Morningstar Rating
Stock XNYS Rating as of
$280.58 −3.91(1.37%)
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Company Report
Company Report
Lithia Earnings: Record Revenue Offset by Profit Declines, but Growth Story Remains Excellent
David Whiston
Lithia Motors' second-quarter adjusted diluted earnings per share of $7.87 fell 28.2% year over year but beat the $7.03 LSEG consensus despite a $1.10 hit from the cyberattack on dealer management system vendor CDK that started June 19 and lasted into early July. CEO Bryan DeBoer said most of the $1.10 impact is from lost service business, and probably only $0.10-$0.20 of lost business will be made up this year as it’s mostly lost service work, which customers probably didn’t delay. There is also the chance of future business interruption insurance proceeds, but the timing and amount of those payouts are uncertain.
LAD is trading at a 274% premium.
Price
$284.49
Fair Value
$879.00
Uncertainty
High
- 1-Star Price
- $189.40
- 5-Star Price
- $553.70
- Economic Moat
- Hslzvg
- Capital Allocation
- Mmhwqdwxq
Bulls Say, Bears Say
Bulls Say, Bears Say
Bulls
Lithia’s growth runway looks very long to us; acquisitions are opening up new areas of the US, and international expansion just started in 2021 by entering Canada and the UK in 2023.
Bears
Lithia could need additional capital to fund expansion. In addition, it will face increased competition for acquisitions now that it will operate in large cities and with Berkshire Hathaway seeking auto dealer acquisitions.
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News
News
- More car dealerships say CDK cyberattack has hurt their operations
Trading Information
Trading Information
- Previous Close Price
- $284.49
- Day Range
$280.52–285.05
- 52-Week Range
$231.36–331.96
- Bid/Ask
- $65.06/$350.00
- Market Cap
- $7.50 Bil
- Volume/Avg
- 165,409/284,802
Key Statistics
Key Statistics
- Price/Earnings (Normalized)
- 8.92
- Price/Sales
- 0.23
- Dividend Yield (Trailing)
- 0.73%
- Dividend Yield (Forward)
- 0.76%
- Total Yield
- 3.71%
Company Profile
Company Profile
Lithia Motors is a retailer of new and used vehicles and related services. The company offers over 50 brands of vehicles at nearly 500 stores globally across the US, Canada, and UK. The company has expanded largely through the acquisition of dealerships in smaller regional markets but now seeks to grow in any part of the US and we expect more deals over time in the US and, at times, abroad. Annual revenue in 2023 was $31 billion and we see over $50 billion possible in a few years. The US was 90% of 2023 revenue and the UK second at 6%, the latter should rise to around 20% with the 2024 Pendragon acquisition. In 2023, new-car sales were about 49% of total revenue. Lithia was founded in 1946, went public in 1996, and is the largest US auto dealer. It is based in Medford, Oregon.
- Sector
- Consumer Cyclical
- Industry
- Auto & Truck Dealerships
- Stock Style Box
- Small Value
- Total Number of Employees
- 27,446
- Website
- https://www.lithia.com
Competitors
Competitors
- Asbury Automotive Group Inc ABG
- Penske Automotive Group Inc PAG
- AutoNation Inc AN
- Group 1 Automotive Inc GPI
- CarMax Inc KMX
- Berkshire Hathaway Inc Class B BRK.B
- Sonic Automotive Inc Class A SAH
Valuation
Valuation
| Metric | LAD | ABG | PAG |
|---|---|---|---|
Price/Earnings (Normalized) | 8.92 | 7.74 | 11.43 |
Price/Book Value | 1.18 | 1.34 | 2.19 |
Price/Sales | 0.23 | 0.29 | 0.36 |
Price/Cash Flow | 6.07 | 5.32 | 10.37 |
Price/Earnings
LAD
ABG
PAG
Financial Strength
Financial Strength
| Metric | LAD | ABG | PAG |
|---|---|---|---|
Quick Ratio | 0.27 | 0.20 | 0.19 |
Current Ratio | 1.19 | 1.25 | 0.98 |
Interest Coverage | 4.26 | 3.43 | 5.84 |
Quick Ratio
LAD
ABG
PAG
Profitability
Profitability
| Metric | LAD | ABG | PAG |
|---|---|---|---|
Return on Assets (Normalized) | 4.29% | 6.28% | 6.12% |
Return on Equity (Normalized) | 14.11% | 18.18% | 20.43% |
Return on Invested Capital (Normalized) | 6.91% | 9.65% | 9.27% |
Return on Assets
LAD
ABG
PAG
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Auto & Truck Dealerships Industry Comparables
Auto & Truck Dealerships Industry Comparables
| 1-Day Chart | Name | Price | Morningstar Rating for Stocks | Capital Allocation | Economic Moat | Market Cap |
|---|---|---|---|---|---|---|
| Carvana Co Class A CVNA | — | Pqhjfs | $17.6 Bil | |||
| CarMax Inc KMX | Fvpzhkdvk | Qkjngj | $12.1 Bil | |||
| D'Ieteren Group ADR SIETY | — | Cddkh | $12.1 Bil | |||
| D'Ieteren Group SIEVF | — | Nsnyvm | $12.1 Bil | |||
| Penske Automotive Group Inc PAG | Cndswbwf | Znmbxv | $10.9 Bil | |||
| AutoNation Inc AN | Sjlbzgjhm | Yrcfk | $6.7 Bil | |||
| Group 1 Automotive Inc GPI | Nfhtpbsyb | Ghcqr | $4.6 Bil | |||
| Asbury Automotive Group Inc ABG | Tpjxlftg | Sxmzky | $4.6 Bil | |||
| Sonic Automotive Inc Class A SAH | Vxgghfns | Zzkzpx | $1.9 Bil |
