Lithia Motors, Inc.

Valuation Analysis

About the Company

Lithia Motors, Inc. operates as an automotive retailer in the United States, the United Kingdom, and Canada. The company operates in two segments, Vehicle Operations and Financing Operations. It offers a range of products and services fulfilling the entire vehicle ownership lifecycle, including new and used vehicles, financing and insurance products, and aftersales automotive repair and maintenance services. The company provides its products and services through a network of physical locations, e-commerce platforms, captive finance solutions, fleet management offerings, and other synergistic adjacencies. Lithia Motors, Inc. was founded in 1946 and is headquartered in Medford, Oregon.

Lithia Motors, Inc. Stock at a Glance

Lithia Motors, Inc. (LAD) is currently trading at $313.38 with a market capitalization of $7.1B. The trailing P/E ratio stands at 10.93x, with a forward P/E of 7.67x. The 52-week range spans from $239.78 to $360.56; the current price is 13.1% below the yearly high. Year-over-year revenue growth stands at +1.0%. The net profit margin stands at 1.88%.

💰 Dividend

Lithia Motors, Inc. pays an annual dividend of $2.28 per share, representing a yield of 0.73%. The payout ratio stands at 7.68%.

📊 Analyst Rating

16 analysts rate Lithia Motors, Inc. (LAD) on consensus: None. The average price target is $370.25, implying +18.15% from the current price. Analyst price targets range from $300.00 to $449.00.

Lithia Motors, Inc.: The Investment Case in Detail

Lithia Motors, Inc. (LAD) operates in the Consumer Cyclical — specifically Auto & Truck Dealerships — and is headquartered in United States. Below is a structured read of the investment case built directly from the latest fundamentals, valuation multiples, analyst positioning and smart-money flows. Each section translates raw numbers into the investment logic they imply, so you can decide whether the risk/reward fits your portfolio.

The Bull Case

Our valuation screen flags the stock as undervalued relative to its fundamentals — multiples are running below where the cash flow profile would normally justify.

The Bear Case

Revenue growth has slowed to just 1%, which is below nominal GDP — the business is no longer outgrowing the broader economy. With a net margin of just 1.88%, the business has little room to absorb cost shocks or pricing pressure — a single bad quarter can swing the company to a loss. The debt-to-equity ratio of 251.65% is elevated, meaning the company relies heavily on creditors — refinancing terms will become more important than operational performance in the next economic downturn.

Valuation in Context

With a PEG ratio of 0.7, the price-to-earnings multiple is actually below the company's growth rate — classic value-meets-growth territory that Peter Lynch would have called a 'GARP' opportunity.

What to Watch Next

• The forward P/E of 7.67x is meaningfully below the trailing 10.93x — analysts expect earnings to step up; the next earnings release is the test.

Investment Thesis: Strengths & Weaknesses

Technical Snapshot

The price is in a transition zone relative to the moving averages — no clear signal.

Risk Profile

The data points to market-like volatility, elevated short interest (18.13%), higher leverage relative to equity.

Trading Data

💵 Dividend Info

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