Is Lithia Motors, Inc. overvalued or undervalued?

As of 30 June 2025, the valuation grade for Lithia Motors, Inc. moved from expensive to attractive, indicating a shift towards a more favorable assessment. The company appears undervalued based on its current metrics, with a P/E ratio of 10, an EV to EBITDA of 10.72, and a Price to Book Value of 1.24. In comparison, peers such as Penske Automotive Group, Inc. have a P/E of 12.91 and CarMax, Inc. shows an EV to EBITDA of 116.16, highlighting Lithia's relative attractiveness in the market.
Despite recent challenges, including a 1-week return of -1.94% compared to a 1.05% gain in the S&P 500, the company has demonstrated resilience with a 1-year return of 17.82%, slightly outperforming the S&P 500's 17.14%. Overall, Lithia Motors, Inc. presents a compelling investment opportunity given its attractive valuation metrics and favorable peer comparisons.