NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Specialty Retail industry. The net income increased by 962.5% when compared to the same quarter one year prior, rising from -$1.72 million to $14.83 million.
- LITHIA MOTORS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LITHIA MOTORS INC increased its bottom line by earning $0.52 versus $0.34 in the prior year. This year, the market expects an improvement in earnings ($1.49 versus $0.52).
- Powered by its strong earnings growth of 1016.66% and other important driving factors, this stock has surged by 153.89% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- The revenue growth greatly exceeded the industry average of 12.7%. Since the same quarter one year prior, revenues rose by 30.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
Lithia Motors, Inc. operates as an automotive franchisee and retailer of new and used vehicles. The company has a P/E ratio of 27.2, below the average specialty retail industry P/E ratio of 27.5 and above the S&P 500 P/E ratio of 17.7. Lithia has a market cap of $491.8 million and is part of the
industry. Shares are up 50.7% year to date as of the close of trading on Thursday.
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