Lithia Motors Inc. Common Stock (LAD)

FairStock Score: 58/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I am a value investor first, so I start with the numbers. In fiscal Q2 2026, the quarter ended 2026-06-30, Lithia reported $9.8B of revenue, $260.0M of net income, and $11.54 of diluted EPS, a net margin of 2.66%. For FY2025, ended 2025-12-31, revenue was $37.6B, net income $819.6M, and diluted EPS $32.32. FY2024, ended 2024-12-31, had $36.2B of revenue, $796.7M of net income, and $29.45 of diluted EPS. FY2023, ended 2023-12-31, had $31.0B of revenue, $1.0B of net income, and $36.29 of diluted EPS. So revenue grew over time, but profits and per-share earnings have not kept pace; margins are thin and cyclical. At the 2026-10-13 close, FairStock calculates a P/E of 9.50, P/B of 0.99, and a Graham Number of $444.67, implying a 35.51% margin of safety. FairStock's computed Lynch category is ASSET PLAY because it trades at 0.99 times book value. That looks statistically cheap. But the same data show trailing free cash flow of -$504.3M, an FCF yield of -8.0%, debt-to-equity of 2.58, an Altman Z-Score of 0.95, ROCE of 3.92%, and a PEG of 6.25. A cheap asset with negative cash flow and high leverage is not a wide-moat compounder. I would want evidence that cash generation and returns on capital improve before trusting the discount.

In plain English: Lithia Motors sells new and used cars, arranges financing, and services vehicles through dealerships in the United States, United Kingdom, and Canada. The business is profitable but thin-margined, carries a lot of debt, and has been burning cash over the past year. At the recent price, the stock looks inexpensive compared with its earnings and accounting value, but weak cash flow and modest growth mean it may not be a clear bargain.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer