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On February 12, 2026, Lithia’s CEO said the company currently won’t pursue U.S. distribution of Chinese-brand vehicles, citing cost, return on investment and U.S. franchise-structure constraints rather than political obstacles. The comment followed discussion of differing dealership economics between the U.S. and the U.K. and noted Lithia’s existing partnerships in the U.K. market.
Technical Analysis
ADX at 19.76 indicates no established trend; directional readings show bearish bias as DI- equals 23.93 and trends higher while DI+ equals 16.47 and trends lower, which signals sellers currently outweigh buyers and reduces the likelihood of sustained bullish continuation relative to the stock’s present valuation.
MACD sits at -8.59 and declines below its signal line (-4.69), a bearish momentum configuration consistent with downward price pressure; the negative and falling MACD reduces the probability that short-term strength will persist absent a clear cross above the signal.
MRO reads -12.34 (negative), indicating price sits below the model target and therefore implies potential upside toward that target if momentum shifts; however, the MRO trend declines, so any upward pressure would require a reversal in momentum before meaningful catch-up occurs.
RSI at 44.64 and falling remains below neutral and above oversold levels, which aligns with consolidation or continued distribution rather than immediate capitulation; volatility metrics remain moderate given 42- and 52-week volatility near 2% and 42-day beta at 1.33.
Price sits below key moving averages: close at $284.97 under the 20-day ($315.12), 50-day ($329.90) and 200-day ($320.53) averages, reinforcing a bearish technical posture. Price trades beneath the 1x Bollinger lower band ($293.93), indicating a downside excursion beyond recent standard-deviation bands and increasing the chance of either a mean-reversion bounce or continued selling if momentum stays negative.
Fundamental Analysis
Revenue totaled $9,675,800,000 for the period ending 2025-09-30, with reported revenue growth of 0.97% and a year-over-year revenue change shown as -9.27%. Net income reached $217,100,000 and EBIT equaled $479,000,000, producing an EBIT margin of 4.95%, a QoQ margin lift of 0.12 percentage points and a YoY margin decline of 5.01 percentage points. The EBIT margin sits below the industry peer mean of 13.37% and below the industry peer median of 13.71%.
Adjusted EPS came in at $6.74 versus an estimate of $8.10, an EPS miss of $1.36 or a -16.79% surprise; the company reported this result on 2026-02-11 as part of its periodic disclosure. Operating margin stands at 3.76%, while operating margin YoY shows a steep decline of 27.81% from the prior comparable period, reflecting compression in new-vehicle margins and pressure across the vehicle mix.
Cash flow metrics show stress: free cash flow equals -$207,300,000 and free cash flow yield stands at -2.67%, while operating cash flow was negative at -$98,400,000. Cash on hand totals $417.1 million and end-period cash flow reached $468.6 million, but net debt remains elevated at $13,721,400,000 producing a debt-to-assets ratio of 60.04% and debt-to-equity of 217.50%, with interest coverage near 2.43x.
Valuation multiples: PE ratio equals 33.50x with forward PE about 33.86x; price-to-book registers roughly 1.15x and price-to-sales about 0.80x. The price target mean among analyst estimates stands at $304.93 versus a close of $284.97. WMDST values the stock as over-valued based on its internal framework and the current combination of margins, cash flow, and leverage.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-09-30 |
| REPORT DATE: | 2026-02-11 |
| NEXT REPORT DATE: | 2026-05-13 |
| CASH FLOW | Begin Period Cash Flow | $ 455.6 M |
| Operating Cash Flow | $ -98.40 M | |
| Capital Expenditures | $ -108.90 M | |
| Change In Working Capital | $ -478.80 M | |
| Dividends Paid | $ -13.90 M | |
| Cash Flow Delta | $ 13.0 M | |
| End Period Cash Flow | $ 468.6 M | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 9.7 B | |
| Forward Revenue | $ 3.0 B | |
| COSTS | ||
| Cost Of Revenue | $ 8.2 B | |
| Depreciation | $ 102.5 M | |
| Depreciation and Amortization | $ 102.5 M | |
| Research and Development | — | |
| Total Operating Expenses | $ 9.3 B | |
| PROFITABILITY | ||
| Gross Profit | $ 1.5 B | |
| EBITDA | $ 581.5 M | |
| EBIT | $ 479.0 M | |
| Operating Income | $ 364.0 M | |
| Interest Income | $ 128.3 M | |
| Interest Expense | $ 196.8 M | |
| Net Interest Income | $ -68.50 M | |
| Income Before Tax | $ 282.2 M | |
| Tax Provision | $ 63.6 M | |
| Tax Rate | 22.537 % | |
| Net Income | $ 217.1 M | |
| Net Income From Continuing Operations | $ 218.6 M | |
| EARNINGS | ||
| EPS Estimate | $ 8.10 | |
| EPS Actual | $ 6.74 | |
| EPS Difference | $ -1.36 | |
| EPS Surprise | -16.79 % | |
| Forward EPS | $ 10.89 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 24.5 B | |
| Intangible Assets | $ 5.2 B | |
| Net Tangible Assets | $ 1.6 B | |
| Total Current Assets | $ 7.9 B | |
| Cash and Short-Term Investments | $ 417.1 M | |
| Cash | $ 417.1 M | |
| Net Receivables | $ 166.2 M | |
| Inventory | $ 5.9 B | |
| Long-Term Investments | $ 1.4 B | |
| LIABILITIES | ||
| Accounts Payable | $ 336.7 M | |
| Short-Term Debt | $ 5.0 B | |
| Total Current Liabilities | $ 6.5 B | |
| Net Debt | $ 13.7 B | |
| Total Debt | $ 14.7 B | |
| Total Liabilities | $ 17.7 B | |
| EQUITY | ||
| Total Equity | $ 6.8 B | |
| Retained Earnings | $ 6.4 B | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 277.41 | |
| Shares Outstanding | 24.400 M | |
| Revenue Per-Share | $ 396.55 | |
| VALUATION | Market Capitalization | $ 7.8 B |
| Enterprise Value | $ 22.1 B | |
| Enterprise Multiple | 37.955 | |
| Enterprise Multiple QoQ | -0.94 % | |
| Enterprise Multiple YoY | 67.506 % | |
| Enterprise Multiple IPRWA | high: 174.518 mean: 60.529 median: 57.079 LAD: 37.955 low: -68.779 |
|
| EV/R | 2.281 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 3.622 | |
| Asset To Liability | 1.383 | |
| Debt To Capital | 0.685 | |
| Debt To Assets | 0.6 | |
| Debt To Assets QoQ | 1.446 % | |
| Debt To Assets YoY | 166.38 % | |
| Debt To Assets IPRWA | high: 1.164 LAD: 0.6 median: 0.516 mean: 0.491 low: 0.086 |
|
| Debt To Equity | 2.175 | |
| Debt To Equity QoQ | 6.262 % | |
| Debt To Equity YoY | 173.981 % | |
| Debt To Equity IPRWA | high: 5.043 LAD: 2.175 mean: 1.52 median: 1.293 low: -2.674 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 1.147 | |
| Price To Book QoQ | -2.753 % | |
| Price To Book YoY | -2.63 % | |
| Price To Book IPRWA | high: 8.446 mean: 3.359 median: 2.463 LAD: 1.147 low: -5.158 |
|
| Price To Earnings (P/E) | 33.503 | |
| Price To Earnings QoQ | 5.919 % | |
| Price To Earnings YoY | -5.987 % | |
| Price To Earnings IPRWA | high: 279.007 median: 82.476 mean: 82.299 LAD: 33.503 low: -89.111 |
|
| PE/G Ratio | -4.636 | |
| Price To Sales (P/S) | 0.803 | |
| Price To Sales QoQ | -6.688 % | |
| Price To Sales YoY | -4.903 % | |
| Price To Sales IPRWA | high: 18.293 mean: 8.866 median: 8.085 LAD: 0.803 low: 0.22 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 33.86 | |
| Forward PE/G | -4.685 | |
| Forward P/S | 2.986 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | 1.133 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.398 | |
| Asset Turnover Ratio QoQ | -1.186 % | |
| Asset Turnover Ratio YoY | 0.161 % | |
| Asset Turnover Ratio IPRWA | high: 0.665 LAD: 0.398 mean: 0.331 median: 0.329 low: 0.084 |
|
| Receivables Turnover | 59.672 | |
| Receivables Turnover Ratio QoQ | -1.024 % | |
| Receivables Turnover Ratio YoY | 18.91 % | |
| Receivables Turnover Ratio IPRWA | high: 104.964 LAD: 59.672 mean: 14.417 median: 9.92 low: 0.289 |
|
| Inventory Turnover | 1.368 | |
| Inventory Turnover Ratio QoQ | -0.246 % | |
| Inventory Turnover Ratio YoY | 8.361 % | |
| Inventory Turnover Ratio IPRWA | high: 2.29 LAD: 1.368 mean: 0.785 median: 0.702 low: 0.197 |
|
| Days Sales Outstanding (DSO) | 1.529 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | 65.17 | |
| Cash Conversion Cycle Days QoQ | -2.163 % | |
| Cash Conversion Cycle Days YoY | -6.848 % | |
| Cash Conversion Cycle Days IPRWA | high: 351.932 LAD: 65.17 median: 41.536 mean: 23.418 low: -107.374 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 6.912 | |
| CapEx To Revenue | -0.011 | |
| CapEx To Depreciation | -1.062 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 15.9 B | |
| Net Invested Capital | $ 20.9 B | |
| Invested Capital | $ 20.9 B | |
| Net Tangible Assets | $ 1.6 B | |
| Net Working Capital | $ 1.4 B | |
| LIQUIDITY | ||
| Cash Ratio | 0.064 | |
| Current Ratio | 1.215 | |
| Current Ratio QoQ | -0.391 % | |
| Current Ratio YoY | 2.54 % | |
| Current Ratio IPRWA | high: 3.669 LAD: 1.215 mean: 1.205 median: 1.064 low: 0.071 |
|
| Quick Ratio | 0.304 | |
| Quick Ratio QoQ | 5.346 % | |
| Quick Ratio YoY | 13.013 % | |
| Quick Ratio IPRWA | high: 2.26 mean: 0.403 LAD: 0.304 median: 0.245 low: 0.054 |
|
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 25.317 | |
| Cost Of Debt | 1.051 % | |
| Interest Coverage Ratio | 2.434 | |
| Interest Coverage Ratio QoQ | -37.482 % | |
| Interest Coverage Ratio YoY | -2.592 % | |
| Interest Coverage Ratio IPRWA | high: 52.0 mean: 13.431 median: 8.634 LAD: 2.434 low: -17.385 |
|
| Operating Cash Flow Ratio | 0.061 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 3.99 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | 15.619 | |
| Dividend Payout Ratio | 0.064 | |
| Dividend Rate | $ 0.57 | |
| Dividend Yield | 0.002 | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 1.482 % | |
| Revenue Growth | 0.968 % | |
| Revenue Growth QoQ | -78.045 % | |
| Revenue Growth YoY | -927.35 % | |
| Revenue Growth IPRWA | high: 45.625 % mean: 9.919 % median: 3.992 % LAD: 0.968 % low: -16.233 % |
|
| Earnings Growth | -7.227 % | |
| Earnings Growth QoQ | -121.457 % | |
| Earnings Growth YoY | -267.292 % | |
| Earnings Growth IPRWA | high: 285.714 % median: 8.974 % mean: 1.709 % LAD: -7.227 % low: -300.0 % |
|
| MARGINS | ||
| Gross Margin | 15.151 % | |
| Gross Margin QoQ | -2.233 % | |
| Gross Margin YoY | -2.327 % | |
| Gross Margin IPRWA | high: 97.069 % median: 44.682 % mean: 41.775 % LAD: 15.151 % low: 10.882 % |
|
| EBIT Margin | 4.95 % | |
| EBIT Margin QoQ | 0.121 % | |
| EBIT Margin YoY | -5.009 % | |
| EBIT Margin IPRWA | high: 20.894 % median: 13.714 % mean: 13.369 % LAD: 4.95 % low: -8.354 % |
|
| Return On Sales (ROS) | 3.762 % | |
| Return On Sales QoQ | -11.022 % | |
| Return On Sales YoY | -27.807 % | |
| Return On Sales IPRWA | high: 20.742 % median: 14.013 % mean: 13.232 % LAD: 3.762 % low: -8.039 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ -207.30 M | |
| Free Cash Flow Yield | -2.669 % | |
| Free Cash Flow Yield QoQ | 210.71 % | |
| Free Cash Flow Yield YoY | -232.194 % | |
| Free Cash Flow Yield IPRWA | high: 10.42 % mean: 1.127 % median: 0.763 % LAD: -2.669 % low: -13.337 % |
|
| Free Cash Growth | 192.797 % | |
| Free Cash Growth QoQ | -250.693 % | |
| Free Cash Growth YoY | -223.265 % | |
| Free Cash Growth IPRWA | high: 535.911 % LAD: 192.797 % median: -33.254 % mean: -60.423 % low: -670.853 % |
|
| Free Cash To Net Income | -0.955 | |
| Cash Flow Margin | 4.103 % | |
| Cash Flow To Earnings | 1.829 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.02 | |
| Return On Assets (ROA) | 0.892 % | |
| Return On Assets QoQ | -17.023 % | |
| Return On Assets YoY | -0.889 % | |
| Return On Assets IPRWA | high: 4.767 % median: 3.611 % mean: 3.051 % LAD: 0.892 % low: -2.099 % |
|
| Return On Capital Employed (ROCE) | 2.662 % | |
| Return On Equity (ROE) | 0.032 | |
| Return On Equity QoQ | -12.52 % | |
| Return On Equity YoY | 1.295 % | |
| Return On Equity IPRWA | high: 0.238 mean: 0.067 median: 0.063 LAD: 0.032 low: -0.071 |
|
| DuPont ROE | 3.157 % | |
| Return On Invested Capital (ROIC) | 1.775 % | |
| Return On Invested Capital QoQ | 5.655 % | |
| Return On Invested Capital YoY | -76.691 % | |
| Return On Invested Capital IPRWA | high: 15.392 % mean: 7.53 % median: 6.271 % LAD: 1.775 % low: -3.832 % |
|