Lithia Motors, Inc. (NYSE:LAD) Just Released Its Second-Quarter Earnings: Here's What Analysts Think

Shareholders might have noticed that Lithia Motors, Inc. (NYSE:LAD) filed its quarterly result this time last week. The early response was not positive, with shares down 7.0% to US$288 in the past week. It was a credible result overall, with revenues of US$9.6b and statutory earnings per share of US$9.87 both in line with analyst estimates, showing that Lithia Motors is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, Lithia Motors' twelve analysts currently expect revenues in 2025 to be US$37.4b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be US$35.08, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$37.7b and earnings per share (EPS) of US$35.21 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Lithia Motors

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$390. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Lithia Motors at US$500 per share, while the most bearish prices it at US$310. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Lithia Motors shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Lithia Motors' revenue growth is expected to slow, with the forecast 1.2% annualised growth rate until the end of 2025 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Lithia Motors is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$390, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Lithia Motors analysts - going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Lithia Motors you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.