Is Lithia Motors, Inc. overvalued or undervalued?

As of 19 April 2023, Lithia Motors, Inc. has moved from a very attractive to an attractive valuation grade. The company is currently considered undervalued based on its key financial ratios, including a P/E ratio of 10, an EV to EBITDA of 10.72, and a Price to Book Value of 1.24. In comparison to its peers, Lithia Motors has a significantly lower P/E ratio than Williams-Sonoma, Inc. at 17.27 and Casey's General Stores, Inc. at 34.48, indicating that it is trading at a discount relative to these competitors.
Additionally, Lithia's return on equity (ROE) stands at 12.50%, suggesting efficient use of equity capital, while its return on capital employed (ROCE) is 8.33%. The company's stock performance has also outpaced the S&P 500 over the past year, with a return of 34.99% compared to the index's 10.26%. Overall, these factors reinforce the conclusion that Lithia Motors, Inc. is undervalued in the current market.