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Lithia Motors (LAD) Stock Moves -0.19%: What You Should Know

Zacks Equity Research
·3 mins read

Lithia Motors (LAD) closed at $266.32 in the latest trading session, marking a -0.19% move from the prior day. This change was narrower than the S&P 500's daily loss of 0.66%. Meanwhile, the Dow lost 0.58%, and the Nasdaq, a tech-heavy index, lost 0.8%.

Prior to today's trading, shares of the auto dealership chain had gained 10.6% over the past month. This has outpaced the Retail-Wholesale sector's gain of 9.09% and the S&P 500's gain of 5.22% in that time.

LAD will be looking to display strength as it nears its next earnings release, which is expected to be October 21, 2020. The company is expected to report EPS of $6.22, up 83.48% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.55 billion, up 6.54% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $16.29 per share and revenue of $12.96 billion, which would represent changes of +38.52% and +2.3%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for LAD. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 17.85% higher within the past month. LAD is currently sporting a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that LAD has a Forward P/E ratio of 16.38 right now. For comparison, its industry has an average Forward P/E of 11.27, which means LAD is trading at a premium to the group.

Meanwhile, LAD's PEG ratio is currently 0.75. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. LAD's industry had an average PEG ratio of 1.54 as of yesterday's close.

The Automotive - Retail and Whole Sales industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 5, putting it in the top 2% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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