Lithia Motors Reports Preliminary Q2 Results, Earnings Rise Y/Y

Lithia Motors, Inc.LAD reported a strong preliminary financial result for its second quarter ended June 30, 2025. Driven by its solid core operations and differentiated design, Lithia significantly outpaced the industry in the quarter. It expects its earnings per diluted share between $9.70 and $10.00 in the referred quarter. This depicts a rise of 23-27% from the previous year.

Lithia’s integrated business line, including diverse revenue streams, demonstrated earnings growth and future scalability. Its top line is expected to be between $9.4 billion and $9.6 billion, powered by an impressive 3.5% to 4.0% same-store total revenue growth. A major contributor to the earnings was the company’s financing operations, which stood out with year-on-year growth of 110-155%, amounting to income between $15 million and $18 million.

The results signal toward an effective strategy that is driving LAD’s momentum, while other peers in the industry are showing flat results. Its diversified lines have been integrated well to create meaningful synergy. Driveway, GreenCars, and Driveway Finance Corporation together enable growth across various customer channels.

From the company’s capital allocation aspect, LAD has repurchased 3% of the shares outstanding this year while clocking 1.5% repurchases in this quarter, underlining its disciplined and long-term value creation goal. Benefitting from its product mix of varied types, the company is also on its path of buyout binge, acquiring steady revenues through acquisitions. So far in 2025, the company has acquired $400 million in annualized revenues, with the latest one being the acquisition of two Mercedes-Benz dealerships in Tennessee and Mississippi.

Lithia is no exception to being caught up in the tariff crossfires. It is facing pressures on margins and will eventually pass on the rising prices to customers, discouraging volumes. It could also impact Lithia’s aftersales business as parts may become costlier.

Shares of Lithia have gained 25.3% over the past year compared with the industry’s 15.5% growth.

LAD’s Zacks Rank & Key Picks

LAD currently carries a Zacks Rank #4 (Sell).

A few better-ranked stocks in the auto space are Ferrari N.V. RACE, Rivian Automotive RIVN and Westport Fuel Systems WPRT. While RACE sports a Zacks Rank #1 (Strong Buy) at present, RIVN and WPRT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for RACE’s current-year earnings is pegged at $9.89 per share, indicating a 7.97% year-over-year rise. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 10.75%. RACE’s shares have gained 15.8% in the past year.

The Zacks Consensus Estimate for RIVN’s 2025 loss is pegged at $2.49 per share, indicating an improvement of 38.37% from year-ago levels. The company’s earnings beat the consensus estimate in two of the trailing four quarters, while missing it in the rest with an average surprise of 10.81%.

The Zacks Consensus Estimate for WPRT’s 2025 loss is pegged at $1.27 per share, indicating an improvement of 40.93% from year-ago levels. The company’s earnings beat the consensus estimate in three of the trailing four quarters.

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This article originally published on Zacks Investment Research (zacks.com).

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