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 to the group.
Also, we should mention that LAD has a PEG ratio of 0.78. 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. The Automotive – Retail and Whole Sales was holding an average PEG ratio of 1.61 at yesterday’s closing price.
The Automotive – Retail and Whole Sales industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 2, which puts it in the top 1% 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 Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Click to get this free report
Lithia Motors, Inc. (LAD): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.