Lithia Motors, Inc. (LAD) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+16.1%

$357.44

vs $307.87 price

Levered DCF

-$487.25

After debt service

Piotroski score

3 / 9

Weak

Altman Z-score

2.09

Grey zone

Rating

B+

Overall 3 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	10.26×	12.03×	9.05×	4.62×	8.07×	14.81×	12.56×	7.01×
P/B	1.27×	1.45×	1.46×	1.11×	1.85×	2.62×	2.32×	1.56×
P/S	0.22×	0.27×	0.29×	0.2×	0.37×	0.53×	0.27×	0.16×
EV / EBITDA	9.88×	10.23×	9.01×	6.18×	7.51×	12.53×	11.4×	9.93×
Gross margin	15.2%	15.4%	16.8%	18.3%	18.7%	16.9%	15.4%	15.0%
Operating margin	3.8%	4.4%	5.5%	6.9%	7.3%	5.3%	3.9%	3.8%
Net margin	2.2%	2.2%	3.2%	4.4%	4.6%	3.6%	2.1%	2.2%
Current ratio	1.17×	1.19×	1.41×	1.46×	1.38×	1.35×	1.2×	1.2×
Debt / equity	2.22×	2.08×	1.82×	1.54×	1.07×	1.57×	2.57×	2.87×
Interest coverage	1.83×	2.94×	4.81×	11.56×	13.23×	6.53×	3.71×	3.78×
Dividend yield	0.7%	0.6%	0.6%	0.8%	0.5%	0.4%	0.8%	1.5%
Payout ratio	6.7%	7.0%	5.3%	3.6%	3.7%	6.2%	10.2%	10.4%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	12.4%	12.1%	16.1%	24.0%	22.9%	17.7%	18.5%	22.2%
Return on invested capital	4.5%	5.5%	6.8%	10.1%	11.7%	6.9%	6.4%	7.1%
Return on assets	3.3%	3.5%	5.1%	8.3%	9.5%	6.0%	4.5%	4.9%
Free cash flow yield	0.1%	0.8%	-7.8%	-15.8%	18.0%	8.3%	11.7%	19.4%
Earnings yield	9.7%	8.3%	11.1%	21.7%	12.4%	6.8%	8.0%	14.3%
Enterprise value	$22.8B	$23.1B	$19.4B	$13.5B	$13.3B	$11B	$7.1B	$5.3B
Net debt / EBITDA	6.23×	5.96×	4.81×	3.54×	2.69×	4.58×	5.93×	6.42×
Cash conversion cycle (days)	81	79	76	60	53	95	93	98