Latest news with #LithiaMotors
Yahoo
23-05-2025
- Automotive
- Yahoo
Citi Raised Price Target for Lithia Motors, Inc. (LAD) to $378
After the company's Q1 results report, Citi raised its price objective for Lithia Motors, Inc. (NYSE:LAD) from $375 to $378 while maintaining its Buy rating. A customer in a store, examining a new vehicle on the showroom floor. Lithia Motors, Inc. (NYSE:LAD) is less vulnerable to U.S. tariff threats than its counterparts in the auto industry and general merchants, according to a research report from Citi. The company pointed out that only 22% of Lithia Motors, Inc. (NYSE:LAD)'s 2024 gross profit was from the sale of new cars and that 25% of its yearly income comes from UK operations that are not impacted by US tariffs. Citi's upward adjustment shows that the company has faith in Lithia Motors, Inc. (NYSE:LAD)'s business strategy, especially its global diversity and low reliance on sales of new cars to generate gross profit. The updated price target and increased earnings forecasts were additionally driven by the higher-than-expected share repurchase activities. These factors make Lithia Motors, Inc. (NYSE:LAD) a more resilient participant in the retail car industry, providing comparatively shielded defense against macroeconomic shocks like tariff hikes. While we acknowledge the potential of LAD to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LAD and that has 100x upside potential, check out our report about this READ NEXT: and .
Yahoo
23-05-2025
- Automotive
- Yahoo
Citi Raised Price Target for Lithia Motors, Inc. (LAD) to $378
After the company's Q1 results report, Citi raised its price objective for Lithia Motors, Inc. (NYSE:LAD) from $375 to $378 while maintaining its Buy rating. A customer in a store, examining a new vehicle on the showroom floor. Lithia Motors, Inc. (NYSE:LAD) is less vulnerable to U.S. tariff threats than its counterparts in the auto industry and general merchants, according to a research report from Citi. The company pointed out that only 22% of Lithia Motors, Inc. (NYSE:LAD)'s 2024 gross profit was from the sale of new cars and that 25% of its yearly income comes from UK operations that are not impacted by US tariffs. Citi's upward adjustment shows that the company has faith in Lithia Motors, Inc. (NYSE:LAD)'s business strategy, especially its global diversity and low reliance on sales of new cars to generate gross profit. The updated price target and increased earnings forecasts were additionally driven by the higher-than-expected share repurchase activities. These factors make Lithia Motors, Inc. (NYSE:LAD) a more resilient participant in the retail car industry, providing comparatively shielded defense against macroeconomic shocks like tariff hikes. While we acknowledge the potential of LAD to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LAD and that has 100x upside potential, check out our report about this READ NEXT: and . Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Sun
22-05-2025
- Automotive
- The Sun
‘Highly recommended' car dealership with nearly perfect review scores suddenly shuts
A HIGHLY recommended car dealership with excellent reviews has closed suddenly. The Evans Halshaw location ceased trading quietly earlier this month with no warning given. One of the firms 'direct hubs' the small location in Stoke on Trent ceased trading without a word. It boasted glowing reviews from happy customers and an impressive 4.7 stars on Google. The little site in the carpark of a Morrisons could be used by locals to sell or part exchange their motors. Evans Halshaw has wound down operations in the UK with several dealerships and locations closing across the country. The move comes after the firm's parent company, Pendragon, was taken over by US-based Lithia Motors last year. With the takeover restructuring was implemented and it was reported in February that several dealerships would close. The Evans Halshaw Renault and Dacia site in Doncaster and its Vauxhall sites in Portsmouth and Wolverhampton were earmarked for closure. The firms Edinburgh Vauxhall dealership was sold off to Arnold Clark as part of the restructuring. Several of its direct hub sites were also slated to cease trading with the Stoke location shutting up shop this month. Lithia reportedly cut 250 jobs last year when the US business killed off the 'CarShop' used car supermarket brand. The Stoke Evans Halshaw Direct Pod was closed without warning and still shows as open online. Why are so many car dealerships closing down? By Summer Raemason According to Business Rescue Expert there are multiple reasons why car dealerships are folding across the UK. The first major factor is rising online car sales which are beating in-person sales at dealerships. With an extensive range of comparison and second-hand sites to chose from, may car buyers don't even step foot into a dealership anymore. Secondly, the actual cost to physically run the sites has soared. Rent, wages and energy bills have all been increasing for roughly the past five years, putting many out of pocket. Car manufacturing across the globe was also hit by a semiconductor chip shortage in 2022 which made it difficult to produce new motors. The high demand with limited supply created a backlog, which although has eased, is still having an impact on the industry. A third reason for recent closures is the shift to electric cars. They are becoming more popular, given the Government initiative to be Net Zero in 2050. The industry is also affected when companies merge or are bought by rivals. This may lead to some independent names falling victim to the ongoing spate of closures. The only indication of the impending closure was a small line of text buried away on the Evans Halshaw site. It read: "The following dealerships ceased trading in May 2025: Evans Halshaw Direct Pod Stoke." The Sun contacted Evans Halshaw for comment, with the company saying: "The Direct pod at Stoke has now closed for business." The direct pod in Stoke boasted glowing online reviews with dozens of customers offering four or five stars. An employee, James, was frequently mentioned and applauded for his good communication. The site also offered a "very good price" to customers looking to sell their cars according to the reviews. Customer David Pratt said: "Many thanks to James at Car Store Direct who made the whole experience of selling my car as easy and trouble free as possible, even providing a better price for my car than a number of competitors. "A very fair and professional service I would have no hesitation in recommending my friend's and relatives to Car Store Direct and James in particular." Stephen Wood, another former customer added: "Highly recommend James and the service we received. "Quick efficient and easy, money arrived in our account earlier than expected, well done." Craig Kennedy said: "Sold my car today and I must say the overall experience via carstore has been fantastic. "James was a pleasure to deal with. I would definitely deal with James and the company again if needed." Jayne Taylor said: "James was very helpful we turned up with a flat battery he helped to restart the car he was very polite and any queries were dealt with really promptly a very easy selling of my car." All four customers offered five star reviews to the Evans Halshaw location. Evans Halshaw confirmed that eight dealerships ceased trading earlier this year. Dacia Doncaster, Dacia Sheffield, Renault Doncaster, Vauxhall Portsmouth, Vauxhall Wolverhampton, Evans Halshaw Direct Pod St Albans, Evans Halshaw Direct Pod Hanworth and Evans Halshaw Direct Pod Orpington all shut shop in January. 3
Yahoo
13-05-2025
- Automotive
- Yahoo
LAD Q1 Earnings Call: Lithia Addresses Tariffs, Operational Efficiency, and Future Growth Mix
Automotive retailer Lithia Motors (NYSE:LAD) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 7.2% year on year to $9.18 billion. Its non-GAAP profit of $7.65 per share was 2.8% below analysts' consensus estimates. Is now the time to buy LAD? Find out in our full research report (it's free). Revenue: $9.18 billion vs analyst estimates of $9.37 billion (7.2% year-on-year growth, 2.1% miss) Adjusted EPS: $7.65 vs analyst expectations of $7.87 (2.8% miss) Adjusted EBITDA: $461.4 million vs analyst estimates of $406.3 million (5% margin, 13.6% beat) Operating Margin: 4.4%, in line with the same quarter last year Free Cash Flow Margin: 2.8%, similar to the same quarter last year Locations: 451 at quarter end, up from 387 in the same quarter last year Same-Store Sales rose 2.5% year on year (-1.9% in the same quarter last year) Market Capitalization: $7.96 billion Lithia's first quarter results reflected the impact of ongoing market changes and operational adjustments, as management pointed to growth in new vehicle sales and aftersales as key drivers. CEO Bryan DeBoer noted that the company's omnichannel approach, which integrates digital and physical retail, has begun to yield measurable gains in engagement and unit volume, particularly in its value auto segment and financing operations. DeBoer emphasized the adaptability of Lithia's business model, especially its ability to offer a broad range of vehicle affordability options and to navigate shifts in consumer sentiment and tariffs. Looking forward, management highlighted a disciplined focus on operational execution and capital allocation. CFO Tina Miller discussed ongoing efforts to lower selling, general, and administrative (SG&A) costs and to optimize the financing portfolio. DeBoer also reiterated plans to pursue targeted acquisitions within the United States, while maintaining flexibility for share repurchases given current market valuations. The executive team acknowledged potential volatility from tariffs and industry consolidation but expressed confidence in Lithia's ability to increase market share and deliver consistent profitability across its expanding footprint. Lithia's management attributed Q1 performance to a combination of diversified product offerings, cost discipline, and the maturing of key business adjacencies. The company's ability to adapt to tariffs and maintain operational flexibility was a recurring theme throughout the call. Tariff Resilience and Inventory Management: Lithia's product mix, with about 45% of inventory unaffected by current tariffs, helped cushion the impact of supply chain disruptions. Management noted that recent inventory reductions improved cost efficiency, with new and used vehicle days' supply falling by nearly 10 days sequentially. Growth in Value Auto Segment: The value auto segment, targeting affordability-conscious buyers, saw a 39% year-over-year increase in sales. DeBoer explained this segment is less sensitive to tariffs and general market fluctuations, supporting Lithia's strategy of serving a wide range of customer needs. Financing Operations Expansion: The Driveway Finance subsidiary reported a significant sequential increase in loan originations and improved net interest margin. Management emphasized the importance of this adjacency, noting its higher contribution to earnings relative to traditional indirect lending. After-Sales and Service Strength: Aftersales gross profit rose 7.5% year over year, driven by both warranty and customer-pay work. Management highlighted the potential to further expand capacity and utilization in this high-margin business. SG&A Efficiency Initiatives: The company reduced SG&A as a percentage of gross profit, building on its 'sixty-day plan.' Management aims for ongoing monthly improvements, driven by both personnel cost optimization and vendor consolidation, while leveraging technology upgrades like the Pinewood software system. Management's outlook for the remainder of the year centers on maintaining operational flexibility in the face of tariff-related uncertainty, leveraging adjacencies, and disciplined capital allocation. Tariff Environment Adaptability: Lithia's diversified inventory and ability to adjust mix position it to respond to potential tariff changes and supply chain shifts, limiting exposure compared to peers more reliant on affected imports. Adjacency Contribution and Ecosystem Scaling: The company's ecosystem, including financing, aftersales, digital platforms, and fleet management, is expected to deliver incremental earnings growth and enhance customer retention. Cost Discipline and Capital Allocation: Ongoing SG&A reduction, targeted acquisitions in profitable regions, and balanced share repurchases are expected to underpin profitability. Management flagged personnel and vendor cost reductions, as well as operational scale, as critical levers for further margin improvement. Ryan Sigdahl (Craig Hallum Group): Asked about the impact of tariffs and inventory levels on demand trends. DeBoer explained that Lithia's diversified inventory lessens tariff exposure and that recent inventory reductions position the company well for future quarters. John Murphy (Bank of America): Inquired about the role of adjacencies like Driveway Finance and whether margin trade-offs are considered to gain market share. DeBoer stressed that transparent pricing and expanded financing help attract more customers, while maintaining gross profit per vehicle. Rajat Gupta (JPMorgan): Sought clarification on SG&A trends and the sustainability of recent improvements. Miller responded that disciplined execution and technology initiatives are driving cost reductions, with further opportunities identified for the second half of the year. Jeff Licht (Stephens): Focused on the value auto segment's sales dynamics. DeBoer detailed how value autos appeal to cash buyers and turn over faster than certified used vehicles, supporting capital efficiency and customer acquisition. Bret Jordan (Jefferies): Queried aftersales growth potential amid tariffs and regional profit differences. DeBoer highlighted that aftersales demand is relatively inelastic, and that certain regions, especially in the South, remain more profitable due to regulatory and fee structures. In the coming quarters, the StockStory team will monitor (1) Lithia's ability to further expand its value auto and aftersales segments, (2) progress toward SG&A efficiency targets and technology-driven cost savings, and (3) execution of strategic acquisitions and capital allocation priorities. We will also track how the company adapts its inventory and pricing strategies in response to ongoing tariff developments and shifting consumer demand patterns. Lithia currently trades at a forward P/E ratio of 8.6×. At this valuation, is it a buy or sell post earnings? Find out in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
Yahoo
10-05-2025
- Automotive
- Yahoo
Lithia Motors, Inc. (LAD): A Bull Case Theory
We came across a bullish thesis on Lithia Motors, Inc. (LAD) on Substack by Chit Chat Stocks. In this article, we will summarize the bulls' thesis on LAD. Lithia Motors, Inc. (LAD)'s share was trading at $295.94 as of May 7th. LAD's trailing and forward P/E were 9.34 and 8.51 respectively according to Yahoo Finance. A wide view of a large auto dealership, its showroom packed with different types of cars. Lithia Motors is a quietly exceptional compounder in the fragmented U.S. auto dealership space, having built a decades-long track record of shareholder value creation. As the largest automotive retailer in North America, with nearly 500 locations and over 50 vehicle brands across the U.S. and Canada, Lithia has compounded returns at 13.5% annually since its 1996 IPO—beating the S&P 500's 9% over the same period. Despite its size, it holds only about 1.5% market share in a sector with over 17,000 dealerships, offering a long growth runway through its proven roll-up strategy. Lithia has developed relationships with many of these dealerships, and like Constellation Software, it patiently waits for the right moment to strike, capitalizing on years of groundwork laid with potential sellers. The company's acquisition model focuses on rural dealerships, which often come with geographic exclusivity due to contractual restrictions from original equipment manufacturers (OEMs), essentially giving Lithia local moats with minimal risk of direct competition. Moreover, Lithia's size allows it to centralize back-office operations, shift inventory across its footprint, and mitigate brand-specific cyclicality thanks to its broad brand exposure. Contrary to the popular assumption that car sales drive dealership profitability, Lithia generates roughly 65% of its gross profit from high-margin and recurring services like parts, servicing, and financing. This segment provides a cushion during economic slowdowns when car sales decline, giving the business a built-in defensive characteristic. Acquisitions are done at attractive multiples—typically 0.25x sales, translating to around 6x earnings given Lithia's 4% operating margin. This has led to consistent, strong returns on invested capital and robust EPS growth. One major reason why these returns haven't been competed away is that the dealership model is gated. OEMs must approve the sale of a dealership, and Lithia has built a reputation as a value-adding buyer that OEMs trust. They can show proof of improved volume and efficiency post-acquisition, giving them a competitive edge over private equity or less experienced operators. Despite its operational strengths and acquisition prowess, Lithia trades at a modest 9x earnings multiple due to multiple risks such as the rise of online used car marketplaces could erode Lithia's customer funnel; even though vehicle sales are not the company's profit engine, they serve as crucial entry points for long-term customer relationships that feed into its lucrative service and financing offerings. If online platforms disrupt that initial customer capture, it may impact downstream profitability. Another structural concern is the rise of electric vehicles (EVs), which require significantly less maintenance than internal combustion vehicles. With servicing and parts representing a sizable portion of Lithia's gross profit, the company may eventually see some margin compression if EV penetration accelerates rapidly. Interest rate sensitivity adds another layer of investor hesitation. Lithia's business model relies heavily on acquisitions, and its balance sheet is geared accordingly, with net debt to EBITDA sitting at 7x. In a high-rate environment, both consumer demand and Lithia's cost of capital are pressured, making debt-financed acquisitions more expensive and reducing deal flow. However, the company has shown resilience in past downturns, maintaining positive operating margins even during the Great Financial Crisis in 2008 when margins dipped to just 2%. Much of Lithia's cost structure is variable—like sales commissions—allowing for flexibility during economic stress. Moreover, recessions tend to create buying opportunities as weaker dealerships come under distress, allowing Lithia to scoop up assets at lower prices and expand its moat. Ultimately, Lithia Motors offers a compelling long-term investment opportunity. With a durable and cash-generative business model, a structurally advantaged acquisition strategy, and an expansive runway for consolidation in a fragmented industry, the stock presents an asymmetric risk/reward profile. Lithia Motors, Inc. (LAD) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held LAD at the end of the fourth quarter which was 43 in the previous quarter. While we acknowledge the risk and potential of LAD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LAD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
