly temper the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Strategic Acquisitions

Strategic acquisitions enhance market position and revenue base, strengthening competitive advantage and growth potential.

High-Margin Segments

Focus on high-margin segments like aftersales boosts profitability, ensuring sustainable financial performance.

Negative Factors

Cash Flow Challenges

Declining cash flow may hinder operational flexibility and investment capacity, affecting long-term growth and stability.

Profitability Margins

Low profitability margins can limit reinvestment in business operations and reduce competitive edge over time.

SG&A Efficiency

Inefficiencies in SG&A can erode margins and impact overall profitability, necessitating improved cost management.

Lithia Motors Business Overview & Revenue Model

Company Description

Lithia Motors, Inc. operates as an automotive retailer in the United States. The company operates through three segments: Domestic, Import, and Luxury. It offers new and used vehicles; vehicle financing services; warranties, insurance contracts, and vehicle and theft protection services; and automotive repair and maintenance services, as well as sells vehicle body and parts under the Driveway and GreenCars brand names. As of February 18, 2022, the company operated through 278 stores. It also offers its products online through 300 websites. Lithia Motors, Inc. was founded in 1946 and is headquartered in Medford, Oregon.

How the Company Makes Money

Lithia Motors generates revenue through several key streams. The primary source of income comes from the sale of new and used vehicles, which includes a wide range of makes and models from various manufacturers. Additionally, the company earns significant revenue from financing solutions offered to customers at the point of sale, often in partnership with financial institutions. Service and repair revenue is another substantial stream, stemming from their service departments that provide maintenance and repair work on vehicles. Furthermore, Lithia Motors benefits from parts sales, which complement their service offerings. The company also engages in strategic acquisitions of dealerships, which contribute to revenue growth and market expansion. Partnerships with manufacturers and financial companies enhance their service offerings, enabling Lithia to provide competitive financing options and expand their customer base.

Lithia Motors Financial Statement Overview

Summary

Lithia Motors exhibits strong revenue growth and improved leverage, but faces challenges with profitability margins and cash flow generation. The company needs to enhance operational efficiency and cash flow management to sustain its growth trajectory.

Income Statement

Lithia Motors shows a solid revenue growth trajectory with a 22.4% increase in TTM. Gross profit margin is stable at 15.2%, but net profit margin is relatively low at 3.6%. EBIT and EBITDA margins have decreased, indicating potential cost pressures.

Balance Sheet

The company's debt-to-equity ratio has improved significantly to 0.32 in TTM, indicating reduced leverage. Return on equity is strong at 20.0%, reflecting efficient use of equity. However, the equity ratio is not explicitly provided, which limits full assessment.

Cash Flow

Free cash flow has declined sharply by 58.1% in TTM, raising concerns about cash generation. The operating cash flow to net income ratio is low at 0.06, suggesting potential cash flow challenges. However, free cash flow to net income ratio is moderate at 0.42.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	37.61B	36.19B	31.04B	28.19B	22.83B	13.13B
Gross Profit	5.67B	5.56B	5.23B	5.15B	4.26B	2.22B
EBITDA	2.25B	2.26B	2.16B	2.19B	1.78B	875.80M
Net Income	898.90M	802.00M	1.00B	1.25B	1.06B	470.30M
Balance Sheet
Total Assets	24.52B	23.13B	19.63B	15.01B	11.15B	7.90B
Cash, Cash Equivalents and Short-Term Investments	419.50M	402.20M	941.40M	246.70M	174.80M	162.50M
Total Debt	14.72B	13.86B	11.33B	7.99B	4.96B	4.17B
Total Liabilities	17.73B	16.45B	13.35B	9.76B	6.48B	5.24B
Stockholders Equity	6.77B	6.66B	6.21B	5.21B	4.63B	2.66B
Cash Flow
Free Cash Flow	135.00M	73.70M	-702.60M	-913.20M	1.54B	578.50M
Operating Cash Flow	472.20M	425.10M	-472.40M	-610.10M	1.80B	746.30M
Investing Cash Flow	-513.00M	-1.85B	-1.27B	-1.33B	-2.89B	-1.61B
Financing Cash Flow	114.50M	907.60M	2.41B	2.04B	1.11B	935.70M

Lithia Motors Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 343.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LAD, the sentiment is Positive. The current price of 343.89 is above the 20-day moving average (MA) of 330.39, above the 50-day MA of 314.79, and above the 200-day MA of 313.46, indicating a bullish trend. The MACD of 9.97 indicates Negative momentum. The RSI at 61.81 is Neutral, neither overbought nor oversold. The STOCH value of 52.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LAD.

Lithia Motors Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LAD	76 Outperform	$8.34B	9.95	13.44%	0.63%	8.56%	17.84%
GPI	73 Outperform	$5.12B	14.26	12.27%	0.49%	19.45%	-24.27%
PAG	71 Outperform	$10.95B	11.71	17.30%	3.12%	2.25%	8.92%
AN	70 Neutral	$7.53B	12.30	27.16%	―	6.06%	-1.71%
ABG	67 Neutral	$4.61B	8.31	15.49%	―	8.07%	60.95%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
KMX	61 Neutral	$5.65B	12.72	7.46%	―	-1.49%	2.78%

Lithia Motors Corporate Events

Lithia Motors Announces Cash Dividend of $0.55

On October 22, 2025, Lithia Motors, Inc. announced a cash dividend of $0.55 per share, scheduled for payment on November 21, 2025, to shareholders recorded by November 7, 2025. This announcement signifies Lithia Motors’ ongoing commitment to providing value to its shareholders, potentially enhancing investor confidence and impacting its market position positively.

Lithia Motors Expands Board with Two New Directors

On October 1, 2025, Lithia Motors, Inc. expanded its Board of Directors from seven to nine members, appointing Heidi O’Neill and Richard Bailey as new directors. Both will receive compensation in line with the company’s non-employee director practices, including an annual retainer and restricted stock units. O’Neill brings extensive experience from her leadership roles at Nike, while Bailey has a background in academia and military service. The company has also demonstrated its commitment to Southern Oregon University through significant donations, reflecting a longstanding relationship.

Lithia Motors Completes $600M Senior Notes Offering

On September 10, 2025, Lithia Motors, Inc. completed a private offering of $600 million in 5.500% Senior Notes due 2030. The proceeds will be used to repay portions of its revolving credit lines and may be reborrowed for general corporate purposes, including acquisitions and working capital. The Senior Notes are unconditionally guaranteed by subsidiaries and rank equally with existing and future senior indebtedness. The issuance aims to strengthen Lithia Motors’ financial flexibility and support its strategic initiatives.