NYSE:LAD

Stock Analysis Report

Executive Summary

Lithia Motors, Inc. operates as an automotive retailer in the United States.

Rewards

Trading at 34.4% below its fair value

Earnings are forecast to grow 8.23% per year

Earnings have grown 13% per year over the past 5 years

Pays a reliable dividend of 0.92%

Risk Analysis

Debt is not well covered by operating cash flow



Snowflake Analysis

Good value with adequate balance sheet and pays a dividend.


Similar Companies

Carvana

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Share Price & News

How has Lithia Motors's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LAD has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.8%

LAD

2.6%

US Specialty Retail

1.5%

US Market


1 Year Return

48.9%

LAD

17.3%

US Specialty Retail

20.1%

US Market

Return vs Industry: LAD exceeded the US Specialty Retail industry which returned 17.3% over the past year.

Return vs Market: LAD exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

LADIndustryMarket
7 Day-1.8%2.6%1.5%
30 Day-8.6%0.2%1.4%
90 Day-19.4%4.1%8.7%
1 Year50.4%48.9%19.1%17.3%22.7%20.1%
3 Year35.1%30.7%45.0%38.1%50.1%40.5%
5 Year55.0%47.2%50.0%37.8%73.1%54.1%

Price Volatility Vs. Market

How volatile is Lithia Motors's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Lithia Motors undervalued compared to its fair value and its price relative to the market?

34.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LAD ($131) is trading below our estimate of fair value ($199.58)

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


Price To Earnings Ratio

PE vs Industry: LAD is good value based on its PE Ratio (11.3x) compared to the Specialty Retail industry average (16.7x).

PE vs Market: LAD is good value based on its PE Ratio (11.3x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: LAD is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: LAD is overvalued based on its PB Ratio (2.1x) compared to the US Specialty Retail industry average (1.5x).


Next Steps

Future Growth

How is Lithia Motors forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

8.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LAD's forecast earnings growth (8.2% per year) is above the savings rate (1.7%).

Earnings vs Market: LAD's earnings (8.2% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: LAD's earnings are forecast to grow, but not significantly.

Revenue vs Market: LAD's revenue (5.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: LAD's revenue (5.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LAD's Return on Equity is forecast to be high in 3 years time (20.5%)


Next Steps

Past Performance

How has Lithia Motors performed over the past 5 years?

13.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LAD has high quality earnings.

Growing Profit Margin: LAD's current net profit margins (2.1%) are lower than last year (2.2%).


Past Earnings Growth Analysis

Earnings Trend: LAD's earnings have grown by 13% per year over the past 5 years.

Accelerating Growth: LAD's earnings growth over the past year (2.2%) is below its 5-year average (13% per year).

Earnings vs Industry: LAD earnings growth over the past year (2.2%) underperformed the Specialty Retail industry 5.8%.


Return on Equity

High ROE: LAD's Return on Equity (18.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Lithia Motors's financial position?


Financial Position Analysis

Short Term Liabilities: LAD's short term assets ($3.1B) exceed its short term liabilities ($2.6B).

Long Term Liabilities: LAD's short term assets ($3.1B) exceed its long term liabilities ($2.0B).


Debt to Equity History and Analysis

Debt Level: LAD's debt to equity ratio (218.5%) is considered high.

Reducing Debt: LAD's debt to equity ratio has reduced from 270.4% to 218.5% over the past 5 years.

Debt Coverage: LAD's debt is not well covered by operating cash flow (18.5%).

Interest Coverage: LAD's interest payments on its debt are well covered by EBIT (3.7x coverage).


Balance Sheet

Inventory Level: LAD has a high level of physical assets or inventory.

Debt Coverage by Assets: LAD's debt is not covered by short term assets (assets are 1x debt).


Next Steps

Dividend

What is Lithia Motors's current dividend yield, its reliability and sustainability?

0.92%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Lithia Motors before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: LAD's dividend (0.92%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: LAD's dividend (0.92%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: LAD's dividends per share have been stable in the past 10 years.

Growing Dividend: LAD's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (10.3%), LAD's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LAD's dividends in 3 years are forecast to be thoroughly covered by earnings (7.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Bryan DeBoer (53yo)

7.8yrs

Tenure

US$5,464,394

Compensation

Mr. Bryan B. DeBoer has been the Chief Executive Officer and President of Lithia Motors Inc, since May 1, 2012 and January 9, 2006 respectively. Mr. DeBoer served as the Chief Operating Officer of Lithia M ...


CEO Compensation Analysis

Compensation vs Market: Bryan's total compensation ($USD5.46M) is about average for companies of similar size in the US market ($USD4.88M).

Compensation vs Earnings: Bryan's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Sidney DeBoer
Founder & Chairman4.2yrsUS$247.88k0.0016% $49.9k
Bryan DeBoer
CEO, President & Director7.8yrsUS$5.46m0.59% $18.0m
Christopher Holzshu
COO & Secretary0.3yrsUS$2.21m0.20% $6.0m
Scott Hillier
Senior Vice President of Operations2.8yrsUS$1.44m0.24% $7.2m
Chun-Wai Liang
Senior Vice President of DCH Operations4.5yrsUS$955.74k0.023% $694.6k
Tina Miller
Senior VP & CFO0.9yrsno data0.015% $456.8k
George Hines
Senior VP & Chief Technology and Innovation Officer1.6yrsno data0.022% $670.2k
Eric Pitt
VP of Investor Relations & Treasurer0yrsno datano data
David Stork
Chief Legal Officer1.1yrsno datano data
Thomas Dobry
Senior VP & Chief Marketing Officer2.8yrsno data0.046% $1.4m

2.2yrs

Average Tenure

56yo

Average Age

Experienced Management: LAD's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Sidney DeBoer
Founder & Chairman4.2yrsUS$247.88k0.0016% $49.9k
Bryan DeBoer
CEO, President & Director7.8yrsUS$5.46m0.59% $18.0m
David Robino
Independent Director3.9yrsUS$240.10k0.020% $612.1k
Kenneth Roberts
Independent Director7.8yrsUS$248.29k0.42% $12.8m
Susan Cain
Independent Director10.7yrsUS$244.16k0.044% $1.3m
Louis Miramontes
Lead Independent Director0yrsUS$196.76k0.0053% $159.9k
Shauna Mcintyre
Independent Director0.8yrsno datano data

6.0yrs

Average Tenure

65yo

Average Age

Experienced Board: LAD's board of directors are considered experienced (6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Lithia Motors, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Lithia Motors, Inc.
  • Ticker: LAD
  • Exchange: NYSE
  • Founded: 1946
  • Industry: Automotive Retail
  • Sector: Retail
  • Market Cap: US$3.045b
  • Shares outstanding: 23.24m
  • Website: https://www.lithiainvestorrelations.com

Number of Employees


Location

  • Lithia Motors, Inc.
  • 150 North Bartlett Street
  • Medford
  • Oregon
  • 97501
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LADNYSE (New York Stock Exchange)YesClass A Common StockUSUSDDec 1996
LMODB (Deutsche Boerse AG)YesClass A Common StockDEEURDec 1996

Biography

Lithia Motors, Inc. operates as an automotive retailer in the United States. It offers new and used vehicles; vehicle financing services; warranties, insurance contracts, and vehicle and theft protection services; and automotive repair and maintenance services, as well as sells vehicle body and parts. The company offers new vehicles and used vehicles in the United States. Lithia Motors, Inc. was founded in 1946 and is headquartered in Medford, Oregon. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 23:38
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.