It has been about a month since the last earnings report for Lithia Motors (LAD Quick QuoteLAD - Free Report) . Shares have lost about 16% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Lithia Motors due for a breakout? Well, first let's take a quick look at its latest 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 Q4 Earnings Miss Expectations

Lithia reported fourth-quarter 2025 adjusted earnings per share of $6.74, down from the prior-year quarter’s figure of $7.79. The figure missed the Zacks Consensus Estimate of $8.09. Revenues of $9.2 billion remained flat year over year and missed the Zacks Consensus Estimate of $9.53 billion.

Segmental Performance

New vehicle revenues fell 5.7% year over year to $4.63 billion and missed our estimate of $4.71 billion due to lower-than-expected average selling price (ASP). New vehicle units sold declined 8.1% from the prior-year quarter’s level to 97,424 units but beat our estimate of 95,435 units.

The ASP of new vehicle increased to $48,239 from $47,478 in the prior-year quarter but missed our estimate of $49,401. The gross margin in this segment contracted 70 basis points (bps) to 5.9% while the cost of sales fell 5% year over year to $4.36 billion.

Used vehicle revenues rose 6.7% year over year to $3.2 billion and surpassed our estimate of $2.68 billion due to higher-than-anticipated unit sales and ASP. The used-vehicle retail units sold increased 4.8% from the year-ago quarter’s figure to 99,905 units and beat our expectation of 94,261 units. The ASP of used vehicle was $28,533, up 3.1% year over year. Our estimate was $28,413. The gross margin in the segment decreased 60 bps to 4.7%.

The company’s finance and insurance revenues rose 0.3% to $356.9 million and beat our estimate of $347 million. Revenues from aftersales totaled $1.04 billion, which rose 11.4% year over year and beat our estimate of $972.1 million. Same-store new vehicle revenues fell 6.6% year over year, while same-store used vehicle sales rose 6.1%. Same-store revenues from finance and insurance fell 0.9%, while those from the aftersales unit rose 10.9%.

Financial Tidbits

Cost of sales was up 0.3% year over year. SG&A expenses amounted to $979.3 million, up 8.6% year over year. Adjusted SG&A, as a percentage of gross profit, was 71.4%, up from the prior-year quarter’s 66.3%. Pretax and net profit margins declined from the year-ago levels.

The company announced a dividend of 55 cents to be paid out on March 20, 2026, to its shareholders of record as of March 6, 2026. In fourth-quarter 2025, LAD repurchased nearly 917,427 shares at an average price of $314. Currently, Lithia has approximately $621.6 million shares remaining under its buyback authorization.

Lithia had cash/cash equivalents/restricted cash of $341.8 million as of Dec. 31, 2025, down from $402.2 million as of Dec. 31, 2024. Long-term debt was $7.27 billion as of Dec. 31, 2025, up from $6.12 billion as of Dec. 31, 2024.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a flat trend in estimates review.

VGM Scores

Currently, Lithia Motors has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a score of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of C. 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.