Lithia Motors Inc . (NYSE:LAD) stock soared to a 52-week high, reaching a price level of $332.1, as the company continues to ride a wave of positive momentum in the automotive retail sector. This impressive peak reflects a substantial 25.3% increase in the stock's value over the past year, signaling strong investor confidence in Lithia Motors' business strategy and growth prospects. The company's performance is particularly noteworthy in the context of a challenging economic environment, where consumer spending and market dynamics have been unpredictable. The 52-week high milestone underscores Lithia Motors' resilience and adaptability in a competitive industry.
In other recent news, Lithia Motors & Driveway outperformed third-quarter earnings estimates but fell short on revenue forecasts. The auto retailer posted an adjusted earnings per share of $8.21 for Q3, exceeding the analyst consensus of $7.59. However, the revenue of $9.2 billion did not meet the anticipated $9.5 billion. Despite this, Lithia reported a record third-quarter revenue, marking an 11% year-on-year increase from $8.3 billion in Q3 2023, attributing this growth to its operational efficiency and ability to leverage size and scale.
Adjusted net income saw a decline of 14% to $222 million compared to $258 million in the same period last year. Meanwhile, Lithia's financing operations turned profitable for the second consecutive quarter, generating an income of $1 million. Notably, the company's Driveway Finance Corporation originated $518 million in loans during the quarter.
In further developments, Lithia's revenue for the first nine months of 2024 increased by 16% to $27.0 billion, with the company acquiring over $5.9 billion in annualized revenues year-to-date through acquisitions. The company ended the quarter with approximately $1.1 billion in cash and available credit, and the Board of Directors approved a dividend of $0.53 per share for the third quarter.
InvestingPro Insights
Lithia Motors Inc. (LAD) continues to demonstrate its strength in the automotive retail sector, as evidenced by its recent stock performance and financial metrics. According to InvestingPro data, LAD's market capitalization stands at $8.73 billion, reflecting its significant presence in the Specialty Retail industry. The company's P/E ratio of 9.83 suggests that it may be undervalued compared to its peers, potentially offering an attractive entry point for investors.
InvestingPro Tips highlight that LAD has raised its dividend for 10 consecutive years, indicating a commitment to shareholder returns. This is particularly impressive given that the company operates with a significant debt burden. The stock's recent performance aligns with the InvestingPro observation that LAD has shown a strong return over the last three months, with data showing a 20.84% price total return in that period.
It's worth noting that LAD's revenue growth of 15.04% in the last twelve months demonstrates the company's ability to expand its business even in challenging economic conditions. However, investors should be aware that LAD suffers from weak gross profit margins, which stood at 15.97% in the same period.
For those interested in a deeper analysis, InvestingPro offers 12 additional tips for LAD, providing a comprehensive view of the company's financial health and market position.
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