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Lithia Motors LAD

Lithia Motors scores weak on business quality (3.5 of 10). Here is why, in plain words, and what our sealed record shows.

Last price$290.24Oct 10, 2026
Business qualityWeak
Next earningsOct 21, 2026
Insiders, 90 daysSelling

Why it matters

  1. What Lithia Motors does

    Lithia Motors sells new and used vehicles, parts, and maintenance services through a vast dealership network. Customers pay for vehicle purchases, financing, and repairs.

  2. What it does best

    Lithia dominates physical and digital automotive retail, generating $37.9 billion in revenue with a 15.4% gross margin. This scale outpaces peers like PAG, which posted a 16.1% gross margin, but relies on massive physical infrastructure that is capital-intensive to replicate.

  3. The main risk

    Rising debt presents a clear vulnerability, with total debt reaching $14.8 billion against just $112 million in cash. With interest coverage at 3.1x, debt servicing leaves little room for error if vehicle sales slow.

Quality, check by check

Scored against its own industry, from company filings.

ProfitabilityWeak

Operating margin sits at 4.2% while FCF margin rests at negative 1.3%. Profitability is compressing as heavy debt loads and negative free cash flow of $505 million weigh down earnings during scale.

MoatWeak

The moat rests on a massive physical and digital dealership network locking in car buyers. Its gross margin sits in the bottom quartile of its sector at 6%, showing low pricing power against intense retail competition.

GrowthSteady

Revenue grew 4.0% to reach $37.9 billion, maintaining a steady climb from $28.2 billion in 2022. This top-line expansion sits right in the middle of its sector at the 44th percentile.

Financial healthWeak

Debt-to-equity sits at 2.2x and interest coverage is a tight 3.1x, meaning debt costs consume significant earnings. Free cash flow dropped to negative $505 million, leaving the balance sheet softer.

Insiders

Executives and directors, from SEC Form 4 filings we read ourselves. Open market trades only; grants, option exercises and pre-planned sales left out.

1 sold $120K outside pre-planned sales.

Our sealed record on LAD

Verdicts appear here 30 days after we publish them; members see today's. Each one is in the nightly ledger, fingerprinted the night it was made.

The first sealed verdicts appear here on Oct 11, 2026.

Questions

Is LAD a good business?

Lithia Motors scores weak on the Cluenex quality check (3.5 of 10), measured against its own industry. Profitability is weak, moat weak, growth steady and financial health weak.

Are insiders buying LAD?

In the last 90 days of SEC Form 4 filings: 1 sold $120K outside pre-planned sales.

When does LAD report earnings?

Oct 21, 2026.

For members

See LAD today

  • Today's verdict on LAD, and why
  • Fair value with cautious, base and optimistic cases
  • The exact price that would change the verdict
  • Which stocks each signal names, the night it fires
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Cite this page: Cluenex, “Lithia Motors (LAD)”, https://cluenex.com/stocks/lad/, data as of Oct 10, 2026.