Lithia Motors (NYSE:LAD) has quietly become America’s most valued new car retailer as it executes an audacious growth plan that the company expects will propel it past AutoNation (NYSE:AN) to become the country’s top franchised dealership group.
The plan includes hitting adjusted earnings per share of $50 by 2025 as well as at least $50 billion in annual revenue by then. That would be more than double the size of any new U.S. dealership group to date.
"We believe this is the base case, and it’s something that we believe is achievable," CEO Bryan DeBoer said in a phone interview. "We also have aspirational plans above that, that we’re all focused on internally."
The Medford, Oregon-based company is already well on its way to exceeding its 2025 targets. Since announcing the plan a year ago, it has added $8 billion in expected annualized revenue — double its initial annual target. Lithia says it has $15 billion more in annualized revenue under contract.
Wall Street has taken notice. Lithia’s stock has skyrocketed 176% in the past two years, including a twofold increase to $358 a share since the five-year plan was announced. The stock topped $400 a share in March and April. By comparison, AutoNation is trading at about $116 a share, up 145% in the past two years and 121% in the past year.
Lithia shares popped $4.84, or 1.4%, to $362.84, while those for AutoNation gained $1.23, or 1.1%, to $117.55.
