Lithia Motors (NYSE:LAD) Shares Gap Up Following Better-Than-Expected Earnings

Shares of Lithia Motors, Inc. (NYSE:LAD) gapped up before the market opened on Wednesday following a stronger than expected earnings report. The stock had previously closed at $299.53, but opened at $317.95. Lithia Motors shares last traded at $301.7150, with a volume of 38,967 shares.

The company reported $10.34 EPS for the quarter, beating the consensus estimate of $9.70 by $0.64. The company had revenue of $9.95 billion for the quarter, compared to analyst estimates of $9.75 billion. Lithia Motors had a return on equity of 12.16% and a net margin of 1.88%. The firm’s revenue was up 2.8% compared to the same quarter last year. During the same period last year, the company posted $9.50 earnings per share.

Lithia Motors Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, August 21st. Stockholders of record on Friday, August 7th were paid a $0.70 dividend. This represents a $2.80 dividend on an annualized basis and a dividend yield of 0.9%. This is an increase from Lithia Motors’s previous quarterly dividend of $0.57. The ex-dividend date was Friday, August 7th. Lithia Motors’s payout ratio is 9.29%.

Key Headlines Impacting Lithia Motors

Here are the key news stories impacting Lithia Motors this week:

• Positive Sentiment: Third-quarter revenue reached approximately $9.9 billion to $9.95 billion, above the FactSet consensus estimate of $9.75 billion. Lithia & Driveway Q3 Revenue Earnings Flash
• Positive Sentiment: Adjusted earnings per share were $10.34, beating the $9.70 consensus by $0.64. Diluted EPS was $13.22, up 54% year over year, while adjusted diluted EPS increased 9%. Lithia & Driveway Q3 Adjusted EPS Earnings Flash
• Positive Sentiment: Used-vehicle retail gross profit per unit increased 11% year over year, while aftersales gross profit rose 2.4% and same-store aftersales gross margin expanded 100 basis points to 59.5%. These trends indicate continued strength in key higher-margin operations. Lithia & Driveway Third Quarter Results
• Positive Sentiment: Financing Operations income climbed 69% to $32.3 million, supported by record originations of $937 million and an 18.3% penetration rate.
• Positive Sentiment: Lithia repurchased $85 million of stock during the quarter—1.1% of shares outstanding—and raised its quarterly dividend by 7%, enhancing shareholder returns.

Wall Street Analysts Forecast Growth

A number of equities analysts have weighed in on the company. JPMorgan Chase & Co. decreased their price target on Lithia Motors from $340.00 to $320.00 and set a “neutral” rating for the company in a report on Tuesday, October 6th. Morgan Stanley decreased their price objective on shares of Lithia Motors from $358.00 to $310.00 and set an “equal weight” rating for the company in a research report on Monday, October 5th. Bank of America boosted their price target on Lithia Motors from $350.00 to $417.00 and gave the stock a “buy” rating in a research note on Thursday, July 9th. UBS Group reduced their price target on Lithia Motors from $440.00 to $335.00 and set a “neutral” rating for the company in a report on Wednesday, October 7th. Finally, Jefferies Financial Group restated a “buy” rating and set a $490.00 price objective on shares of Lithia Motors in a research note on Thursday, July 30th. Six analysts have rated the stock with a Buy rating and six have issued a Hold rating to the company. According to data from MarketBeat.com, Lithia Motors has a consensus rating of “Moderate Buy” and a consensus target price of $402.60.

Insider Transactions at Lithia Motors

In other Lithia Motors news, Director Stacy Congdon sold 75 shares of the stock in a transaction on Friday, September 11th. The shares were sold at an average price of $370.73, for a total transaction of $27,804.75. Following the transaction, the director directly owned 2,300 shares in the company, valued at $852,679. This represents a 3.16% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 1.08% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Lithia Motors

Several hedge funds and other institutional investors have recently modified their holdings of the stock. Mitsubishi UFJ Asset Management Co. Ltd. acquired a new stake in shares of Lithia Motors in the 2nd quarter valued at about $30,000. Addison Advisors LLC acquired a new position in Lithia Motors in the second quarter worth about $30,000. Versant Capital Management Inc grew its stake in Lithia Motors by 1,311.1% in the second quarter. Versant Capital Management Inc now owns 127 shares of the company’s stock worth $37,000 after purchasing an additional 118 shares in the last quarter. Bessemer Group Inc. grew its stake in Lithia Motors by 68.0% in the first quarter. Bessemer Group Inc. now owns 173 shares of the company’s stock worth $43,000 after purchasing an additional 70 shares in the last quarter. Finally, GAMMA Investing LLC increased its holdings in Lithia Motors by 32.1% in the second quarter. GAMMA Investing LLC now owns 173 shares of the company’s stock valued at $50,000 after buying an additional 42 shares during the last quarter.

Lithia Motors Stock Performance

The company has a fifty day moving average of $335.78 and a two-hundred day moving average of $314.99. The stock has a market capitalization of $6.59 billion, a P/E ratio of 9.98, a price-to-earnings-growth ratio of 0.68 and a beta of 1.27. The company has a debt-to-equity ratio of 1.46, a current ratio of 1.00 and a quick ratio of 0.21.

About Lithia Motors

Lithia Motors, Inc is an automotive retailer headquartered in Medford, Oregon. Operating under the Lithia & Driveway name, the company sells new and used vehicles through a network of franchised dealerships and digital retail channels. Its dealerships represent a broad range of domestic, Asian and European automotive brands.

In addition to vehicle sales, Lithia provides related services including vehicle financing and insurance products, parts and maintenance, collision repair, and other after-sales support.