Assessing Lithia Motors (LAD) Valuation After Recent Share Price Weakness And Mixed Long Term Returns

Simply Wall St.01-24

AdvertisementLithia Motors stock performance and recent context Lithia Motors (LAD) has been on the radar for many investors after recent trading left the shares around $322.50, with returns over the ...

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This includes a negative 1 year total return alongside positive 3 year and 5 year total returns, which can raise questions about how the current price lines up with the company’s fundamentals.\nSee our...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"LAD":"利西亚车行","LU0274383776.USD":"MANULIFE GF US SMALL CAP EQUITY \"AA\" (USD) INC","BK4561":"索罗斯持仓","BK4214":"汽车零售"},"translate_title":"在近期股价疲软和长期回报好坏参半后评估Lithia Motors(LAD)的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LAD":1.5},"content_text":"AdvertisementLithia Motors stock performance and recent context Lithia Motors (LAD) has been on the radar for many investors after recent trading left the shares around $322.50, with returns over the past month and past 3 months both in negative territory. Those moves sit against a mixed longer term picture. This includes a negative 1 year total return alongside positive 3 year and 5 year total returns, which can raise questions about how the current price lines up with the company’s fundamentals. See our latest analysis for Lithia Motors. Recent trading has leaned weaker, with a 1 month share price return of a 6.63% decline and a 1 year total shareholder return of a 6.03% decline, even though the 3 year total shareholder return of 31.73% remains positive. This points to fading momentum compared with earlier years and suggests the market is currently more cautious about the company’s prospects and risk profile. If Lithia’s moves have you reassessing the auto retail space, this could be a good moment to scan other auto manufacturers for fresh ideas and different risk return profiles. So with Lithia’s shares under pressure recently, yet trading at what some models flag as a 54% intrinsic discount and about 23% below analyst targets, is this a genuine buying opportunity, or is the market already pricing in future growth? Most Popular Narrative: 18.3% Undervalued At $322.50, Lithia Motors is trading below a most-followed fair value estimate of $394.79, which is built using a 12.5% discount rate and detailed long term cash flow assumptions.  Expansion of Lithia's omnichannel/digital retail platform (Driveway and My Driveway portal) is meeting rising consumer expectations for seamless online and offline automotive experiences, improving customer retention, broadening reach, and supporting higher margin F&I products, all expected to elevate net margins and long term customer value.  Read the complete narrative. Want to see what kind of revenue mix and margin profile that quote assumes? The narrative leans on steady growth, improving efficiency, and a future earnings multiple that is not especially high for a scaled retailer. Curious how those pieces combine to reach a fair value meaningfully above today’s price? Result: Fair Value of $394.79 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, this hinges on acquisitions staying accretive and on SG&A coming under control, and both could disappoint if deal pricing stays rich or cost savings lag. Find out about the key risks to this Lithia Motors narrative.  Build Your Own Lithia Motors Narrative If that framework does not sit right with you, or you prefer to test your own assumptions and inputs, you can pull the data, shape your view, and Do it your way in just a few minutes. A great starting point for your Lithia Motors research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision. Looking for more investment ideas? If Lithia has sparked your interest, do not stop here. Use this momentum to broaden your watchlist and spot opportunities that might otherwise slip past you.  Target higher income potential by scanning these 13 dividend stocks with yields > 3% that could suit an approach focused on regular cash returns. Spot possible mispricings by running through these 864 undervalued stocks based on cash flows that some models flag as trading below their estimated cash flow value. Get ahead of emerging themes by reviewing these 18 cryptocurrency and blockchain stocks tied to blockchain infrastructure, payments, and digital asset ecosystems.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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