Lithia Motors (NYSE:LAD) Issues Quarterly Earnings Results

Lithia Motors (NYSE:LAD) issued its quarterly earnings data on Wednesday. The company reported $10.34 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $9.70 by $0.64, Zacks reports. The business had revenue of $9.95 billion for the quarter, compared to the consensus estimate of $9.75 billion. Lithia Motors had a return on equity of 12.05% and a net margin of 2.06%. The company’s quarterly revenue was up 2.8% compared to the same quarter last year. During the same period in the prior year, the business posted $9.50 earnings per share.

Here are the key takeaways from Lithia Motors’ conference call:

• Adjusted EPS rose 9% to $10.34 on revenue just under $10 billion, despite a mixed retail environment and a 1.4% same-store revenue decline.
• Used-vehicle gross profit increased 9.3% year over year, with used GPU up 13% to $1,993, while after-sales gross profit grew 2.4% and margins expanded to 59.5%.
• Driveway Finance delivered record finance-operations income of $32 million, up nearly 70%, supported by 22% growth in managed receivables, improving credit metrics, and North American penetration of 18.3%.
• Strong cash generation supported $85 million of share repurchases, more than $627 million returned to shareholders year to date, and the acquisition of four Memphis Hyundai and Kia stores expected to add $250 million in annualized revenue.
• New-vehicle revenue declined 2.6% and F&I per unit fell 4.7% amid affordability pressure; management also cautioned that the fourth quarter remains seasonally challenging, although it expects easier comparisons and continued used-GPU momentum.

Lithia Motors Trading Down 1.8%

Shares of NYSE:LAD opened at $285.86 on Friday. The business’s 50-day moving average is $331.86 and its 200 day moving average is $315.40. Lithia Motors has a 1 year low of $239.78 and a 1 year high of $439.49. The firm has a market capitalization of $6.28 billion, a P/E ratio of 9.39, a P/E/G ratio of 0.62 and a beta of 1.27. The company has a debt-to-equity ratio of 1.44, a current ratio of 1.00 and a quick ratio of 0.21.

Lithia Motors Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, November 20th. Investors of record on Friday, November 6th will be paid a dividend of $0.75 per share. This is a positive change from Lithia Motors’s previous quarterly dividend of $0.70. The ex-dividend date is Friday, November 6th. This represents a $3.00 annualized dividend and a yield of 1.0%. Lithia Motors’s dividend payout ratio (DPR) is presently 9.29%.

Analyst Ratings Changes

A number of brokerages have recently commented on LAD. Jefferies Financial Group reiterated a “buy” rating and issued a $490.00 target price on shares of Lithia Motors in a report on Thursday, July 30th. Weiss Ratings lowered Lithia Motors from a “buy (b-)” rating to a “hold (c+)” rating in a report on Wednesday, October 14th. Benchmark raised their price target on Lithia Motors from $400.00 to $475.00 and gave the stock a “buy” rating in a research report on Thursday, July 30th. JPMorgan Chase & Co. dropped their price objective on shares of Lithia Motors from $320.00 to $315.00 and set a “neutral” rating for the company in a research note on Thursday. Finally, UBS Group cut their price objective on shares of Lithia Motors from $335.00 to $305.00 and set a “neutral” rating on the stock in a research report on Thursday. Six investment analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $396.10.

Insider Buying and Selling

In other Lithia Motors news, Director Stacy Congdon sold 75 shares of the firm’s stock in a transaction dated Friday, September 11th. The stock was sold at an average price of $370.73, for a total value of $27,804.75. Following the completion of the sale, the director owned 2,300 shares of the company’s stock, valued at approximately $852,679. This trade represents a 3.16% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 1.08% of the company’s stock.

Key Stories Impacting Lithia Motors

Here are the key news stories impacting Lithia Motors this week:

• Positive Sentiment: Third-quarter results exceeded expectations: Lithia reported $10.34 in earnings per share versus a $9.70 consensus estimate, while revenue reached $9.95 billion, above the $9.75 billion forecast. Revenue increased 2.8% year over year.
• Positive Sentiment: Used-vehicle gross profit per unit rose 13% year over year, and Driveway Finance Corporation’s income climbed nearly 70% to $32 million, supporting the company’s finance and used-vehicle operations. Lithia: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: Lithia raised its quarterly dividend 7.1% to $0.75 per share, signaling continued shareholder-return support. The annualized dividend is $3.00 per share, with a yield of approximately 1.1%.
• Neutral Sentiment: Barclays maintained an “overweight” rating but reduced its price target from $375 to $345. The target still implies substantial upside from the recent share price, although the reduction reflects more cautious expectations.
• Negative Sentiment: Analysts are cutting expectations: UBS lowered its target from $335 to $305 and kept a “neutral” rating, while JPMorgan reduced its target from $320 to $315 and also remained “neutral.” The broader consensus target was cut 11% to $413.53.
• Negative Sentiment: Rising interest costs weighed on the quarter, increasing concern about Lithia’s leverage. Net debt was reported at approximately $15.77 billion, making the valuation less attractive despite relatively low cash-flow multiples. Lithia Motors Stock Sinks as Q3 Results Expose Rising Interest Costs
• Negative Sentiment: A separate analysis downgraded Lithia from “buy” to “hold,” citing economic risks, elevated auto-loan delinquencies, acquisition-dependent growth and pressure on new-vehicle profitability. These concerns may outweigh the earnings beat in the near term. Despite a Strong Showing, a Downgrade Is in Store for Lithia Motors

About Lithia Motors

Lithia Motors, Inc is an automotive retailer headquartered in Medford, Oregon. Operating under the Lithia & Driveway name, the company sells new and used vehicles through a network of franchised dealerships and digital retail channels. Its dealerships represent a broad range of domestic, Asian and European automotive brands.

In addition to vehicle sales, Lithia provides related services including vehicle financing and insurance products, parts and maintenance, collision repair, and other after-sales support.