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LAD (Lithia Motors) Graham Number : $221.33 (As of Sep. 2024)


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What is Lithia Motors Graham Number?

Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2024-10-31), the stock price of Lithia Motors is $332.37. Lithia Motors's graham number for the quarter that ended in Sep. 2024 was $221.33. Therefore, Lithia Motors's Price to Graham Number ratio for today is 1.50.

The historical rank and industry rank for Lithia Motors's Graham Number or its related term are showing as below:

LAD' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 0.78   Med: 1.41   Max: 2.49
Current: 1.5

During the past 13 years, the highest Price to Graham Number ratio of Lithia Motors was 2.49. The lowest was 0.78. And the median was 1.41.

LAD's Price-to-Graham-Number is ranked worse than
61.2% of 964 companies
in the Vehicles & Parts industry
Industry Median: 1.165 vs LAD: 1.50

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.


Lithia Motors Graham Number Historical Data

The historical data trend for Lithia Motors's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Lithia Motors Graham Number Chart

Lithia Motors Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Graham Number
Get a 7-Day Free Trial Premium Member Only Premium Member Only 89.76 162.91 294.98 263.00 238.62

Lithia Motors Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Graham Number Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 255.34 238.62 221.19 210.69 221.33

Competitive Comparison of Lithia Motors's Graham Number

For the Auto & Truck Dealerships subindustry, Lithia Motors's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Lithia Motors's Price-to-Graham-Number Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Lithia Motors's Price-to-Graham-Number distribution charts can be found below:

* The bar in red indicates where Lithia Motors's Price-to-Graham-Number falls into.



Lithia Motors Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Lithia Motors's Graham Number for the fiscal year that ended in Dec. 2023 is calculated as

Graham Number
=sqrt of (22.5* Tangible Book per Share *EPS without NRI)
=sqrt of (22.5*68.653*36.86)
=238.62

Lithia Motors's Graham Number for the quarter that ended in Sep. 2024 is calculated as

Graham Number
=sqrt of (22.5*Tangible Book per Share*EPS without NRI (TTM))
=sqrt of (22.5*71.549*30.43)
=221.33

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Lithia Motors  (NYSE:LAD) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Lithia Motors's Price to Graham number Ratio for today is calculated as

Price to Graham number=Share Price (Today)/Graham number (Q: Sep. 2024 )
=332.37/221.33
=1.50

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.


Lithia Motors Graham Number Related Terms

Thank you for viewing the detailed overview of Lithia Motors's Graham Number provided by GuruFocus.com. Please click on the following links to see related term pages.


Lithia Motors Business Description

Traded in Other Exchanges
Address
150 N. Bartlett Street, Medford, OR, USA, 97501
Lithia Motors is a retailer of new and used vehicles and related services. The company offers over 50 brands of vehicles at nearly 500 stores globally across the US, Canada, and UK. The company has expanded largely through the acquisition of dealerships in smaller regional markets but now seeks to grow in any part of the US and we expect more deals over time in the US and, at times, abroad. Annual revenue in 2023 was $31 billion and we see over $50 billion possible in a few years. The US was 90% of 2023 revenue and the UK second at 6%, the latter should rise to around 20% with the 2024 Pendragon acquisition. In 2023, new-car sales were about 49% of total revenue. Lithia was founded in 1946, went public in 1996, and is the largest US auto dealer. It is based in Medford, Oregon.
Executives
Sidney B Deboer director, officer: Executive Chairman 234 VISTA ST., ASHLAND OR 97520
Louis Miramontes director 150 N. BARTLETT ST., MEDFORD OR 97501
Shauna Mcintyre director 150 N. BARTLETT STREET, MEDFORD OR 97501
Bryan B Deboer director, officer: Chief Executive officer 150 N. BARTLETT STREET, MEDFORD OR 97501
Tina Miller officer: VP, CAO & Principal Fin. Off. 150 N. BARTLETT ST., MEDFORD OR 97501
Chris Holzshu officer: Sr. Vice President & CFO 150 N. BARTLETT STREET, MEDFORD OR 97501
David Stork officer: Senior Vice President 150 N. BARTLETT STREET, MEDFORD OR 97501
George N Hines officer: SVP, Chief Tech. & Innov. Off. 150 N. BARTLETT ST., MEDFORD OR 97501
Loretz Congdon Stacy director C/O CORE-MARK HOLDING CO. INC., 395 OYSTER POINT BLVD., SUITE 415, SOUTH SAN FRANCISCO CA 94080
Gary M Glandon officer: Chief People Officer C/O LITHIA MOTORS, INC., 150 NORTH BARTLETT STREET, MEDFORD OR 97501
James E. Lentz director C/O LITHIA MOTORS INC., 150 NORTH BARTLETT STREET, MEDFORD OR 97501
Scott Hillier officer: Sr. VP of Operations 150 N. BARTLETT STREET, MEDFORD OR 97501
Kenneth E Roberts director 150 N. BARTLETT ST., MEDFORD OR 97501
Marguerite Celeste officer: Senior Vice President 150 N BARTLETT STREET, MEDFORD OR 97501
Susan O Cain director 150 NORTH BARTLETT STREET, MEDFORD OR 97501