Lithia Motors Inc
Key analysis of Lithia’s used vehicle operations
The larger share of CPOs and core vehicles in its sales mix drives Lithia’s significant lead in same-store gross profit per vehicle.
Lithia Motors, DCH Auto Group create a powerhouse auto retailer
In October 2014, Lithia completed its acquisition of DCH Auto Group for an estimated price of $669.5 million.
Understanding Lithia Motors’s Finance and Insurance business
Lithia’s same-store revenue grew 16.9% year-over-year to $120.4 million in the nine months ending September 30, 2014, driven by increased vehicle sales.
Analyzing Lithia’s throughput contribution and earnings
Lithia’s income from operations in the nine months ending September 30, 2014, was $165.9 million, up from $137.9 million in the previous year.
Outlook and valuation of Lithia Motors
Morgan Stanley analysts upgraded Lithia Motors to overweight from underweight, following a sell-off resulting in a ~30% drop in Lithia’s share price.
Analyzing Lithia Motors’s leverage and liquidity profile
The combined entities of Lithia Motors and DCH Auto Group are expected to generate free cash flow of $135 million in 2015.
Glenview Capital builds up position in Lithia Motors
Lithia targets mid-sized regional markets for domestic and imported vehicles, protecting the company from losing market share to leading industry players.