It has been about a month since the last earnings report for Lithia Motors (LAD). Shares have added about 18.9% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Lithia Motors due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Lithia Motors, Inc. before we dive into how investors and analysts have reacted as of late.
Lithia Q2 Earnings Beat Estimates
Lithia reported second-quarter 2025 adjusted earnings per share of $10.24, which improved from the prior-year quarter’s $7.87 and beat the Zacks Consensus Estimate of $9.78. The auto retailer clocked revenues of $9.58 billion, which increased 3.7% year over year and also surpassed the Zacks Consensus Estimate of $9.53 billion.
Segmental Performance
New vehicle retail revenues increased 2.2% year over year to $4.5 billion but lagged our estimate of $4.75 billion. New vehicle units sold rose 1.8% from the prior-year quarter’s levels to 94,144 units, missing our estimate of 100,205 units. The ASP of new vehicle retail increased to $47,782 from $47,603 reported in the prior-year quarter. Our estimate was $47,431. The gross margin in this segment contracted 60 basis points (bps) to 6.7% amid the high cost of sales, which rose 2.8% year over year to $4.2 billion.
Used vehicle retail revenues rose 3.6% year over year to $3.1 billion and surpassed our estimate of $2.9 billion, courtesy of higher-than-anticipated ASP. The used-vehicle retail units sold declined 0.2% from the year-ago quarter to 109,053 units and lagged our expectation of 111,328 units. The ASP of used vehicle retail was $28,379, up 3.8% year over year. Our estimate was $26,135. The gross margin in the segment increased 20 bps to 6.7%.
Revenues from used vehicle wholesale jumped 32.3% to $383 million and outpaced our estimate of $340 million. The company’s finance and insurance revenues rose 3.6% to $373.8 million but fell short of our estimate of $398.9 million. Revenues from aftersales were $1.02 billion, which rose 7.6% year over year and surpassed our estimate of $985 million. Revenues from fleet and others were $209.5 million, which contracted 13.1% year over year and lagged our expectation of $244 million.
Same-store new vehicle revenues increased 2% year over year, while same-store used vehicle retail sales rose 6.5%. Same-store revenues from finance and insurance rose 4.5%, while those of the aftersales unit rose 8.5%.
Financial Tidbits
Cost of sales were up 3.7% year over year in second-quarter 2025. SG&A expenses were $1.01 billion. Adjusted SG&A, as a percentage of gross profit, was 67.7%, decreasing from the prior-year quarter’s 67.9%. Pretax and net profit margins improved from the year-ago levels.
The company announced a dividend of 55 cents to be paid out on Aug. 22, 2025, to its shareholders of record as of Aug. 8, 2025. In second-quarter 2025, LAD repurchased nearly 387,000 shares at an average price of $306. Currently, Lithia has approximately $568.8 million shares remaining under its buyback authorization.
Lithia had cash/cash equivalents/restricted cash of $404.4 million as of June 30, 2025, up from $402.2 million as of Dec. 31, 2024. Long-term debt was $6.7 billion as of June 30, 2025, up from $6.1 billion as of Dec. 31, 2024.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a flat trend in fresh estimates.
VGM Scores
At this time, Lithia Motors has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Lithia Motors has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Lithia Motors belongs to the Zacks Automotive - Retail and Whole Sales industry. Another stock from the same industry, AutoNation (AN), has gained 15.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2025.
AutoNation reported revenues of $6.97 billion in the last reported quarter, representing a year-over-year change of +7.6%. EPS of $5.46 for the same period compares with $3.99 a year ago.
AutoNation is expected to post earnings of $4.91 per share for the current quarter, representing a year-over-year change of +22.1%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.5%.
AutoNation has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Lithia Motors, Inc. (LAD): Free Stock Analysis Report AutoNation, Inc. (AN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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