Lithia Motors (LAD) AI Stock Analysis

• Market Cap: $7.11B
• Dividend Yield: 0.74%
• Average Volume (3M): 323.01K
• Price to Earnings (P/E): 8.5
• Beta (1Y): 1.06
• 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: 346,891
• 30 Day Avg. Volume: 323,015
• 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: 3.13
• Enterprise Value/Revenue: 0.59
• Enterprise Value/Gross Profit: 3.93
• Enterprise Value/Ebitda: 9.89
• 1Y Price Target: $376.38
• Price Target Upside: 27.90% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $344.00 ▲(16.90% Upside)

Lithia Motors' overall stock score is driven by strong earnings growth and a favorable valuation, despite challenges in profitability margins and cash flow. The earnings call provided positive sentiment, but technical indicators suggest a lack of strong momentum.

Positive Factors

Revenue Growth

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

Used Vehicle and Aftersales Segments

Growth in used vehicle and aftersales segments enhances revenue diversity and profitability, leveraging strong consumer demand and service capabilities.

Improved Inventory Management

Efficient inventory management reduces costs and improves cash flow, enhancing operational efficiency and financial stability over the long term.

Negative Factors

Decreased Vehicle Gross Profit per Unit

Declining gross profit per unit pressures overall profitability, potentially affecting margins and financial performance if trends persist.

SG&A Efficiency Challenges

Rising SG&A expenses relative to gross profit indicate inefficiencies that could erode margins and require operational adjustments for sustainability.

Cash Flow Challenges

Significant decline in free cash flow raises concerns about liquidity and the ability to fund operations and growth initiatives without external financing.

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 primarily through the sale of new and used vehicles. The company earns income from the profit margin on these vehicle sales, which includes both the markup on the vehicles themselves and any additional services offered, such as vehicle financing and warranties. In addition, Lithia Motors has significant revenue streams from after-sales services, including vehicle maintenance, repairs, and parts sales. The company also benefits from finance and insurance (F&I) products, where it receives commissions for arranging financing and selling insurance products to customers. Partnerships with various automotive manufacturers and financial institutions also enhance Lithia's revenue, as they allow the company to offer competitive financing options and exclusive vehicle inventory, boosting sales and profitability.

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: Negative
• Last Price: 294.27
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LAD, the sentiment is Negative. The current price of 294.27 is below the 20-day moving average (MA) of 309.22, below the 50-day MA of 318.83, and below the 200-day MA of 318.66, indicating a bearish trend. The MACD of -5.73 indicates Positive momentum. The RSI at 38.55 is Neutral, neither overbought nor oversold. The STOCH value of 8.99 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LAD.

Lithia Motors Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABG	71 Outperform	$4.41B	7.95	15.49%	―	8.07%	60.95%
LAD	69 Neutral	$7.11B	8.48	13.44%	0.74%	8.56%	17.84%
PAG	68 Neutral	$10.45B	11.17	17.30%	3.14%	2.25%	8.92%
GPI	66 Neutral	$4.94B	13.75	12.27%	0.50%	19.45%	-24.27%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
KMX	58 Neutral	$4.75B	9.50	8.42%	―	2.17%	28.59%
AN	55 Neutral	$7.07B	11.41	27.16%	―	6.06%	-1.71%

Lithia Motors Corporate Events

Lithia Motors’ 2024 Annual Report Highlights Key Business Risks for Stakeholders

Lithia Motors faces potential business risks as outlined in their 2024 Annual Report on Form 10-K, which was submitted to the SEC on February 24, 2025. The report, particularly under Item 1A, details the primary risks associated with their operations and securities. It is crucial for stakeholders to review these risk factors in conjunction with the information provided in the latest Form 10-Q. This comprehensive understanding is essential for assessing the potential impact on Lithia Motors’ business performance and investment value.

Lithia & Driveway Reports Record Revenue and Growth

Lithia & Driveway (LAD), the largest global automotive retailer, offers a comprehensive range of products and services throughout the vehicle ownership lifecycle, leveraging its extensive network of physical locations and e-commerce platforms to modernize personal transportation solutions.

Lithia Motors’ Earnings Call Highlights Robust Growth Amid Challenges

Lithia Motors’ recent earnings call conveyed a generally positive sentiment, highlighting strong growth in revenue and earnings per share (EPS), primarily driven by robust performance in used vehicle sales and aftersales. The company also made significant strides in finance and insurance (F&I) revenue and inventory management. However, challenges were acknowledged, including decreased vehicle gross profit per unit, efficiency issues in selling, general, and administrative (SG&A) expenses, and underperformance in the UK market.

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.

The most recent analyst rating on (LAD) stock is a Hold with a $327.00 price target. To see the full list of analyst forecasts on Lithia Motors stock, see the LAD Stock Forecast page.

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.

The most recent analyst rating on (LAD) stock is a Buy with a $350.00 price target. To see the full list of analyst forecasts on Lithia Motors stock, see the LAD Stock Forecast page.

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.

The most recent analyst rating on (LAD) stock is a Buy with a $385.00 price target. To see the full list of analyst forecasts on Lithia Motors stock, see the LAD Stock Forecast page.

Lithia Motors Announces $600M Senior Notes Offering

On September 3, 2025, Lithia Motors announced the pricing of its $600 million private offering of 5.500% senior notes due 2030, an increase of $100 million from the initial offering size. The proceeds will be used to repay part of its revolving credit borrowings, potentially impacting its financial flexibility and acquisition strategy.

The most recent analyst rating on (LAD) stock is a Buy with a $343.00 price target. To see the full list of analyst forecasts on Lithia Motors stock, see the LAD Stock Forecast page.

Lithia Motors Announces $500 Million Senior Notes Offering

On September 3, 2025, Lithia Motors announced a private offering of $500 million in senior notes due 2030. The proceeds will be used to repay part of its revolving credit borrowings, which may be reborrowed for corporate purposes, including acquisitions and working capital. This strategic financial move is expected to impact the company’s operational flexibility and market positioning.

The most recent analyst rating on (LAD) stock is a Buy with a $343.00 price target. To see the full list of analyst forecasts on Lithia Motors stock, see the LAD Stock Forecast page.

Lithia Motors Expands Loan Agreement by $500 Million

On August 6, 2025, Lithia Motors, Inc. announced a Sixth Amendment to its Fourth Amended and Restated Loan Agreement, increasing its total financing commitment from $6.0 billion to $6.5 billion, with potential expansion to $7.0 billion. This amendment includes changes such as reallocating commitments under the Credit Facility and removing Financing Operations interest expense from the fixed charge coverage ratio, which could enhance the company’s operational flexibility and financial strategy.

The most recent analyst rating on (LAD) stock is a Buy with a $410.00 price target. To see the full list of analyst forecasts on Lithia Motors stock, see the LAD Stock Forecast page.