13 Best Car Stocks to Buy in 2025

6. Lithia Motors, Inc. (NYSE:LAD)

Number of Hedge Fund Holders: 45

Revenue Growth (YOY): 16.58%

Lithia Motors, Inc. (NYSE:LAD) is the largest auto dealer in the United States. It is a new and used vehicle retailer that also provides related services. The company has almost 500 outlets in the United States, Canada, and the United Kingdom, offering over 50 vehicle brands. The company has primarily grown by acquiring dealerships in smaller regional areas, but it now aims to expand throughout the United States, and Morningstar analysts anticipate more deals in the US as well as abroad in the years to come. Revenue in 2024 was $36.2 billion, and in the coming years, analysts anticipate revenue of above $50 billion. The United States accounted for 78% of 2024 revenue, with the United Kingdom coming in second at 19%, due to the 2024 Pendragon acquisition. Sales of new cars accounted for almost 49% of overall revenue in 2024.

John Murphy, a BofA analyst, maintained his Buy recommendation on Lithia Motors, Inc. (NYSE:LAD) shares and increased his price target from $410 to $460. The business reduced its North American car production projection to 16.1 million from 16.7 million due to plant downtime and a significant rise in Chinese imports to Mexico. The company says that dealer commentary for 2025 was positive and indicated “another year of solid growth,” characterized by rising volumes, steady pricing, and ongoing execution.

In Q1 2025, Lithia Motors, Inc. (NYSE:LAD) announced robust earnings growth, with adjusted diluted earnings up 25.4% year over year and diluted earnings per share rising 34.8% to $7.94. The business made $9.2 billion, a 7% rise over the same time last year, setting a new sales record. A major highlight was the 38.8% rise in the value of auto sales from the previous year. The warranty work gross profits grew by a noteworthy 19.7%, while the after-sales segment witnessed a strong performance, with gross profit rising by 7.5%.