Group 1 - Lithia & Driveway (NYSE: LAD) will release its fourth quarter 2025 earnings and full year results on February 11, 2026, before the market opens [1] - A conference call to discuss the earnings results is scheduled for the same day at 10:00 a.m. Eastern Time [1] - The conference call can be accessed by telephone or via the company's website for live listening and replay [2] Group 2 - Lithia & Driveway is the largest global automotive retailer, offering a wide range of products and services throughout the vehicle ownership lifecycle [3] - The company emphasizes simple, convenient, and transparent experiences through its extensive network of physical locations and e-commerce platforms [3] - Lithia & Driveway aims for consistent, profitable growth in a large and unconsolidated industry, leveraging its diversified and competitively differentiated design [3]

Core Viewpoint - Lithia Motors, Inc. (NYSE:LAD) is identified as an undervalued cyclical stock with positive ratings from Benchmark and Evercore ISI, indicating potential investment opportunities [1][2]. Group 1: Analyst Ratings and Price Targets - Benchmark has reiterated a Buy rating on Lithia Motors with a price target of $400 [1]. - Evercore ISI has also maintained a Buy rating, setting a higher price target of $500 [1]. Group 2: Performance Forecasts - Benchmark's updated forecasts indicate a reduction in production volumes and gross profit per unit, expecting a deleveraging to 67% of sales for Lithia Motors [2]. - The firm anticipates Lithia Motors to generate $409 million in EBITDA for the fourth quarter, with an adjusted EPS of $8.21 [2]. - Evercore ISI expects the company to perform in line with market expectations during the fiscal fourth quarter, with projected revenue of approximately $9.30 billion and a GAAP EPS of $8.41 [3]. Group 3: Company Overview - Lithia Motors is the largest auto dealer in the United States, involved in the retail of new and used vehicles along with related services [4].

Company Overview - Lithia Motors, Inc. is a leading automotive retailer in the United States, offering 52 vehicle brands across 459 locations in the U.S., U.K., and Canada as of December 31, 2024 [11]. Investment Ratings - Lithia Motors has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [11]. - The company has a Momentum Style Score of B, with shares increasing by 13.7% over the past four weeks [12]. Earnings Estimates - For fiscal 2025, three analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.84 to $35.62 per share [12]. - Lithia Motors has an average earnings surprise of +6.5%, suggesting a positive trend in earnings performance [12].

Core Insights - The automotive retail industry is experiencing a digital transformation, with major dealership groups investing in cloud-based platforms to enhance operational efficiency [2] Group 1: Company Performance - Asbury Automotive operates 175 new vehicle dealerships and 39 collision centers, generating $4.80 billion in revenue during Q3 2025 [3] - AutoNation, the largest automotive retailer in the U.S., reported $27.92 billion in trailing twelve-month revenue [4] - Lithia Motors, the second-largest retailer, achieved $37.61 billion in revenue [5] Group 2: Digital Initiatives - Asbury is implementing Tekion's cloud-based dealership management system across its network, with a focus on improving operational efficiency [3][7] - AutoNation has invested in digital retail innovations, allowing customers to complete approximately 80% of the car-buying process online [4] - Lithia Motors has developed its Driveway digital platform, averaging 1.3 million unique visitors per month in Q2 2025 [5] Group 3: Financial Metrics - Asbury posted a 13% revenue growth year-over-year in Q3, outperforming AutoNation's 6.9% and Lithia's 4.9% [6][8] - Asbury's profit margin stands at 3.15%, exceeding AutoNation's 2.38% despite AutoNation's larger scale [6] - Asbury trades at an 8x P/E ratio, compared to AutoNation's 12x and Lithia's 10x, reflecting its faster growth [8]

Core Insights - Lithia & Driveway (LAD) has demonstrated strong financial performance through significant share repurchases and strategic acquisitions, reflecting confidence in its profitability and cash flow generation [2][4]. Share Repurchase Program - In the latest quarter, LAD invested $274 million to repurchase nearly 875,000 shares at a weighted average price of $313, representing 3.3% of outstanding shares [1]. - Year-to-date, LAD has repurchased approximately 2.98 million shares for nearly $933 million at the same weighted average price, which accounts for 11.3% of outstanding shares, with $636 million remaining for future repurchases [2]. Strategic Acquisitions - LAD completed the acquisition of Fines Ford in the Greater Toronto Area, which is expected to increase annualized revenue by $100 million [3]. - This acquisition aligns with LAD's strategy to enhance its presence in the North American market and is expected to bring total year-to-date expected annualized revenue to $2.2 billion [4]. Company Overview - Lithia & Driveway is the largest global automotive retailer, offering a wide range of products and services throughout the vehicle ownership lifecycle, emphasizing convenience and transparency [5]. - The company aims to modernize personal transportation solutions and has a diversified business model that supports consistent and profitable growth in a large, unconsolidated industry [5].

Core Insights - Lithia Motors, Inc. (NYSE:LAD) is recognized as one of the best consumer cyclical stocks, with a significant presence in the vehicle retail market, operating 298 outlets in the US and 151 in the UK [1] - Analyst recommendations indicate a positive outlook, with 8 out of 15 analysts rating the stock as a Buy, including 4 Strong Buy ratings [1] - Evercore ISI has raised the share price target for Lithia Motors to $500 from $440, reflecting a broader positive reevaluation of the automotive sector with an expected 20% upside by 2026 [2] Company Developments - Lithia Motors announced the addition of three Hyundai dealerships, which is projected to generate $440 million in annualized revenue [3] - The company is adapting to the evolving automotive landscape, particularly regarding electric vehicles and tariffs impacting the industry [3] Management Insights - CEO Bryan DeBoer addressed the impact of tariffs, noting that Japanese and Korean manufacturers are responding positively by not raising prices, which could mitigate the effects of tariffs through improved vehicle efficiency and affordability [4]

Core Insights - Lithia Motors has seen significant interest from institutional investors, with several firms increasing their stakes in the company during the second quarter [1][8] - Analysts are optimistic about Lithia Motors, with multiple firms raising their price targets and maintaining positive ratings [2] - The company reported strong quarterly earnings, exceeding analyst expectations and showing year-over-year revenue growth [4] Institutional Investment Activity - Nisa Investment Advisors LLC increased its stake by 16.9%, owning 276 shares valued at $93,000 after purchasing 40 additional shares [1] - Assetmark Inc. raised its stake by 2.5%, now holding 1,753 shares worth $592,000 after acquiring 42 more shares [1] - Bessemer Group Inc. significantly boosted its holdings by 114.6%, now owning 88 shares valued at $29,000 after acquiring 47 shares [1] Analyst Ratings and Price Targets - Citigroup raised its price target from $385.00 to $399.00, maintaining a "buy" rating [2] - JPMorgan Chase increased its price objective from $320.00 to $350.00, giving an "overweight" rating [2] - Evercore ISI raised its price target from $440.00 to $500.00, assigning an "outperform" rating [2] Financial Performance - Lithia Motors reported an EPS of $9.50 for the quarter, surpassing the consensus estimate of $8.53 by $0.97 [4] - The company achieved revenue of $9.68 billion, exceeding expectations of $9.38 billion, with a year-over-year revenue increase of 4.9% [4] - The return on equity was reported at 13.42%, with a net margin of 2.39% [4] Dividend and Share Repurchase - Lithia Motors declared a quarterly dividend of $0.55 per share, representing an annualized dividend of $2.20 and a yield of 0.7% [5] - The company initiated a share repurchase program allowing for the buyback of $750 million in outstanding shares, indicating management's belief in the stock's undervaluation [6] Company Overview - Lithia Motors operates as an automotive retailer, with segments in Vehicle Operations and Financing Operations, providing a range of services including vehicle sales, parts, repair, and financing [9]

Core Viewpoint - Lithia Motors reported strong Q3 2025 earnings, beating estimates, but shares have declined by 11.5% since the last earnings report, underperforming the S&P 500 [1][2]. Financial Performance - Adjusted earnings per share for Q3 2025 were $9.50, up from $8.21 in the prior year and exceeding the Zacks Consensus Estimate of $8.53 [2]. - Total revenues reached $9.67 billion, a 5% increase year over year, surpassing the Zacks Consensus Estimate of $9.61 billion [2]. Segmental Performance - New vehicle retail revenues increased by 4.5% year over year to $4.63 billion, exceeding estimates due to higher unit sales and average selling price (ASP) [3]. - New vehicle units sold rose by 1.8% to 96,639 units, beating the estimate of 95,276 units, with ASP increasing to $47,913 from $46,649 [3]. - Used vehicle retail revenues grew by 8.9% to $3.1 billion, surpassing estimates, driven by higher ASP [4]. - Used vehicle retail units sold increased by 4% to 109,097 units, though below expectations, with ASP rising to $28,381 [4]. - Revenues from used vehicle wholesale fell by 6.1% to $367 million, missing estimates [5]. Cost and Expenses - Cost of sales increased by 5.4% year over year, while SG&A expenses rose by 5.8% to $998 million [7]. - Adjusted SG&A as a percentage of gross profit was 67.9%, up from 66% in the prior year [7]. Cash and Debt Position - Cash and cash equivalents increased to $417.1 million as of September 30, 2025, from $402.2 million at the end of 2024 [9]. - Long-term debt rose to $6.97 billion as of September 30, 2025, up from $6.12 billion at the end of 2024 [9]. Shareholder Returns - The company announced a dividend of 55 cents per share, payable on November 21, 2025 [8]. - Lithia repurchased approximately 1,312,000 shares at an average price of $312, with $889.3 million remaining under its buyback authorization [8]. Market Outlook - Lithia Motors holds a Zacks Rank 3 (Hold), indicating an expectation of an in-line return in the coming months [13]. - The company has a strong Growth Score of A but lags in Momentum Score with a D, while maintaining an aggregate VGM Score of A [12].

Group 1 - Group 1 operates extensively across the U.S., with a strong presence in the Northeast, Southeast, Texas, and California, and is the 1 auto retailer in Texas [1] - The company has 324 new vehicle franchises and 259 franchised new vehicle dealerships, generating $19.9 billion in revenue last year [3] - Group 1 is a leader in the aftermarket sales segment, successfully adapting to the complexities of modern vehicles, including electric vehicles [2] Group 2 - The U.S. auto dealer market is valued at approximately $2.95 trillion and is projected to reach $3.68 trillion by 2030, reflecting a CAGR of about 4.5% [6] - The demand for personal vehicles remains strong, supporting a steadily expanding automotive dealership industry [7] Group 3 - In Q3 2025, Group 1 reported record revenues of $5.8 billion, a 10% year-over-year increase, and a non-GAAP EPS of $10.45, up 5.6% year-over-year [9] - Analyst Babcock sees Group 1 as having significant growth potential, trading at 8.8x forward P/E, below the dealer average, with a price target of $510, suggesting a 30% gain [10] Group 4 - Lithia Motors, another major player, has 450 dealer locations and reported Q3 revenue of $9.7 billion, up 5% year-over-year [14] - Lithia's strategic goal includes expanding luxury car services, recently acquiring two luxury dealerships generating $450 million in annual revenue [13] Group 5 - AutoNation operates 323 dealer locations and reported Q3 revenue of $7.01 billion, a 7% year-over-year increase [19] - Analyst Babcock highlights AutoNation's consistent operating performance and favorable valuation, setting a price target of $250, indicating a 27% potential gain [20]

Group 1 - Barclays analyst John Babcock indicates investment opportunities in the automotive dealership sector due to expected profit growth in fiscal year 2026 and a recent decline in valuations [1] - The automotive retail industry is rated as "neutral," but certain companies show potential for above-average performance due to strong growth trends and resilience in adverse economic cycles [1] - Demand for used cars in the U.S. is weak, and auto credit data shows a decrease in demand in the subprime market [1] Group 2 - Companies rated "buy" include Carvana (CVNA.US) for its investment in optimizing online purchasing experience, while CarMax (KMX.US) is rated "sell" due to inconsistent operational performance and potential higher-than-expected loan loss reserves [1] - In the new and used car dealership segment, companies rated "buy" include AutoNation (AN.US), Group 1 Automotive (GPI.US), Lithia Motors (LAD.US), and Penske Automotive (PAG.US) based on strong same-store sales growth and stable operational performance [2] - Asbury Automotive (ABG.US) and Sonic Automotive (SAH.US) are rated "hold" [2]