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Key Predictions as Lithia (LAD) Gears Up for Q2 Earnings
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Lithia Motors (LAD - Free Report) is slated to release second-quarter 2022 results on Jul 20, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $11.85 per share and $7.49 billion, respectively.
The Zacks Consensus Estimate for second-quarter earnings per share has remained stable over the past 30 days. The metric indicates a significant year-over-year jump of 6.6%. Further, the Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 24.7%.
The auto retailer came up with better-than-expected results in the last reported quarter on the back of higher-than-expected revenues from new vehicle, used vehicle (retail and wholesale), and fleet and others segments. In fact, Lithia surpassed earnings estimates in the last four quarters, with the average being 30.5%. This is depicted in the graph below:
Our proven model doesn’t conclusively predict an earnings beat for Lithia this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%.This is because the Most Accurate Estimate for earnings is in line with the Zacks Consensus Estimate.
A spree of acquisitions had brought Lithia's total expected annualized revenue acquired to $7 billion in 2021. Since the beginning of 2022 through June-end, the firm’s total expected annualized revenues acquired reached over $2.1 billion. These strategic buyouts are likely to have enhanced Lithia’s product portfolio, market share and revenues. Also, we expect Lithia’s Driveway e-commerce program to have significantly buoyed the firm’s second-quarter revenues.
The Zacks Consensus Estimate for Lithia’s revenues in the used vehicle business is $2,945 million, indicating a significant increase from $2,022 million recorded in the year-ago period. The metric also implies sequential growth of 12.4%. The consensus mark for revenues from the new vehicle segment stands at $3,730 million, suggesting 18.5% and 21.8% year-over-year and sequential growth, respectively.
The Zacks Consensus Estimate for revenues from Finance & Insurance is pegged at $378 million, implying an increase from $313 million and $270 million recorded in the last reported quarter and the year-ago period, respectively.
Nonetheless, the projected decline in gross margins for used and new vehicle retail raises concerns about the upcoming results. The consensus mark for second-quarter 2022 gross margins in the used vehicle retail segment is pegged at 9.7%, signaling a drop from 10% and 13.4% recorded in the prior reported quarter and the corresponding period of 2021, respectively. The Zacks Consensus Estimate for gross margin in the used vehicle retail segment is 12.61%, implying a contraction from 13.10% recorded in the first quarter of 2022.
Stocks With the Favorable Combination
Here are a couple of players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Driven Brand Holdings (DRVN - Free Report) has an Earnings ESP of +14.45% and a Zacks Rank #3. The stock is expected to report second-quarter 2022 earnings on Jul 27.
The Zacks Consensus Estimate for Driven’s to-be-reported quarter’s earnings and revenues is pegged at 29 cents per share and $486 million, respectively. Encouragingly, DRVN surpassed earnings estimates in the last four quarters, with the average being 30.1%.
Allison Transmission (ALSN - Free Report) has an Earnings ESP of +3.87% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Aug 3.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $1.33 per share and $695 million, respectively. Encouragingly, ALSN surpassed earnings estimates in the last four quarters, with the average being 11.7%.
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Key Predictions as Lithia (LAD) Gears Up for Q2 Earnings
Lithia Motors (LAD - Free Report) is slated to release second-quarter 2022 results on Jul 20, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and revenues is pegged at $11.85 per share and $7.49 billion, respectively.
The Zacks Consensus Estimate for second-quarter earnings per share has remained stable over the past 30 days. The metric indicates a significant year-over-year jump of 6.6%. Further, the Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 24.7%.
The auto retailer came up with better-than-expected results in the last reported quarter on the back of higher-than-expected revenues from new vehicle, used vehicle (retail and wholesale), and fleet and others segments. In fact, Lithia surpassed earnings estimates in the last four quarters, with the average being 30.5%. This is depicted in the graph below:
Lithia Motors, Inc. Price and EPS Surprise
Lithia Motors, Inc. price-eps-surprise | Lithia Motors, Inc. Quote
Earnings Whispers
Our proven model doesn’t conclusively predict an earnings beat for Lithia this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%.This is because the Most Accurate Estimate for earnings is in line with the Zacks Consensus Estimate.
Zacks Rank: Lithia currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Things to Note
A spree of acquisitions had brought Lithia's total expected annualized revenue acquired to $7 billion in 2021. Since the beginning of 2022 through June-end, the firm’s total expected annualized revenues acquired reached over $2.1 billion. These strategic buyouts are likely to have enhanced Lithia’s product portfolio, market share and revenues. Also, we expect Lithia’s Driveway e-commerce program to have significantly buoyed the firm’s second-quarter revenues.
The Zacks Consensus Estimate for Lithia’s revenues in the used vehicle business is $2,945 million, indicating a significant increase from $2,022 million recorded in the year-ago period. The metric also implies sequential growth of 12.4%. The consensus mark for revenues from the new vehicle segment stands at $3,730 million, suggesting 18.5% and 21.8% year-over-year and sequential growth, respectively.
The Zacks Consensus Estimate for revenues from Finance & Insurance is pegged at $378 million, implying an increase from $313 million and $270 million recorded in the last reported quarter and the year-ago period, respectively.
Nonetheless, the projected decline in gross margins for used and new vehicle retail raises concerns about the upcoming results. The consensus mark for second-quarter 2022 gross margins in the used vehicle retail segment is pegged at 9.7%, signaling a drop from 10% and 13.4% recorded in the prior reported quarter and the corresponding period of 2021, respectively. The Zacks Consensus Estimate for gross margin in the used vehicle retail segment is 12.61%, implying a contraction from 13.10% recorded in the first quarter of 2022.
Stocks With the Favorable Combination
Here are a couple of players from the auto space, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
Driven Brand Holdings (DRVN - Free Report) has an Earnings ESP of +14.45% and a Zacks Rank #3. The stock is expected to report second-quarter 2022 earnings on Jul 27.
The Zacks Consensus Estimate for Driven’s to-be-reported quarter’s earnings and revenues is pegged at 29 cents per share and $486 million, respectively. Encouragingly, DRVN surpassed earnings estimates in the last four quarters, with the average being 30.1%.
Allison Transmission (ALSN - Free Report) has an Earnings ESP of +3.87% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Aug 3.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $1.33 per share and $695 million, respectively. Encouragingly, ALSN surpassed earnings estimates in the last four quarters, with the average being 11.7%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.