Lithia Motors (LAD)
NYSE:LAD
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Lithia Motors
(NYSE:LAD)
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Rating:61Neutral
Price Target:
$287.00
▲(1.85% Upside)
Action:ReiteratedDate:03/05/26
The score is driven primarily by solid but risk-balanced fundamentals: continued revenue growth is offset by notable margin compression, elevated leverage, and uneven cash-flow conversion. Technicals are the main drag given the strong downtrend and bearish momentum despite oversold readings. Valuation is a support (low P/E), while the earnings call and recent financing update are moderately positive but tempered by ongoing margin and cost headwinds.
Positive Factors
Scale & Revenue Growth
Lithia's scale — $37.6B revenue in 2025 — gives durable advantages: broader supplier leverage, fixed-cost absorption, and scope to fund technology, M&A and franchise expansion. Large scale supports resilience across cycles and enables continued investment in Driveway and aftersales growth initiatives.
Negative Factors
Elevated Leverage
Rapid debt growth to roughly $14.7B increases financial leverage in a cyclical dealership model. Elevated indebtedness amplifies earnings volatility during downturns, raises interest expense sensitivity, constrains flexibility for opportunistic M&A or buybacks, and heightens refinancing and covenant risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & Revenue Growth
Lithia's scale — $37.6B revenue in 2025 — gives durable advantages: broader supplier leverage, fixed-cost absorption, and scope to fund technology, M&A and franchise expansion. Large scale supports resilience across cycles and enables continued investment in Driveway and aftersales growth initiatives.
Read all positive factors
Lithia Motors (LAD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.50B
Dividend Yield0.64%
Average Volume (3M)335.88K
Price to Earnings (P/E)10.3
Beta (1Y)0.98
Revenue Growth8.56%
EPS Growth17.84%
CountryUS
Employees30,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Dealerships
Share Statistics
EPS (TTM)6.74
Shares Outstanding23,299,555
10 Day Avg. Volume295,563
30 Day Avg. Volume335,875
Financial Highlights & Ratios
PEG Ratio1.20
Price to Book (P/B)1.27
Price to Sales (P/S)0.22
P/FCF Ratio43.99
Enterprise Value/Market Cap3.22
Enterprise Value/Revenue0.56
Enterprise Value/Gross Profit3.74
Enterprise Value/Ebitda10.39
Forecast
1Y Price Target
$334.25Price Target Upside18.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)34.39
Revenue Forecast (FY)$38.72B
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, a...
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 sig...
Lithia Motors Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presents a predominantly positive operational and strategic picture: record revenue and significant EPS growth, strong scaling of Driveway Finance, robust aftersales and used volume gains, disciplined capital return via buybacks and sizable M&A activity. Key challenges include industry-wide GPU compression, SG&A deleverage, a YoY decline in adjusted EBITDA, and new-vehicle softness; management emphasized initiatives (pricing discipline, tech/AI investments, SG&A structural changes, and DFC growth) expected to address these headwinds. Overall, positives (record top-line, EPS growth, DFC momentum, aftersales strength, buybacks, and M&A) outweigh the near-term margin and cost challenges, with a clear plan to improve leverage and pricing execution into 2026.Positive Updates
Record Revenue and EPS Growth
Quarterly revenue of $9.2B and record full-year revenue of $37.6B, up 4% year-over-year; full-year adjusted diluted EPS of $33.46, up 16% from 2024; Q4 adjusted diluted EPS of $6.74.
Negative Updates
Gross Profit per Unit (GPU) Compression
Total vehicle GPU was $3,946, down $258 YoY; new vehicle GPU was $2,760, down $300 YoY; used GPU was $1,575, down $151 YoY — industry-wide margin compression pressured front-end profitability.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Revenue and EPS Growth
Quarterly revenue of $9.2B and record full-year revenue of $37.6B, up 4% year-over-year; full-year adjusted diluted EPS of $33.46, up 16% from 2024; Q4 adjusted diluted EPS of $6.74.
Read all positive updates
Company Guidance
Management’s guidance for 2026 emphasized growing market share, scaling Driveway Finance and disciplined capital allocation with several explicit targets and near-term metrics: long‑term goals include $2 of adjusted EPS per $1,000,000,000 of revenue, DFC 20% penetration and $500,000,000 pretax financing income, with a medium‑term 20%+ CAGR in financing income; recent performance cited Q4 revenue $9.2B and FY revenue $37.6B (+4% YoY), Q4 adjusted diluted EPS $6.74 and FY adjusted EPS $33.46 (+16% YoY), Q4 DFC income $23M and FY DFC income $75M (+$67M YoY), managed receivables $4.8B (+23%), NIM 4.8% (+55 bps), NA penetration 15% (Dec 16.7%, Jan record 17.5%), avg origination FICO 751, 95% LTV and annualized provision 3%; operational metrics to improve include total vehicle GPU $3,946 (‑$258 YoY), new GPU $2,760 (‑$300), used GPU $1,575 (‑$151) with used revenue +6.1% on +4.7% units and value‑auto unit growth +10.9%, new revenue ‑6.6% on ‑8.3% units, aftersales revenue +10.9% and gross profit +9.8% (57.3% margin), inventory days new 54 (vs 52) and used 40 (vs 46), floor‑plan interest savings $6.5M YoY, adjusted EBITDA Q4 $364.1M (‑8.9% YoY) and Q4 free cash flow $97M; capital allocation priorities remain buybacks (3.8% of shares repurchased in Q4, 11.4% in 2025 at avg $314), ~40% of deployed capital to buybacks, ~40% to acquisitions (FY2025 acquired revenue $2.4B) with a target $2–4B acquired revenue per year, maintain leverage <3x and drive SG&A from ~71% of gross profit toward a longer‑term 60–65% range (medium term ~3–4 years).Lithia Motors Financial Statement Overview
Summary
Income Statement
70
Positive
Balance Sheet
56
Neutral
Cash Flow
62
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 37.63B | 36.19B | 31.04B | 28.19B | 22.83B |
| Gross Profit | 5.47B | 5.56B | 5.23B | 5.15B | 4.26B |
| EBITDA | 1.87B | 2.26B | 2.16B | 2.19B | 1.78B |
| Net Income | 819.60M | 802.00M | 1.00B | 1.25B | 1.06B |
Balance Sheet | |||||
| Total Assets | 25.11B | 23.13B | 19.63B | 15.01B | 11.15B |
| Cash, Cash Equivalents and Short-Term Investments | 341.80M | 402.20M | 941.40M | 246.70M | 174.80M |
| Total Debt | 14.69B | 13.86B | 11.33B | 7.99B | 4.96B |
| Total Liabilities | 18.48B | 16.45B | 13.35B | 9.76B | 6.48B |
| Stockholders Equity | 6.63B | 6.66B | 6.21B | 5.21B | 4.63B |
Cash Flow | |||||
| Free Cash Flow | 191.90M | 73.70M | -702.60M | -913.20M | 1.54B |
| Operating Cash Flow | 542.80M | 425.10M | -472.40M | -610.10M | 1.80B |
| Investing Cash Flow | -1.03B | -1.85B | -1.27B | -1.33B | -2.89B |
| Financing Cash Flow | 426.00M | 907.60M | 2.41B | 2.04B | 1.11B |
Lithia Motors Technical Analysis
Neutral
281.78
Price Trends
277.76
Positive
303.22
Negative
309.79
Negative
Market Momentum
0.41
Negative
65.93
Neutral
95.18
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LAD, the sentiment is Neutral. The current price of 281.78 is above the 20-day moving average (MA) of 256.97, above the 50-day MA of 277.76, and below the 200-day MA of 309.79, indicating a neutral trend. The MACD of 0.41 indicates Negative momentum. The RSI at 65.93 is Neutral, neither overbought nor oversold. The STOCH value of 95.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LAD.
Lithia Motors Risk Analysis
Lithia Motors disclosed 30 risk factors in its most recent earnings report. Lithia Motors reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lithia Motors Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.31B | 11.20 | 16.04% | 3.14% | 2.25% | 8.92% | |
62 Neutral | $3.94B | 9.17 | 9.29% | ― | 8.07% | 60.95% | |
62 Neutral | $4.01B | 15.78 | 10.85% | 0.49% | 19.45% | -24.27% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $6.50B | 10.30 | 12.08% | 0.64% | 8.56% | 17.84% | |
61 Neutral | $6.96B | 25.71 | 7.39% | ― | 0.12% | 2.78% | |
58 Neutral | $6.94B | 12.12 | 26.70% | ― | 6.06% | -1.71% |
* Consumer Cyclical Sector Average
LAD
Lithia Motors
281.78
-6.88
-2.38%
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206.57
-15.59
-7.02%
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22.03%
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41.66
-26.07
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GPI
Group 1 Automotive
337.98
-55.22
-14.04%
PAG
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157.27
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7.80%
Lithia Motors Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Lithia Motors Extends and Amends Core Credit Facility
Positive
Mar 4, 2026
On February 27, 2026, Lithia Motors, Inc. amended its primary loan agreement, entering into a seventh amendment that extends the expiration of its sizable credit facility to February 27, 2031, with additional one-year extension options subject to ...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Lithia Motors Updates Bylaws to Adjust Board Size
Neutral
Feb 20, 2026
On February 19, 2026, Lithia Motors’ Board of Directors approved an amendment to the company’s Amended and Restated Bylaws, effective that same day, eliminating the upper limit on the number of directors and allowing the Board to set i...
Business Operations and StrategyExecutive/Board Changes
Lithia Motors Realigns Technology Leadership Under Finance, Customer Units
Neutral
Feb 13, 2026
Lithia Motors announced a reorganization of its technology leadership, shifting core IT and technology functions to report under Chief Financial Officer Tina Miller and Chief Customer Officer Dianna du Preez. This move is intended to align technol...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
Lithia Motors Posts Record 2025 Revenue Amid Margin Pressures
Positive
Feb 11, 2026
Lithia Motors operates in automotive retail, selling new and used vehicles and providing aftersales, financing and fleet services through both brick-and-mortar locations and digital platforms, including Driveway and Driveway Finance Corporation. I...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.