MeritValue

LITHIA MOTORS INC

LADdata completeness 88%17 fiscal years on file
The thesis, from the filings

LITHIA MOTORS INC earns about 20% on invested capital, far above its ~9% cost of capital, and has bought back 12% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $18.42 and $408.31 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$22.8B1$28.2B2$31B3$36.2B3$37.6B3
Net income$1.06B4$1.25B5$1B6$796.7M6$819.6M6
Operating cash flow$1.8B7−$610.1M8−$472.4M9$425.1M9$356.7M9
Capital expenditure$260.4M10$303.1M11$230.2M12$351.4M12$350.9M12
Free cash flow (derived)$1.54B7−$913.2M8−$702.6M9$73.7M9$5.8M9
Total debt$2.4B13————
Cash & equivalents$153M14$271.5M15$972M15$445.8M15$391.3M15
Diluted shares29.0M28.3M27.6M27.1M25.4M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$2,599.69
your share of equity
Profit it earned you last year
$322.68
Free cash flow it threw off
$2.28
Debt you’d be carrying
—

10 shares is a claim on $2,599.69 of net worth that earned you $322.68 and generated $2.28 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
20% avg · 5y
FY21 17%FY22 27%FY23 22%FY24 16%FY25 17%

It earned about 20% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−12% shares · 5y

Share count is down 12% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $18.42 and $408.31 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$18.42
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$5.8M
DCF · Growth Exit 5Y
$18.67
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$5.8M
Earnings Power Value
$408.31
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$1B
  • growthAssumed0.0%
Graham Number
$434.8
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $18.67
The three cases
Bear0.0%$18.67
Base0.0%$18.67
Bull5.0%$19.46

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001023128-24-000032 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001023128-25-000026 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001023128-26-000015 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001023128-24-000032 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001023128-25-000026 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001023128-26-000015 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001023128-24-000032 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001023128-25-000026 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001023128-26-000015 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001023128-24-000032 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001023128-25-000026 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001023128-26-000015 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001023128-22-000042 (LongTermDebt)
  14. 10-K · period ending 2021-12-31 · accession 0001023128-22-000042 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2022-12-31 · accession 0001023128-26-000015 (CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents)