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Is Lithia Motors (LAD) a Great Value Stock Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Lithia Motors (LAD - Free Report) is a stock many investors are watching right now. LAD is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Investors will also notice that LAD has a PEG ratio of 0.47. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LAD's industry has an average PEG of 0.48 right now. Over the past 52 weeks, LAD's PEG has been as high as 0.89 and as low as 0.46, with a median of 0.67.

Investors should also recognize that LAD has a P/B ratio of 2.28. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 2.31. Over the past 12 months, LAD's P/B has been as high as 4.83 and as low as 2.28, with a median of 3.57.

These are just a handful of the figures considered in Lithia Motors's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that LAD is an impressive value stock right now.


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