Lithia Motors LAD reported fourth-quarter 2024 adjusted earnings per share of $7.79, which declined from the prior-year quarter’s $8.24 but surpassed the Zacks Consensus Estimate of $7.01. Higher-than-expected revenues from new vehicle retail and used vehicle wholesale segments led to the beat. The auto retailer clocked revenues of $9.22 billion, which increased 20% year over year and topped the Zacks Consensus Estimate of $8.82 billion.

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Lithia Motors, Inc. Price, Consensus and EPS Surprise

Lithia Motors, Inc. price-consensus-eps-surprise-chart | Lithia Motors, Inc. Quote

Segmental Performance

New vehicle retail revenues increased 18.4% year over year to $4.7 billion and topped our estimate of $4.25 billion due to a higher-than-expected number of units sold and average selling price (ASP). New vehicle units sold rose 20.1% from the prior-year quarter’s levels to 96,760 units, beating our estimate of 90,715 units. The ASP of new vehicle retail decreased to $48,635 from $49,318 reported in the prior-year quarter. Our estimate was $46,849. The gross margin in this segment contracted 140 basis points (bps) to 6.5% amid the high cost of sales, which flared up 20.2% year over year to $4.4 billion.

Used vehicle retail revenues rose 16.4% year over year to $2.63 billion but missed our estimate of $2.69 billion. Lower-than-anticipated number of units sold resulted in underperformance. The used-vehicle retail units sold rose 21.6% from the year-ago quarter to 95,342 units but missed our expectation of 100,655 units. The ASP of used vehicle retail was $27,674, down 4.3% year over year. Our estimate was $26,724. The gross margin in the segment declined 70 bps to 6.1% amid the high cost of sales, which rose 17.2% year over year.

Revenues from used vehicle wholesale rose 40.3% to $340.9 million and were above our estimate of $301.8 million. The company’s finance and insurance revenues rose 7.3% to $355.8 million but fell short of our estimate of $387.9 million. Revenues from aftersales were $973.8 million, which rose 19% year over year but missed our estimate of $983.1 million. Revenues from fleet and others were $207.2 million, which skyrocketed 424.6% year over year but missed our expectation of $214 million.

Same store new vehicle revenues increased 6.3% year over year while same store used vehicle retail sales declined 5.8%. Same store revenues from finance and insurance fell 2%, while that of the aftersales unit rose 3.4%.

Financial Tidbits

Cost of sales jumped 22.4% year over year in fourth-quarter 2024. SG&A expenses were $902.1 million, up 7.8% from $836.8 million reported in the year-ago quarter. SG&A as a percentage of gross profit was 66.3%. Pretax and net profit margins declined from the year-ago levels.

The company declared a quarterly dividend of 53 cents, to be paid on March 21, 2025, to shareholders of record as of March 7, 2025. In 2024, LAD has repurchased nearly 1,230,000 shares at an average price of $283. Currently, Lithia has approximately $454.3 million shares remaining under its buyback authorization.

Lithia had cash/cash equivalents/restricted cash of $402.2 million as of Dec. 31, 2024, down from $941.4 million as of Dec. 31, 2023. Long-term debt was $6.1 billion as of Dec. 31, 2024, up from $5.5 billion as of Dec. 31, 2023.

LAD’s Zacks Rank & Key Picks

Lithia carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited GELYY, Dana Incorporated DAN and Garrett Motion Inc. GTX. While GELYY and DAN sport a Zacks Rank #1 (Strong Buy) each, GTX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for GELYY’s fiscal 2025 sales and earnings indicates year-over-year growth of 66.62% and 149.31%, respectively. EPS estimates for fiscal 2025 and 2026 have improved by 15 cents and 38 cents, respectively, in the past 60 days. 

The Zacks Consensus Estimate for DAN’s 2025 earnings implies year-over-year growth of 79.17%. EPS estimates for 2025 have improved by 20 cents in the past 30 days.

The Zacks Consensus Estimate for GTX’s 2025 sales and earnings indicates year-over-year growth of 2.16% and 17.92%, respectively. EPS estimates for 2025 have improved by a penny in the past 30 days.

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