A month has gone by since the last earnings report for Lithia Motors (LAD) . Shares have lost about 11.5% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Lithia Motors due for a breakout? 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 EstimatesLithia reporte ...

Core Viewpoint - Lithia Motors (LAD) is performing well in the used vehicle and aftersales segments, but faces challenges in new vehicle profitability and consumer affordability [1]. Group 1: Company Performance - Lithia Motors is experiencing success in the used vehicle market and aftersales services, indicating strong operational performance in these areas [1]. - New vehicle profitability for Lithia Motors is under pressure, suggesting potential challenges in maintaining margins in this segment [1]. Group 2: Market Conditions - Consumer affordability remains a significant issue, which could impact sales and profitability for Lithia Motors in the new vehicle segment [1].

Core Insights - The consumer price index (CPI) increased by 0.3% in September, resulting in an annual inflation rate of 3%, which was lower than economists' expectations of 0.4% and 3.1% respectively [1] - Core CPI, excluding food and energy, showed a 0.2% monthly gain and maintained an annual rate of 3%, also below the anticipated 0.3% [2] - Gasoline prices surged by 4.1%, being the largest contributor to the inflation report, while overall commodity prices rose by 0.5% [2] Housing and Services - Shelter costs, which account for about one-third of the CPI weighting, increased by only 0.2% month-over-month and 3.6% year-over-year [3] - Services, excluding shelter costs, also saw a 0.2% increase [3] - New vehicle prices rose by 0.8%, while used car and truck prices decreased by 0.4% [3]

Core Insights - Lithia Motors (LAD) reported third-quarter 2025 adjusted earnings per share of $9.50, an increase from $8.21 in the prior-year quarter, exceeding the Zacks Consensus Estimate of $8.53. Revenues reached $9.67 billion, a 5% year-over-year increase, also surpassing the Zacks Consensus Estimate of $9.61 billion [1][10]. Segmental Performance - New vehicle retail revenues rose 4.5% year over year to $4.63 billion, exceeding the estimate of $4.5 billion, driven by higher unit sales and average selling price (ASP). New vehicle units sold increased by 1.8% to 96,639 units, surpassing the estimate of 95,276 units. The ASP for new vehicles increased to $47,913 from $46,649 in the prior-year quarter, above the estimate of $47,213. However, the gross margin in this segment contracted by 90 basis points to 6% due to a 5.6% rise in cost of sales to $4.35 billion [2]. - Used vehicle retail revenues increased by 8.9% year over year to $3.1 billion, surpassing the estimate of $3.08 billion, attributed to higher-than-expected ASP. Used vehicle retail units sold rose by 4% to 109,097 units, though below the expectation of 114,047 units. The ASP for used vehicles was $28,381, up 4.7% year over year, exceeding the estimate of $27,016. The gross margin in this segment decreased by 40 basis points to 6.2% [3]. - Revenues from used vehicle wholesale fell by 6.1% to $367 million, missing the estimate of $455.9 million. Finance and insurance revenues rose by 5% to $378.6 million but fell short of the estimate of $384.7 million. Aftersales revenues were $1.04 billion, a 2.4% year-over-year increase, but missed the estimate of $1.07 billion. Revenues from fleet and others contracted by 9.3% year over year to $166.5 million, although it exceeded the expectation of $163.5 million [4]. - Same-store new vehicle revenues increased by 5.5% year over year, while same-store used vehicle retail sales rose by 11.8%. Same-store revenues from finance and insurance rose by 5.7%, and aftersales unit revenues increased by 3.9% [5]. Financial Overview - Cost of sales increased by 5.4% year over year in the third quarter of 2025. SG&A expenses were $998 million, up 5.8% year over year. Adjusted SG&A as a percentage of gross profit was 67.9%, up from 66% in the prior-year quarter. Both pretax and net profit margins improved compared to the previous year [6]. - The company announced a dividend of 55 cents to be paid on November 21, 2025, to shareholders of record as of November 7, 2025. In the third quarter of 2025, Lithia repurchased nearly 1,312,000 shares at an average price of $312, with approximately $889.3 million remaining under its buyback authorization [7]. - As of September 30, 2025, Lithia had cash and cash equivalents of $417.1 million, up from $402.2 million as of December 31, 2024. Long-term debt increased to $6.97 billion from $6.12 billion as of December 31, 2024 [8].

Core Insights - AutoNation recorded higher third-quarter profit and sales, indicating strong performance across all major categories, including new vehicles [1] Company Performance - The company experienced growth in profit and sales during the third quarter, reflecting a positive trend in its overall business operations [1] - All major categories, particularly new vehicles, contributed to this growth, showcasing the company's robust market position [1]

Core Insights - Vehicle affordability is a significant concern for consumers and dealers, with the average new-vehicle transaction price exceeding $50,000 for the first time in September, reaching $50,080, a 3.6% increase year-over-year [1][2] Long-term Factors - Long-term trends indicate rising vehicle prices due to affluent buyers driving demand for higher-priced models, supported by access to capital and favorable loan rates [3] - A shift in consumer preferences from smaller, cheaper passenger cars to larger, more expensive pickups, SUVs, and crossovers is contributing to higher average vehicle prices, as domestic OEMs focus on more profitable segments [5] Short-term Factors - Short-term price increases are influenced by the growing sales of electric vehicles (EVs), which accounted for 10.5% market share in September, driven by consumers aiming to benefit from the expiring $7,500 federal EV tax credit [7] - The introduction of new 2026 models is also impacting average new vehicle prices, as these vehicles typically come with price increases [8] - High interest rates remain a concern, with the average new-vehicle interest rate at 9.43% in September, while used vehicles averaged 14.12% [6]

We're just getting the Q3 used auto report and for that we're going to turn to Phil Labau. Busy day in Autos, Phil. It is Carl.Let's start first off with what we're hearing from Cox Automotive. Every month they look at what the used car market has been doing with the Mannheim used auto report. And for the month of September, what they found is that prices were up 2% compared to last year.Yes, fractionally lower compared to August. Luxury model sales driven largely by EVs which were in big big demand up 2.3% ...

Core Insights - U.S. new car sales are experiencing an unexpected boost heading into Q4, driven by regulatory uncertainties and strong consumer demand [1][2][3] - Cox Automotive has raised its 2025 U.S. new vehicle sales forecast to 16.1 million, up from a previous estimate of 15.6-15.7 million, indicating a positive trend in the automotive market [1][2] - Sales are projected to increase by 4.6% compared to the same period last year, as consumers are motivated to purchase vehicles sooner due to fears of rising prices [2][3] Industry Analysis - The automotive market has benefited from a strong stock market and changing policies, which have encouraged consumers to buy vehicles ahead of potential price increases [3] - The current sales pace is at 16.3 million vehicles, but a slowdown is anticipated in Q4 and into the following year [3]

Core Viewpoint - Asbury Automotive Group's recent earnings report showed a mixed performance, with adjusted earnings per share exceeding estimates but revenues falling short, leading to a 15.6% increase in share price over the past month, outperforming the S&P 500 [1][3]. Financial Performance - Asbury reported Q2 2025 adjusted earnings per share of $7.43, surpassing the Zacks Consensus Estimate of $6.82 and increasing from $6.40 in the previous year [3]. - Total revenues for the quarter were $4.37 billion, a nearly 3% year-over-year increase, but below the Zacks Consensus Estimate of $4.45 billion [3]. Segment Performance - New vehicle revenues rose 6% year-over-year to $2.30 billion, slightly missing the consensus estimate of $2.31 billion, with retail units sold totaling 44,437, up 4% year-over-year but below the consensus of 45,291 units [4]. - Used vehicle retail revenues declined 3% year-over-year to $1.13 billion, missing the consensus estimate of $1.15 billion, with retail used vehicle units sold totaling 36,233, down 6% year-over-year [5]. - Revenues from the used vehicle wholesale business increased 11% to $156.3 million, exceeding the consensus estimate of $153 million [6]. - Finance and insurance business net revenues amounted to $182 million, down 5% year-over-year and below the consensus estimate of $203 million [7]. - Parts and service business revenues were $601.5 million, up from $580.9 million year-over-year but missing the consensus estimate of $625 million [8]. Cost and Debt Management - Selling, general & administrative expenses as a percentage of gross profit rose to 63.2%, a decrease of 198 basis points year-over-year [9]. - As of June 30, 2025, the company had cash and cash equivalents of $54.8 million, down from $69.4 million at the end of 2024, and long-term debt decreased to $3.05 billion from $3.14 billion [9]. Market Outlook - Estimates for Asbury Automotive have been trending upward, with a Zacks Rank of 3 (Hold), indicating an expectation of in-line returns in the coming months [12]. - The company has a subpar Growth Score of D and a Momentum Score of D, but a strong Value Score of A, placing it in the top quintile for value investment strategy [11]. Industry Comparison - Asbury Automotive is part of the Zacks Automotive - Retail and Wholesale industry, where Sonic Automotive has gained 17.1% over the past month, reporting revenues of $3.66 billion, a year-over-year increase of 5.9% [13].

Company Performance - Lithia Motors reported Q2 2025 adjusted earnings per share of $10.24, up from $7.87 in the prior year, exceeding the Zacks Consensus Estimate of $9.78 [3] - Revenues for the quarter reached $9.58 billion, a 3.7% year-over-year increase, also surpassing the Zacks Consensus Estimate of $9.53 billion [3] - New vehicle retail revenues increased 2.2% year over year to $4.5 billion, although it fell short of the estimate of $4.75 billion [4] - Used vehicle retail revenues rose 3.6% year over year to $3.1 billion, exceeding the estimate of $2.9 billion [5] - Revenues from used vehicle wholesale surged 32.3% to $383 million, outperforming the estimate of $340 million [6] - Same-store new vehicle revenues increased by 2% year over year, while same-store used vehicle retail sales rose 6.5% [7] Financial Metrics - Cost of sales increased by 3.7% year over year, with SG&A expenses reported at $1.01 billion [8] - Adjusted SG&A as a percentage of gross profit decreased to 67.7% from 67.9% in the prior year [8] - The company announced a dividend of 55 cents per share, payable on August 22, 2025 [9] - As of June 30, 2025, Lithia had cash and cash equivalents of $404.4 million, up from $402.2 million at the end of 2024 [10] - Long-term debt increased to $6.7 billion from $6.1 billion as of December 31, 2024 [10] Market Outlook - Lithia Motors has a Zacks Rank of 3 (Hold), indicating an expectation of an in-line return in the coming months [14] - The stock has an average Growth Score of C, a Momentum Score of D, and a Value Score of A, resulting in an aggregate VGM Score of B [13] - In comparison, AutoNation, a peer in the automotive retail industry, reported revenues of $6.97 billion for the last quarter, reflecting a year-over-year increase of 7.6% [15]