← All companies ← LAB Manual LADR → ← KMX Auto Dealers & Services MCW →

LAD, Lithia Motors

Lithia Motors owns and runs a large network of automobile dealerships across the country, gathered by buying up other dealers. Each store sells new and used vehicles and, alongside the metal, arranges the financing and insurance and supplies the parts and repair service that come with owning a car. Selling the vehicle is the low-margin part; the finance, insurance, parts and service attached to it carry the richer margins, and acquiring more dealers adds more of all of it.

Simple, convenient and transparent experiences are offered through our comprehensive network of physical locations, e-commerce platforms, captive finance solutions, fleet 2 management offerings, and other synergistic adjacencies.

Our highly diversified and competitively differentiated design provides us the flexibility and scale to pursue our vision to modernize personal transportation solutions wherever, whenever, and however consumers desire.

Latest annual: FY2025 10-K

LAD · Lithia Motors

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$37.6B

+4.0% YoY · 23% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $37.7B 5-yr avg $31.2B

Gross margin 15% 5-yr avg 17%

Operating margin 4.0% 5-yr avg 5.6%

ROIC 7% 5-yr avg 11%

Owner-earnings margin −1% 5-yr avg 0%

Free cash flow margin −1% 5-yr avg 0%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is led by New vehicle (50%) and Used Vehicle (36%), with 2 more lines behind.
What moves the needle: This is a roll-up, and a roll-up turns on two things: buying dealerships at sensible prices and then running them better and cheaper as one group than they ran alone. The vehicle itself is close to a commodity — the same model sits on a rival's lot down the road — so the durable margin hides in the back end: financing, insurance, and the parts-and-service work that a car owner returns for again and again. Watch whether scale buys real advantage in purchasing, financing and shared overhead, and whether bolted-on stores keep earning their keep. The bad case is the one every acquirer faces: overpaying for dealers, funding the buying with debt, and demand for cars that rides the broader economy and the price of credit, neither of which it sets. Whether the buying creates value or merely bulk shows in the returns on capital and the margins in the record below.
Is it a good business?: Return on capital has sat near the cost of capital (median 12%). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Drafted from the company's filings and reviewed by hand; every number is shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 4 lines, the largest New vehicle at 50%.

Revenue by product line, FY2025

New vehicle50%$18.7B
Used Vehicle36%$13.4B
Aftersales11%$4.1B
Finance and insurance4%$1.5B

By geographyUnited States79%United Kingdom18%Canada3%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$8.7B	$10.1B	$11.8B	$12.7B	$13.1B	$22.8B	$28.2B	$31.0B	$36.2B	$37.6B	$37.7B	RevenueRevenue
15%	15%	15%	15%	17%	19%	18%	17%	15%	15%	15%	Gross marginGross mgn
10%	10%	11%	11%	11%	11%	11%	11%	10%	10%	11%	SG&A / revenueSG&A/rev
$338M	$409M	$447M	$495M	$693M	$1.7B	$1.9B	$1.7B	$1.6B	$1.6B	$1.5B	Operating incomeOp. inc.
3.9%	4.1%	3.8%	3.9%	5.3%	7.3%	6.9%	5.5%	4.3%	4.2%	4.0%	Operating marginOp. mgn
$197M	$245M	$266M	$272M	$470M	$1.1B	$1.3B	$1.0B	$797M	$820M	$711M	Net incomeNet inc.
30%	29%	21%	28%	27%	28%	27%	26%	24%	26%	26%	Effective tax rateTax rate
											Cash flow & returns
$91M	$149M	$520M	$525M	$545M	$1.8B	($610M)	($472M)	$425M	$357M	($74M)	Operating cash flowOp. cash
$49M	$58M	$75M	$82M	$92M	$127M	$173M	$204M	$295M	$324M	$332M	DepreciationDeprec.
($167M)	($165M)	$165M	$154M	($41M)	$575M	($2.1B)	($1.7B)	($725M)	($847M)	($1.2B)	Working capital & otherWC & other
$101M	$105M	$158M	$125M	$168M	$260M	$303M	$230M	$351M	$351M	$379M	CapexCapex
1.2%	1.0%	1.3%	1.0%	1.3%	1.1%	1.1%	0.7%	1.0%	0.9%	1.0%	Capex / revenueCapex/rev
$42M	$91M	$444M	$442M	$452M	$1.7B	($783M)	($703M)	$74M	$6M	($453M)	Owner earningsOwner earn.
0.5%	0.9%	3.8%	3.5%	3.4%	7.3%	−2.8%	−2.3%	0.2%	0.0%	−1.2%	Owner earnings marginOE mgn
($10M)	$44M	$362M	$400M	$377M	$1.5B	($913M)	($703M)	$74M	$6M	($453M)	Free cash flowFCF
−0.1%	0.4%	3.1%	3.2%	2.9%	6.7%	−3.2%	−2.3%	0.2%	0.0%	−1.2%	Free cash flow marginFCF mgn
$235M	$460M	$374M	$367M	$1.5B	$2.7B	$1.2B	$1.2B	$1.2B	$886M	$947M	AcquisitionsAcquis.
$24M	$27M	$28M	$28M	$29M	$39M	$45M	$53M	$57M	$55M	$54M	Dividends paidDiv. paid
$113M	$34M	$149M	$3M	$51M	$231M	$688M	$49M	$366M	$961M	—	BuybacksBuybacks
7%	14%	14%	13%	11%	16%	14%	10%	8%	7%	7%	ROICROIC
22%	23%	22%	18%	18%	23%	24%	16%	12%	12%	11%	Return on equityROE
19%	20%	20%	17%	17%	22%	23%	15%	11%	12%	10%	Retained to equityRetained/eq
											Balance sheet
$50M	$57M	$32M	$84M	$160M	$153M	$272M	$972M	$446M	$391M	$161M	Cash & investmentsCash+inv
$418M	$522M	$529M	$505M	$614M	$686M	$813M	$1.1B	$1.2B	$1.1B	$1.3B	ReceivablesReceiv.
$1.8B	$2.1B	$2.4B	$2.4B	$2.5B	$2.4B	$3.4B	$4.8B	$5.9B	$6.1B	$6.2B	InventoryInvent.
$88M	$111M	$126M	$125M	$158M	$235M	$258M	$288M	$334M	$340M	$489M	Accounts payablePayables
$2.1B	$2.5B	$2.8B	$2.8B	$2.9B	$2.8B	$4.0B	$5.6B	$6.8B	$6.9B	$7.0B	Operating working capitalOper. WC
$2.3B	$2.8B	$3.0B	$3.1B	$3.3B	$3.3B	$4.6B	$6.9B	$7.8B	$7.9B	$8.2B	Current assetsCur. assets
$1.9B	$2.3B	$2.5B	$2.6B	$2.5B	$2.4B	$3.2B	$4.9B	$6.6B	$6.7B	$8.2B	Current liabilitiesCur. liab.
1.2×	1.2×	1.2×	1.2×	1.3×	1.4×	1.5×	1.4×	1.2×	1.2×	1.0×	Current ratioCurr. ratio
$259M	$256M	$435M	$455M	$593M	$977M	$1.5B	$1.9B	$2.1B	$2.5B	$2.5B	GoodwillGoodwill
$3.8B	$4.7B	$5.4B	$6.1B	$7.9B	$11.1B	$15.0B	$19.6B	$23.1B	$25.1B	$25.7B	Total assetsAssets
$2.4B	$1.0B	$1.4B	$1.4B	$2.1B	$3.2B	$5.5B	$7.2B	$8.2B	$9.7B	$9.7B	Total debtDebt
$2.3B	$971M	$1.3B	$1.3B	$2.0B	$3.0B	$5.2B	$6.2B	$7.7B	$9.3B	$9.5B	Net debt / (cash)Net debt
$911M	$1.1B	$1.2B	$1.5B	$2.7B	$4.6B	$5.2B	$6.2B	$6.7B	$6.6B	$6.4B	Shareholders’ equityEquity
0.1%	0.1%	0.1%	0.1%	0.2%	0.2%	0.1%	0.1%	0.2%	0.2%	0.2%	Stock comp / revenueSBC/rev
—	—	—	$2M	$4M	—	—	—	—	—	$4M	Goodwill written downGW imp.
											Per share
25.5M	25.1M	24.5M	23.4M	24.1M	29.0M	28.3M	27.6M	27.1M	25.4M	23.4M	Shares out (diluted)Shares
$340.32	$401.85	$482.51	$541.57	$544.67	$787.30	$996.04	$1124.72	$1335.36	$1481.69	$1612.31	Revenue / shareRev/sh
$7.73	$9.77	$10.84	$11.60	$19.51	$36.56	$44.20	$36.26	$29.40	$32.27	$30.36	EPS (diluted)EPS
$1.63	$3.63	$18.13	$18.89	$18.76	$57.58	$-27.66	$-25.46	$2.72	$0.23	$-19.36	Owner earnings / shareOE/sh
$-0.39	$1.73	$14.76	$17.08	$15.63	$52.99	$-32.27	$-25.46	$2.72	$0.23	$-19.36	Free cash flow / shareFCF/sh
$0.95	$1.06	$1.13	$1.18	$1.21	$1.34	$1.60	$1.91	$2.08	$2.18	$2.32	Dividends / shareDiv/sh
$3.95	$4.20	$6.45	$5.34	$6.96	$8.98	$10.71	$8.34	$12.97	$13.81	$16.21	Cap. spending / shareCapex/sh
$35.72	$43.16	$48.87	$62.72	$110.44	$159.53	$183.96	$225.14	$245.39	$259.97	$272.83	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+17.8%/yr	+22.2%/yr
Owner earnings / share	−19.6%/yr	−58.6%/yr
EPS	+17.2%/yr	+10.6%/yr
Dividends / share	+9.7%/yr	+12.5%/yr
Capital spending / share	+14.9%/yr	+14.7%/yr
Book value / share	+24.7%/yr	+18.7%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Used Vehicle+5.9%
“Used vehicle gross profits increased 1.3%, due to an increase in retail unit sales of 3.3%, partially offset by a decrease in average gross profit per retail unit of 0.7%.”
✓ direction matches the filed record

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

25Mpeak FY2021

ROIC

7%low FY2016

Gross margin

15%low FY2016

Net debt ÷ owner earnings

1601.3×peak FY2025

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$6Mowner earningsvs.$820Mnet incomelow FY2022

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $820M of profit but $6M of owner earnings: $814M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$820M

Owner earnings$6M · 0% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$820M	$797M	$1.0B	$1.3B	$1.1B
Depreciation & amortizationnon-cash charge added back	+$324M	+$295M	+$204M	+$173M	+$127M
Stock-based compensationreal costnon-cash, but a real cost	+$60M	+$58M	+$41M	+$41M	+$35M
Working capital & othertiming of cash in and out, other non-cash items	−$847M	−$725M	−$1.7B	−$2.1B	+$575M
Cash from operations	$357M	$425M	($472M)	($610M)	$1.8B
Maintenance capital expenditurethe spending needed just to hold position and volume	−$351M	−$351M	−$230M	−$173M	−$127M
Owner earnings	$6M	$74M	($703M)	($783M)	$1.7B
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	—	—	—	−$130M	−$133M
Free cash flow	$6M	$74M	($703M)	($913M)	$1.5B
Owner-earnings marginowner earnings ÷ revenue	0%	0%	-2%	-3%	7%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $60M), owner earnings is nearer ($55M).

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

Interest expense not tagged in the data

What this means
No usable interest-expense line was tagged in the filing data, but the balance sheet carries real net debt — so the interest burden here is unknown, not absent. Read the debt on the net-debt check below.
How heavy is the debt, net of cash? $9.3B · 5.8× operating profit

Heavy net debt

Cash $391M − debt $9.7B

What this means
Netting $391M of cash and short-term investments against $9.7B of debt leaves $9.3B owed, about 5.8× a year's operating profit (6.1× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 77d

Long (60+ days)

DSO 11 + DIO 70 − DPO 4 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 11%

Solid through the cycle

10-yr median, range 7%–16%; 7% latest = NOPAT $1.2B ÷ invested capital $15.9B

Industry peers: median 13%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 7% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 0%

Thin through the cycle

10-yr median margin, range -3%–7%; latest $6M = operating cash $357M − maintenance capex $351M

Industry peers: median 3%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 0% of revenue this year, a 0% median across 10 years. Treating stock comp as the real expense it is (less $60M of SBC) leaves ($55M).
Are earnings backed by cash? 0.44×

Thinly cash-backed

Cash from ops $357M ÷ net income $820M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 17521%

Returned more than it generated

Dividends + buybacks $1.0B ÷ Owner Earnings $6M

What this means
The company returned more than it generated: against $6M of Owner Earnings, $1.0B (17521%) went back to shareholders, $55M dividends, $961M buybacks — the excess came from the balance sheet or borrowing, not the year's operations. Net of $60M stock comp, the real buyback was about $901M. Sustained, that pattern draws down cash or adds debt; the net-debt line above shows where it stands.
Investing or harvesting? 1.08×

Maintaining

Capex $351M ÷ depreciation $324M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $37.6B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 1.17×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $9.7B vs $1.2B WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +270%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $38.25/share (latest year $35.94), the averaged base the calculator's gate runs on, and book value is $289.54/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 1 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 4% → 5% (3-yr avg ends)

In the filing’s words The filing ties gains to its own pricing, but names price competition too — pricing power that is real yet contested, not unopposed. The margin shows who is winning.

What this means
Through the cycle the operating margin held roughly steady — about 4% early, 5% lately, median 4%.
Reinvestment, incremental ROIC 8%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth −6%/yr

What this means
Owner earnings shrank about 6% a year over the record.
Worst year 2018 · 3.8% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −0.0%/yr

What this means
Roughly flat share count, little dilution, little buyback.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.
How management talks about it Promotional

What this means
The returns have faded, yet the filing reaches for a promoter’s vocabulary — world-class, best-in-class, disruptive — more than an owner’s. When the words sell harder than the results deliver, the gap is the thing to weigh.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$8.2B

Cash & short-term investments$161M
Receivables$1.3B
Inventory$6.2B
Other current assets$536M

Current liabilities$8.2B

Debt due within a year$12M
Accounts payable$489M
Other current liabilities$7.7B

Current ratio0.99×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.24×stricter: inventory excluded

Cash ratio0.02×strictest: cash alone against what's due

Working capital($48M)the cushion left after near-term bills

Debt due this year vs. cash$12M due · $161M cash covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet

Cash runway0.4 yrsthe business is consuming cash; this is how long the cash on hand lasts at that rate

Revenue, latest quarter vs. a year ago+1.0%the freshest read on whether the business is still growing

Current ratio, recent quarters1.2× → 1.0×

Deeper floors

Tangible book value$3.9Bequity stripped of goodwill & intangibles

Net current asset value($11.2B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$3.2B$755M of it operating leases

Deferred revenue$467Mcustomer cash collected before delivery; operating float

From the company's latest filing.

Debt maturity

the debt note, SEC EDGAR →

Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.

'26$72M

'27$537M

'28$124M

'29$889M

'30$739M

later$1.1B

Bars scaled to the largest single year; “later” is everything due after 2030, shown apart since it dwarfs the years.

Due in the next 12 months$72Mthe first rung: what must be repaid or rolled over within the year

Within two years$608Mthe near wall, the part most exposed to today’s credit conditions

Biggest single year$889Min 2029the lumpiest maturity, where a refinancing, if needed, is largest

Total scheduled principal$3.5Bevery year plus what lies beyond, as the footnote totals it

Against what the business has and earns

Cash & short-term investments, Mar 31, 2026$161M

One year of owner earnings (FY2025)$6M

Together, against $72M due next year2.3×

Cash on hand as of Mar 31, 2026 plus a year’s owner earnings comes to $167M against the $72M due in the twelve months after the Dec 31, 2025 schedule: 2.3 times it.

Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the total the table states.

How the cash was used, 2016–2025

Over the record, the business generated $3.3B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$2.2B · 65%
Dividends$384M · 12%
Buybacks$2.6B · 80%

Returned to owners$3.0B
174% of the owner earnings the business produced over the span, $384M as dividends and $2.6B as buybacks.
Source of funding−$1.9B
Reinvestment and shareholder returns ran $1.9B beyond the operating cash the business generated, so the gap was financed off the balance sheet: debt rose from $2.4B to $9.7B.
Average price paid for buybacks$288.05
Across the years where the filing reports a share count, 8M shares were bought for $2.3B, about $288.05 each. Year to year the price paid ranged from $89.72 (2020) to $342.61 (2023); its heaviest year, 2025, paid $318.18 ($961M).
Net change in share count−8.2%
The diluted count fell from 26M to 23M, so the buybacks outran the stock issued to staff.
Dividend record$2.18/sh
Paid in 10 of the years on record, the per-share dividend growing about 10% a year. It was never cut over the span.
Return on what it retained−12%
Of the earnings it kept rather than paid out ($3.4B over the span), annual owner earnings (first three years vs last three) fell $400M, so each retained $1 gave back about 0.12 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill$2.5B10% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity38%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$10.2Bover 10 years buying other businesses, against $2.2B of capital spent building

$5M written down across 2 years (2019, 2020): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Pay, as filed	“Actually paid”	Owner earnings
2021	$10.5M	$14.0M	$1.7B
2022	$11.1M	$3.9M	($783M)
2023	$19.2M	$29.4M	($703M)
2024	$16.8M	$20.7M	$74M
2025	$15.9M	$22.8M	$6M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$60M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Lithia Motors is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

4 of the 6 tests turned up something to look into; the other 2 came back clean.

Look hereIs it less profitable than it was?−0.7% vs 1.7%
The owner-earnings margin averaged 1.7% early in the record and −0.7% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid debt outgrow the business?$2.4B → $9.7B
Debt rose from $2.4B to $9.7B while owner earnings went from about $192M to ($208M): the borrowing grew and the earnings that would carry it are not there now. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereDid reported profit become cash?0.52×
Across the record the business reported $6.4B of net income but generated $3.3B of operating cash, a 0.52-to-one conversion. Profit that does not turn into cash over many years is the classic mark of earnings that are softer than they look. Ask where the gap sits, receivables, inventory, or costs being capitalized rather than expensed.
Look hereAre "one-time" charges a yearly habit?6 of 10 years
Management took an impairment or write-down in 6 of the last 10 years, $39M in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.

And these came back clean

Did the share count rise anyway?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Auto Dealers & Services

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
LADLithia Motors	$37.6B	15%	4.3%	12%	1%
PAGPenske Automotive	$31.8B	16%	3.7%	13%	3%
ANAutoNation	$27.6B	18%	4.3%	14%	2%
KMXCarMax	$25.9B	12%	5.3%	4%	0%
GPIGroup 1 Automotive	$22.6B	16%	3.9%	13%	3%
CVNACarvana	$20.3B	14%	-0.7%	-3%	-17%
MUSAMurphy USA	$19.4B	90%	3.6%	20%	3%
ABGAsbury Automotive Group Inc	$18.0B	17%	4.8%	14%	4%
Group median	—	16%	4.1%	13%	2%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Lithia Motors has delivered.

Lithia Motors’s latest year shows negative owner earnings, below the record’s own through-cycle owner earnings. So the tool opens on the through-cycle base, the cash it would earn at rest; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Lithia Motors earns about $260M on its 0.7% median owner-earnings margin. This year’s 0.0% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($260M) Net of stock comp (−$57M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−45%/yr

Owner-earnings growth · ’16→’25+10%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings ($453M) on 23M shares outstanding, per the 10-Q cover, as of 2026-04-29; net debt $9.5B. The base opens on the through-cycle figure (the latest year sits off the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh LAD against another business →

The owners of LAD: the meeting and the votes →

Cite: Owner Scorecard, "Lithia Motors (LAD), the owner's record," https://ownerscorecard.com/c/LAD, data as of 2026-07-09.

Manual order: ← LAB its page in the Manual LADR →

Industry order: ← KMX the Auto Dealers & Services chapter MCW →