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Lithia Motors (LAD) Gains But Lags Market: What You Should Know

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Lithia Motors (LAD - Free Report) closed the most recent trading day at $318.07, moving +0.87% from the previous trading session. This move lagged the S&P 500's daily gain of 1.5%. Elsewhere, the Dow gained 0.28%, while the tech-heavy Nasdaq added 0.52%.

Heading into today, shares of the auto dealership chain had gained 11.61% over the past month, outpacing the Retail-Wholesale sector's loss of 3.04% and the S&P 500's loss of 3.75% in that time.

Investors will be hoping for strength from Lithia Motors as it approaches its next earnings release. In that report, analysts expect Lithia Motors to post earnings of $10.22 per share. This would mark year-over-year growth of 73.51%. Our most recent consensus estimate is calling for quarterly revenue of $6.39 billion, up 47.04% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $38.34 per share and revenue of $26.23 billion. These totals would mark changes of -4.22% and +14.88%, respectively, from last year.

Any recent changes to analyst estimates for Lithia Motors should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 2.36% higher. Lithia Motors currently has a Zacks Rank of #2 (Buy).

In terms of valuation, Lithia Motors is currently trading at a Forward P/E ratio of 8.23. For comparison, its industry has an average Forward P/E of 6.53, which means Lithia Motors is trading at a premium to the group.

We can also see that LAD currently has a PEG ratio of 0.38. 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 0.38 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 7, putting it in the top 3% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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