Lithia Motors, Inc.

NYSE:LAD Stock Report

Market Cap: US$9.9b

Lithia Motors Valuation

Is LAD undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of LAD when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LAD ($371.06) is trading below our estimate of fair value ($676.38)

Significantly Below Fair Value: LAD is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LAD?

Key metric: As LAD is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for LAD. This is calculated by dividing LAD's market cap by their current earnings.
What is LAD's PE Ratio?
PE Ratio12.4x
EarningsUS$799.30m
Market CapUS$9.93b

Price to Earnings Ratio vs Peers

How does LAD's PE Ratio compare to its peers?

The above table shows the PE ratio for LAD vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average19.1x
MUSA Murphy USA
21x7.2%US$10.7b
PAG Penske Automotive Group
12.3x2.6%US$10.8b
KMX CarMax
29x19.4%US$12.1b
ABG Asbury Automotive Group
14.2x19.6%US$5.1b
LAD Lithia Motors
12.4x13.3%US$9.9b

Price-To-Earnings vs Peers: LAD is good value based on its Price-To-Earnings Ratio (12.4x) compared to the peer average (19.1x).

Price to Earnings Ratio vs Industry

How does LAD's PE Ratio compare vs other companies in the US Specialty Retail Industry?

4 CompaniesPrice / EarningsEstimated GrowthMarket Cap
SSOK Sunstock
1.8xn/aUS$771.79k
MASN Maison Luxe
0.08xn/aUS$168.03k
FTCH.Q Farfetch
n/an/aUS$395.00
EXPR.Q Express
0.00006xn/aUS$374.00
No more companies available in this PE range
LAD 12.4xIndustry Avg. 16.4xNo. of Companies11PE01224364860+
4 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: LAD is good value based on its Price-To-Earnings Ratio (12.4x) compared to the US Specialty Retail industry average (16.4x).

Price to Earnings Ratio vs Fair Ratio

What is LAD's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LAD PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio12.4x
Fair PE Ratio18x

Price-To-Earnings vs Fair Ratio: LAD is good value based on its Price-To-Earnings Ratio (12.4x) compared to the estimated Fair Price-To-Earnings Ratio (18x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst LAD forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$371.06
US$384.20
+3.5%
7.6%US$424.00US$330.00n/a15
Nov ’25US$337.81
US$380.87
+12.7%
8.3%US$424.00US$310.00n/a15
Oct ’25US$317.27
US$352.20
+11.0%
8.6%US$424.00US$302.00n/a15
Sep ’25US$301.08
US$338.43
+12.4%
13.8%US$424.00US$225.00n/a14
Aug ’25US$295.44
US$330.57
+11.9%
15.8%US$445.00US$225.00n/a14
Jul ’25US$252.18
US$318.50
+26.3%
17.0%US$445.00US$225.00n/a14
Jun ’25US$253.14
US$320.64
+26.7%
18.0%US$445.00US$225.00n/a14
May ’25US$254.16
US$323.70
+27.4%
16.9%US$445.00US$230.00n/a15
Apr ’25US$295.77
US$349.10
+18.0%
16.4%US$500.00US$230.00n/a15
Mar ’25US$299.70
US$349.29
+16.5%
17.0%US$500.00US$230.00n/a14
Feb ’25US$304.46
US$353.20
+16.0%
18.3%US$500.00US$220.00n/a15
Jan ’25US$329.28
US$341.08
+3.6%
21.0%US$500.00US$220.00n/a13
Dec ’24US$277.59
US$343.92
+23.9%
20.8%US$500.00US$220.00n/a13
Nov ’24US$246.35
US$345.46
+40.2%
21.1%US$500.00US$220.00US$337.8113
Oct ’24US$295.33
US$366.85
+24.2%
17.2%US$500.00US$220.00US$317.2713
Sep ’24US$316.14
US$366.71
+16.0%
16.7%US$500.00US$220.00US$301.0814
Aug ’24US$306.15
US$365.14
+19.3%
17.9%US$500.00US$198.00US$295.4414
Jul ’24US$304.11
US$307.64
+1.2%
22.9%US$507.00US$198.00US$252.1814
Jun ’24US$235.17
US$307.64
+30.8%
22.9%US$507.00US$198.00US$253.1414
May ’24US$227.16
US$307.64
+35.4%
22.9%US$507.00US$198.00US$254.1614
Apr ’24US$228.93
US$314.36
+37.3%
21.8%US$507.00US$198.00US$295.7714
Mar ’24US$256.94
US$311.50
+21.2%
19.5%US$467.00US$198.00US$299.7014
Feb ’24US$278.10
US$304.54
+9.5%
21.3%US$467.00US$198.00US$304.4613
Jan ’24US$204.74
US$328.57
+60.5%
28.7%US$540.00US$200.00US$329.2814
Dec ’23US$235.34
US$335.00
+42.3%
28.3%US$540.00US$200.00US$277.5913
Nov ’23US$210.94
US$338.08
+60.3%
29.1%US$540.00US$200.00US$246.3513

Analyst Forecast: Target price is less than 20% higher than the current share price.

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