Lithia Motors: Fast Growing Auto Stock Again Crushes Estimates

| About: Lithia Motors, (LAD)

Earnings reports continue to pour in this week. One small cap stock has caught my eye as it continues to crush expectations with its latest earnings report. It is Lithia Motors (NYSE:LAD).

Key earnings highlights for Lithia Motors:

  • Recurring earnings came in at 60 cents a share, significantly above the estimates of 42 cents.
  • Revenues rose 30% to $758.9mm, easily beating consensus estimates of $688.5mm.
  • The company raised full year 2012 guidance to $2.43 to $2.53 a share, up from previous guidance of $2.06 to $2.16.
  • It raised its dividend payout to 10 cents a share from 7 cents a share.

4 additional reasons LAD will continue to motor along from $25 a share:

  • The company now has crushed estimates for at least 7 straight quarters. The average beat over consensus over that time period is over 35%.
  • Lithia's growth prospects are undervalued by the market given its low five year projected PEG of just .5.
  • The stock has a forward PE of under 10.5, significantly under its historical average of 15.3.
  • Consensus estimates for FY2012 and FY2013 have risen smartly over the past three months. Given this earnings report and the company guidance, look for those estimates to be ratcheted up sharply over the next few weeks.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in LAD over the next 72 hours.