Core Viewpoint - The Zacks Auto Retail and Wholesale industry is facing challenges due to declining profit per unit and high vehicle financing costs, but companies like Lithia Motors, Group 1 Automotive, and Asbury Automotive are expanding their digital and physical presence to adapt to these conditions [1]. Industry Overview - The automotive sector's performance is heavily reliant on retail and wholesale networks, which include dealerships and retail chains that sell new and used vehicles, light trucks, auto parts, and provide repair and maintenance services [2]. Economic Factors - As a consumer cyclical industry, the automotive sector's success is closely linked to economic conditions. High disposable income encourages spending on big-ticket items, while tighter budgets lead to reduced discretionary spending [3]. - The COVID-19 pandemic has accelerated the industry's shift towards e-commerce, which is expected to continue [3]. Sales Trends - Internal combustion engine (ICE) vehicle sales are projected to decline, reaching a record low of 75% of total sales volume in 2025, while electric and hybrid vehicle sales are expected to rise [3]. - Dealers with ICE inventories may need to lower prices to prevent inventory build-up, potentially impacting their profit margins [3]. Financing Environment - High-interest rates are causing customers to delay vehicle purchases, as the cost of vehicle financing remains elevated despite recent interest rate cuts by the Federal Reserve [4][5]. - The Fed's interest rate is currently in the range of 4.25-4.5%, significantly higher than the pre-pandemic level of around 2% [5]. Market Presence and Strategy - Auto dealers are expanding their market presence through strategic acquisitions, which enhance their market share and portfolio [6]. - A strong digital presence is also helping these companies reach a broader customer base, thereby improving profitability [6]. Industry Performance - The Zacks Auto Retail & Wholesale industry ranks 177, placing it in the bottom 29% of approximately 250 Zacks industries, indicating weak near-term prospects [7][8]. - The industry's earnings estimates for 2025 have declined by 30.80% over the past year, reflecting a negative outlook [9]. Stock Market Performance - The Zacks Auto Retail & Wholesale industry has underperformed compared to the S&P 500 and the broader Auto, Tires, and Truck sector, with a return of 8.7% over the past year, while the sector and S&P 500 grew by 26.2% and 26.9%, respectively [11]. Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 8.39X, compared to the S&P 500's 18.67X and the sector's 22X [12]. Company Highlights - **Lithia Motors, Inc. (LAD)**: A leading automotive retailer with a diversified product mix and multiple income streams, benefiting from its Driveway e-commerce platform and strategic acquisitions. The Zacks Consensus Estimate for 2025 sales and EPS implies year-over-year growth of 8.08% and 17.74%, respectively [13][14]. - **Group 1 Automotive, Inc. (GPI)**: A major automotive retailer with a diversified portfolio, focusing on dealership acquisitions to enhance growth. The Zacks Consensus Estimate for 2025 sales and EPS implies year-over-year growth of 11.33% and 5.27%, respectively [15][16]. - **Asbury Automotive Group, Inc. (ABG)**: One of the largest automotive retailers, leveraging its Clicklane e-commerce platform for online transactions. The Zacks Consensus Estimate for 2025 sales and EPS implies year-over-year growth of 2.70% and 7.23%, respectively [17][18].

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, incl ...

One company that I have been quite bullish about recently is Lithia Motors (NYSE: LAD ). For those not familiar with the firm, it operates as one of the largest global automotive retailers out there. In additionCrude Value Insights offers you an investing service and community focused on oil and natural gas. We focus on cash flow and the companies that generate it, leading to value and growth prospects with real potential.Subscribers get to use a 50+ stock model account, in-depth cash flow analyses of E&P f ...

Performance Brokerage Services, the leader in dealership buy-sell activity, announces the sale of North Branch Chevrolet in Minnesota from Lithia & Driveway (LAD) to Tyler Kadlec of Tom Kadlec Automotive.IRVINE, Calif., Dec. 16, 2024 /PRNewswire/ -- Performance Brokerage Services, North America's highest volume dealership brokerage firm, is proud to represent Lithia & Driveway (NYSE: LAD) on the sale of North Branch Chevrolet in North Branch, Minnesota to Tyler Kadlec of Tom Kadlec Automotive. Performan ...

Performance Brokerage Services, the leader in dealership buy-sell activity, announces the sale of Carson Nissan in California from Lithia & Driveway (LAD) to David Massoudi of Mass Auto Group.IRVINE, Calif., Dec. 6, 2024 /PRNewswire/ -- Performance Brokerage Services, North America's highest volume dealership brokerage firm, is proud to represent Lithia & Driveway (NYSE: LAD) on the sale of Carson Nissan in Carson, California to David Massoudi of Mass Auto Group. Lithia & Driveway – Performance Brokerag ...

A month has gone by since the last earnings report for Lithia Motors (LAD) . Shares have added about 14.1% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Lithia Motors due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Lithia Q3 Earnings Beat Expectations, Revenues ...

For Immediate ReleaseChicago, IL – November 14, 2024 – Today, Zacks Equity Research Lithia Motors (LAD) and Rush Enterprises (RUSHA) .Industry: Auto RetailLink: https://www.zacks.com/commentary/2369377/2-resilient-auto-retailers-rewarding-investors-amid-industry-hurdles?art_rec=quote-stock_overview-zacks_news-ID01-txt-2369377The outlook for the Zacks Auto Retail and Wholesale industry is muted now amid concerns over slowing vehicle sales growth. While consumer incentives offer some relief, they also squeeze ...

The outlook for the Zacks Auto Retail and Wholesale industry is muted now amid concerns over slowing vehicle sales growth. While consumer incentives offer some relief, they also squeeze retailers' profit margins. Adding to the pressure, uncertainty surrounding EV policies under Donald Trump's presidency may further dampen sales. Despite these complex challenges, auto retailers like Lithia Motors (LAD) and Rush Enterprises (RUSHA) appear well-prepared, leveraging strategic expansions and shareholder-focused ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | --- | --- | |----------------------------------------------------------------------------|-----------------------------|-----------------------------------|------------|------ ...

Lithia Motors (LAD) reported third-quarter 2024 adjusted earnings per share of $8.21, which declined from the prior-year quarter's $9.25 but surpassed the Zacks Consensus Estimate of $7.59. Higher-than-expected revenues from used vehicle wholesale and aftersales segments led to the beat. The auto retailer clocked revenues of $9.2 billion, which increased 11.4% year over year but missed the Zacks Consensus Estimate of $9.4 billion. Stay up-to-date with the quarterly releases: See Zacks Earnings Calendar. Seg ...