LAD

Lithia Motors reported Q3 2026 earnings with adjusted diluted EPS of $10.34 on $10 billion revenue. The company is leveraging AI-driven dynamic pricing to boost used vehicle profitability (13% YoY growth), expanding its captive financing arm Driveway Finance Corporation ($32M income, 22% receivables growth), and implementing AI automation to reduce SG&A expenses toward a 60% target. Management maintains disciplined capital allocation with net leverage at 3.1x, targeting selective acquisitions above 15% hurdle rates.

Lithia Motors reported Q3 2026 earnings of $10.34 per share, beating consensus estimates of $9.7, with revenues of $9.95 billion exceeding expectations by 2.40%. However, the stock has underperformed the S&P 500 by 24.2% year-to-date and carries a Zacks Rank #4 (Sell) rating due to unfavorable estimate revisions. The automotive retail industry ranks in the bottom 1% of Zacks industries, presenting significant headwinds for the sector.

Lithia Motors is expected to report Q3 2026 earnings of $9.73 per share (up 2.4% YoY) with revenues of $9.69 billion (up 0.2% YoY) on October 21. While the company has a positive Earnings ESP of +0.56% and a strong history of beating estimates (3 out of 4 quarters), its Zacks Rank #4 rating makes it difficult to predict an earnings beat with confidence. The combination of these factors suggests Lithia Motors is not a compelling earnings-beat candidate.

Lithia Motors (LAD) is highlighted as an attractive value stock with a Zacks Rank #2 (Buy) rating and an 'A' Value grade. The company demonstrates favorable valuation metrics including a PEG ratio of 0.65, P/B ratio of 1.22, P/S ratio of 0.18, and P/CF ratio of 6.76, all comparing favorably to industry averages. Combined with strong earnings growth prospects, LAD appears undervalued in the current market.