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Lithia Motors (LAD) Dips More Than Broader Markets: What You Should Know

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Lithia Motors (LAD - Free Report) closed the most recent trading day at $280.06, moving -0.87% from the previous trading session. This change lagged the S&P 500's daily loss of 0.54%. Meanwhile, the Dow lost 0.02%, and the Nasdaq, a tech-heavy index, lost 0.12%.

Prior to today's trading, shares of the auto dealership chain had lost 3.16% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 12.57% and the S&P 500's loss of 7.87% in that time.

Lithia Motors will be looking to display strength as it nears its next earnings release, which is expected to be February 9, 2022. On that day, Lithia Motors is projected to report earnings of $9.99 per share, which would represent year-over-year growth of 82.97%. Our most recent consensus estimate is calling for quarterly revenue of $6.32 billion, up 60.29% from the year-ago period.

Investors should also note any recent changes to analyst estimates for Lithia Motors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. Over the past month, the Zacks Consensus EPS estimate has moved 1.35% higher. Lithia Motors is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, Lithia Motors currently has a Forward P/E ratio of 7.54. For comparison, its industry has an average Forward P/E of 7.32, which means Lithia Motors is trading at a premium to the group.

Investors should also note that LAD has a PEG ratio of 0.35 right now. 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 0.35 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 8, putting it in the top 4% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow LAD in the coming trading sessions, be sure to utilize Zacks.com.


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