# Lithia Motors (LAD.US)

Canonical: https://gigainvestors.com/s/LAD

Analysis as of: 2026-10-16T07:29:44.845Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $295.31 per share; close as of 2026-10-15.

Estimated value: low $782.38 per share, central $1,117.64 per share, high $1,312.87 per share. Buy at or below the central value $1,117.64 per share. Valuation as of 2026-10-16T07:29:44.845Z; scenarios are not confidence intervals.

Expected annual return: 27.4% at the stated quote. About 27.4% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 0 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 0

- Years with a net loss: 0

- Operating margin variation: 0.26×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.04×

- FY2017: 0.04×

- FY2018: 0.04×

- FY2019: 0.04×

- FY2020: 0.05×

- FY2021: 0.07×

- FY2022: 0.07×

- FY2023: 0.05×

- FY2024: 0.04×

- FY2025: 0.04×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 8.1%

- ROIC, second-lowest year: 6.7%

- Typical minus recent gross margin: 0.2 pp

- Typical gross margin (annual median): 15.4%

- Recent gross margin (lower of latest and 3-year median): 15.2%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.1%

- ROIC including acquisitions, ten-year median: 6.0%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 7.9%

- FY2017: 7.7%

- FY2018: 8.4%

- FY2019: 7.6%

- FY2020: 8.3%

- FY2021: 14.1%

- FY2022: 12.3%

- FY2023: 8.6%

- FY2024: 6.7%

- FY2025: 5.8%

### economics: pass

- Owner earnings / net income, 5-yr: 1.03×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $5.1B

- Net income, five-year total: $4.9B

- Return on incremental invested capital: 15.6%

- Working capital / revenue, annual change: -1.0 pp

- Working capital / revenue, change between three-year averages: -5.9 pp

- Working capital / revenue, final three-year average: 18.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 1.03×

- FY2024: 1.05×

- FY2025: 1.08×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 7.9% vs 6.7%

- Per-share earnings: 7.73 to 32.27 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.4%

- Ordinary dilution, 5-year annual growth: 1.1%

- Market cap gain: $5.3B

- Cumulative retained earnings: $5.8B

- Diluted shares, 10-year annual growth: -0.4%

- Diluted shares, 5-year annual growth: 1.1%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 19.6%

- Per-share value change: $24.54

- Per-share value, starting three-year median: $7.73

- Per-share value, ending three-year median: $32.27

- Buybacks concentrated in cheaper years (correlation): 0.58

- Average buyback yield: 4.6%

- Buyback history: 10 years

- Debt-funded buybacks: Yes

- Acquisition spending: $10B

- Cumulative net income, 10 years: $6.4B

- ROIC, first three-year median: 7.9%

- ROIC, last three-year median: 6.7%

Chart: Earnings per share; fiscal year observations.

- FY2016: $7.73

- FY2017: $9.77

- FY2018: $10.84

- FY2019: $11.60

- FY2020: $19.51

- FY2021: $36.56

- FY2022: $44.20

- FY2023: $36.26

- FY2024: $29.59

- FY2025: $32.27

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: 1.8%

- Receivables to sales index (DSRI): 0.88×

- Restructuring years, last five: 1

- Stock compensation / operating cash flow: 16.9%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.44×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 1.17×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 2.8%

- FY2017: 2.1%

- FY2018: -4.7%

- FY2019: -3.7%

- FY2020: -0.9%

- FY2021: -6.6%

- FY2022: 12.4%

- FY2023: 7.5%

- FY2024: 1.6%

- FY2025: 1.8%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Miller](https://gigainvestors.com/LMM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Ruane](https://gigainvestors.com/RC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Abrams](https://gigainvestors.com/abc): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Leon Cooperman](https://gigainvestors.com/oa): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 24% since Nov 2024 · "Lithia (NYSE:LAD) Reports Sales Below Analyst Estimates In Q1 Earnings" (finance.yahoo.com, Apr 2025) · sales +4%

Story as of 2026-10-16T09:59:02.950Z; price observation 2026-10-15.

Price needs cash profits to shrink 10.3% a year for ten years

- 2026-04-29: Lithia Q1 Earnings Top Estimates on Higher Aftersales Margin ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/lithia-q1-earnings-top-estimates-145200100.html))

- 2026-07-30: LAD Q2 Earnings Beat on Used Margins and Financing Growth ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/lad-q2-earnings-beat-used-153100685.html))

### Sales · FY2024–2025

sales +4%; source https://www.sec.gov/Archives/edgar/data/1023128/000102312826000015/lad-20251231.htm; observed 2026-02-25.

- FY2016: $8.7B 

- FY2017: $10B 

- FY2018: $12B 

- FY2019: $13B 

- FY2020: $13B 

- FY2021: $23B 

- FY2022: $28B 

- FY2023: $31B 

- FY2024: $36B 

- FY2025: $38B 

### Gross margin · FY2025

gross margin 15.2%; source https://www.sec.gov/Archives/edgar/data/1023128/000102312826000015/lad-20251231.htm; observed 2026-02-25.

- FY2016: 15.0% 

- FY2017: 15.0% 

- FY2018: 15.0% 

- FY2019: 15.4% 

- FY2020: 16.9% 

- FY2021: 18.7% 

- FY2022: 18.3% 

- FY2023: 16.8% 

- FY2024: 15.4% 

- FY2025: 15.2% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in auto & truck dealerships; annual sales are USD 37.6 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1023128/000102312826000015/lad-20251231.htm (filed 2026-02-25); FY2025: revenue 37634900000; grossProfit 5733000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 15.2% to 16.8% during 2023–25; it earns 8.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: grossProfit / revenue = 16.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: grossProfit / revenue = 15.4%.

- Source: https://www.sec.gov/Archives/edgar/data/1023128/000102312826000015/lad-20251231.htm (filed 2026-02-25); FY2025: grossProfit / revenue = 15.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); 10-year return on capital observations [[2016,0.07859604211045775],[2017,0.0773463041347771],[2018,0.08433909859529992],[2019,0.0760872532618484],[2020,0.08261592139374917],[2021,0.14105664366291676],[2022,0.12316578525556394],[2023,0.08567281066173829],[2024,0.06671479975751266],[2025,0.057625037035887165]]; median 0.08060598175210346. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 18% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1023128/000102312826000015/lad-20251231.htm (filed 2026-02-25); Gross margin observations: [[2021,0.18653889110315922],[2022,0.1827882984837412],[2023,0.16844434851798998]]; range within 2 percentage points.

### Where the cash goes

Earns 15.6% on new investment; paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2016: growth capex 51500000; upkeep 49300000; cash acquisitions 234700000; owner earnings 197058000. Growth capex plus acquisitions / owner earnings = 1.4523642785372834.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2017: growth capex 47700000; upkeep 57700000; cash acquisitions 460400000; owner earnings 245217000. Growth capex plus acquisitions / owner earnings = 2.072042313542699.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2018: growth capex 82600000; upkeep 75400000; cash acquisitions 373800000; owner earnings 265700000. Growth capex plus acquisitions / owner earnings = 1.717726759503199.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2019: growth capex 10900000; upkeep 114000000; cash acquisitions 366600000; owner earnings 271500000. Growth capex plus acquisitions / owner earnings = 1.3904235727440146.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2020: growth capex 46500000; upkeep 121300000; cash acquisitions 1503300000; owner earnings 470300000. Growth capex plus acquisitions / owner earnings = 3.2953433978311715.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2021: growth capex 94100000; upkeep 166300000; cash acquisitions 2699300000; owner earnings 1060100000. Growth capex plus acquisitions / owner earnings = 2.6350344307140836.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2022: growth capex 75000000; upkeep 228100000; cash acquisitions 1243600000; owner earnings 1251000000. Growth capex plus acquisitions / owner earnings = 1.0540367705835332.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: growth capex 0; upkeep 230200000; cash acquisitions 1185100000; owner earnings 1035200000. Growth capex plus acquisitions / owner earnings = 1.1448029366306027.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: growth capex 0; upkeep 351400000; cash acquisitions 1248500000; owner earnings 840400000. Growth capex plus acquisitions / owner earnings = 1.4856020942408377.

- Source: https://www.sec.gov/Archives/edgar/data/1023128/000102312826000015/lad-20251231.htm (filed 2026-02-25); FY2025: growth capex 0; upkeep 350900000; cash acquisitions 886400000; owner earnings 883600000. Growth capex plus acquisitions / owner earnings = 1.003168854685378.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Incremental return on capital 0.15584927986932637, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Dividend observations: [[2016,24131000],[2017,26544000],[2018,27700000],[2019,27600000],[2020,29100000],[2021,38800000],[2022,45200000],[2023,52800000],[2024,56500000],[2025,55300000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1023128/000102312826000015/lad-20251231.htm (filed 2026-02-25); FY2025: cash repurchases 960900000 USD.

### Are managers owners

Insiders own 1.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); LAD.US SharesStats.PercentInsiders = 1.203 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits shrink 10.3% yearly over ten years; actual growth was 17.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Ten-year compound average after fade. Initial solved rate -0.15688360794640105. Price 295.31; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 6.908229520573801 → FY2025 34.78740157480315. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $85.78 per share

- 2016-11: $91.90 per share

- 2016-12: $96.83 per share

- 2017-01: $103.12 per share

- 2017-02: $95.67 per share

- 2017-03: $85.65 per share

- 2017-04: $95.55 per share

- 2017-05: $90.85 per share

- 2017-06: $94.23 per share

- 2017-07: $103.25 per share

- 2017-08: $108.00 per share

- 2017-09: $120.31 per share

- 2017-10: $113.18 per share

- 2017-11: $117.29 per share

- 2017-12: $113.59 per share

- 2018-01: $124.96 per share

- 2018-02: $103.89 per share

- 2018-03: $100.52 per share

- 2018-04: $95.86 per share

- 2018-05: $97.75 per share

- 2018-06: $94.57 per share

- 2018-07: $89.05 per share

- 2018-08: $86.40 per share

- 2018-09: $81.66 per share

- 2018-10: $89.08 per share

- 2018-11: $82.86 per share

- 2018-12: $76.33 per share

- 2019-01: $88.95 per share

- 2019-02: $90.27 per share

- 2019-03: $92.75 per share

- 2019-04: $113.52 per share

- 2019-05: $114.15 per share

- 2019-06: $118.78 per share

- 2019-07: $131.88 per share

- 2019-08: $131.07 per share

- 2019-09: $132.38 per share

- 2019-10: $157.48 per share

- 2019-11: $160.58 per share

- 2019-12: $147.00 per share

- 2020-01: $135.64 per share

- 2020-02: $119.16 per share

- 2020-03: $81.79 per share

- 2020-04: $110.56 per share

- 2020-05: $120.59 per share

- 2020-06: $151.33 per share

- 2020-07: $229.15 per share

- 2020-08: $248.96 per share

- 2020-09: $227.94 per share

- 2020-10: $229.57 per share

- 2020-11: $289.30 per share

- 2020-12: $292.67 per share

- 2021-01: $318.68 per share

- 2021-02: $373.95 per share

- 2021-03: $390.09 per share

- 2021-04: $384.38 per share

- 2021-05: $351.99 per share

- 2021-06: $343.64 per share

- 2021-07: $377.22 per share

- 2021-08: $331.30 per share

- 2021-09: $317.04 per share

- 2021-10: $319.22 per share

- 2021-11: $291.33 per share

- 2021-12: $296.95 per share

- 2022-01: $292.13 per share

- 2022-02: $340.82 per share

- 2022-03: $300.12 per share

- 2022-04: $283.13 per share

- 2022-05: $304.47 per share

- 2022-06: $274.81 per share

- 2022-07: $265.28 per share

- 2022-08: $265.44 per share

- 2022-09: $214.55 per share

- 2022-10: $198.15 per share

- 2022-11: $239.31 per share

- 2022-12: $204.74 per share

- 2023-01: $263.20 per share

- 2023-02: $255.18 per share

- 2023-03: $228.93 per share

- 2023-04: $220.89 per share

- 2023-05: $233.28 per share

- 2023-06: $304.11 per share

- 2023-07: $310.53 per share

- 2023-08: $308.02 per share

- 2023-09: $295.33 per share

- 2023-10: $242.21 per share

- 2023-11: $266.99 per share

- 2023-12: $329.28 per share

- 2024-01: $294.85 per share

- 2024-02: $299.06 per share

- 2024-03: $300.86 per share

- 2024-04: $254.38 per share

- 2024-05: $253.14 per share

- 2024-06: $252.45 per share

- 2024-07: $276.33 per share

- 2024-08: $301.08 per share

- 2024-09: $317.64 per share

- 2024-10: $332.37 per share

- 2024-11: $386.90 per share

- 2024-12: $357.43 per share

- 2025-01: $376.10 per share

- 2025-02: $344.44 per share

- 2025-03: $293.54 per share

- 2025-04: $292.76 per share

- 2025-05: $316.91 per share

- 2025-06: $337.82 per share

- 2025-07: $288.00 per share

- 2025-08: $336.68 per share

- 2025-09: $316.00 per share

- 2025-10: $314.08 per share

- 2025-11: $318.84 per share

- 2025-12: $332.33 per share

- 2026-01: $323.44 per share

- 2026-02: $279.58 per share

- 2026-03: $249.72 per share

- 2026-04: $290.12 per share

- 2026-05: $290.89 per share

- 2026-06: $290.49 per share

- 2026-07: $385.42 per share

- 2026-08: $367.32 per share

- 2026-09: $291.83 per share

- 2026-10: $295.31 per share

## Annual estimated value (USD per share)

- FY2016: low $105.70 per share, central $143.90 per share, high $168.66 per share

- FY2017: low $126.34 per share, central $171.40 per share, high $200.86 per share

- FY2018: low $152.64 per share, central $218.05 per share, high $256.14 per share

- FY2019: low $167.19 per share, central $238.83 per share, high $280.55 per share

- FY2020: low $168.14 per share, central $240.19 per share, high $282.15 per share

- FY2021: low $260.21 per share, central $371.72 per share, high $436.65 per share

- FY2022: low $485.15 per share, central $693.06 per share, high $814.12 per share

- FY2023: low $559.45 per share, central $794.21 per share, high $930.91 per share

- FY2024: low $650.43 per share, central $929.16 per share, high $1,091.46 per share

- FY2025: low $671.75 per share, central $959.61 per share, high $1,127.23 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1023128/000102312826000015/lad-20251231.htm); period 2025-12-31, filed 2026-02-25.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.