In the latest trading session, Lithia Motors (LAD) closed at $281.01, marking a -0.98% move from the previous day. This move lagged the S&P 500’s daily gain of 0.8%. At the same time, the Dow added 0.43%, and the tech-heavy Nasdaq gained 0.5%.
Investors will be hoping for strength from LAD as it approaches its next earnings release. The company is expected to report EPS of $6.20, up 82.89% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.55 billion, up 6.54% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $16.66 per share and revenue of $12.77 billion. These totals would mark changes of +41.67% and +0.73%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for LAD. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 10.38% higher within the past month. LAD currently has a Zacks Rank of #1 (Strong Buy).
Valuation is also important, so investors should note that LAD has a Forward P/E ratio of 17.03 right now. For comparison, its industry has an average Forward P/E of 13.01, which means LAD is trading at a premium