Core Insights - Lithia Motors (LAD) reported quarterly earnings of $7.79 per share, exceeding the Zacks Consensus Estimate of $7.01 per share, but down from $8.24 per share a year ago, representing an earnings surprise of 11.13% [1] - The company achieved revenues of $9.22 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.62% and up from $7.67 billion year-over-year [2] - Lithia Motors has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The immediate price movement of Lithia Motors' stock will largely depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $8.05 on revenues of $8.98 billion, while for the current fiscal year, the estimate is $34.65 on revenues of $38.53 billion [7] Industry Context - The Automotive - Retail and Whole Sales industry, to which Lithia Motors belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - Lithia Motors (LAD) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended December 2024, with the actual results being crucial for its near-term stock price movement [1][2]. Earnings Expectations - The consensus estimate for Lithia Motors' quarterly earnings is $7.01 per share, reflecting a year-over-year decrease of 14.9%, while revenues are projected to be $8.81 billion, an increase of 14.9% from the previous year [3]. - The earnings report is expected to be released on February 12, and the stock may rise if the actual numbers exceed expectations, whereas a miss could lead to a decline [2]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 0.5% higher, indicating a reassessment by analysts regarding the company's earnings prospects [4]. - The Most Accurate Estimate for Lithia Motors is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +2.79%, suggesting a likelihood of beating the consensus EPS estimate [10][11]. Earnings Surprise History - In the last reported quarter, Lithia Motors was expected to post earnings of $7.59 per share but actually delivered $8.21, resulting in a positive surprise of +8.17% [12]. - Over the past four quarters, the company has surpassed consensus EPS estimates three times [13]. Industry Comparison - AutoNation (AN), another player in the automotive retail industry, is expected to report earnings of $4.26 per share for the same quarter, indicating a year-over-year decline of 15.1%, with revenues projected at $6.64 billion, down 1.8% from the previous year [17]. - AutoNation's consensus EPS estimate has been revised 1.5% higher in the last 30 days, resulting in an Earnings ESP of 2.11%, suggesting a likelihood of beating the consensus EPS estimate [18].

Acquisition and Expansion - Lithia & Driveway (LAD) has acquired Stohlman Subaru in Sterling, Virginia, enhancing its presence in the Mid-Atlantic region [1] - The acquisition is expected to add $80 million in annualized revenue and was financed using existing on-balance sheet capacity [2] Capital Allocation Update - Since the end of Q3, LAD has repurchased $107 million worth of shares at an average price of $372 [3] - Approximately $454 million remains available under the current share repurchase authorization [3] Company Overview - Lithia & Driveway (LAD) is one of the largest global automotive retailers, offering a wide range of products and services throughout the vehicle ownership lifecycle [4] - The company provides convenient and hassle-free experiences through a comprehensive network of physical locations, ecommerce platforms, captive finance solutions, and other synergistic adjacencies [4] - LAD aims to modernize personal transportation solutions, delivering consistent, low-risk, and profitable growth in a massive and unconsolidated industry [4]

Core Viewpoint - Lithia Motors (LAD) is well-positioned to continue its earnings-beat streak in the upcoming report, having surpassed earnings estimates consistently in recent quarters [1][3]. Earnings Performance - For the last reported quarter, Lithia Motors achieved earnings of $8.21 per share, exceeding the Zacks Consensus Estimate of $7.59 per share by 8.17% [2]. - In the previous quarter, the company reported earnings of $7.87 per share against an expected $7.09 per share, resulting in a surprise of 11% [2]. Earnings Estimates - There has been a favorable change in earnings estimates for Lithia Motors, with a positive Earnings ESP (Expected Surprise Prediction) indicating strong potential for an earnings beat [3][6]. - The current Earnings ESP for Lithia Motors is +1.83%, suggesting that analysts have recently become more optimistic about the company's earnings prospects [6]. Predictive Metrics - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [4]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [5].

Core Insights - Lithia & Driveway (NYSE: LAD) will release its fourth quarter 2024 earnings on February 12, 2025, 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] Company Overview - Lithia & Driveway is one of the largest global automotive retailers, offering a wide array of products and services throughout the vehicle ownership lifecycle [3] - The company provides convenient and hassle-free experiences through a comprehensive network of physical locations, ecommerce platforms, and captive finance solutions [3] - Lithia & Driveway aims to deliver consistent, low-risk, and profitable growth in a massive and unconsolidated industry [3] - The company's diversified and competitively differentiated design allows for flexibility and scale in modernizing personal transportation solutions [3]

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].

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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 ...