The USD 74.95 support, currently tested, should allow Lithia Motors to rally again.
From a fundamental viewpoint, Lithia Motors seems undervalued in terms of enterprise value. Based on the current price, its market capitalization, plus its net debt, represents 0.34 times its revenues.
This valuation is only 11.67 and 10.33 times the two next years earnings.
The security follows a downward trend in the short term, under the USD 92.14 resistance area.
The trend is bearish also in the mid-term, under USD 92.14. However, the selling pressure has run out of steam. Indeed, whereas the stock shows an oversold condition, the USD 74.95 support area currently tested might help for a technical rrebound in the next trading sessions.
Thanks to the technical pattern and Lithia Motors’ strong fundamentals, active investors can open long trades above USD 75. The downside potential is limited and the timing seems perfect to benefit from a technical rebound.
The first goal will be fixed at USD 86 (20-day moving average) in a first time and then at USD 92.15.
However, a bearish trend would regain the upper hand if the security breakdown the USD 75 level.
Lithia Motors, Inc. is a global automotive retailer. The Company is engaged in providing an array of products and services throughout the vehicle ownership lifecycle. The Company offers convenient experiences through its comprehensive network of physical locations, e-commerce platforms, captive finance solutions and other synergistic adjacencies. The Company operates through two segments: Vehicle Operations and Financing Operations. Its Vehicle Operations consist of all aspects of its auto merchandising and service operations, including its retail automotive, recreational vehicles, and motorcycle franchises that sell new vehicles, used vehicles, parts, repair and maintenance services, and vehicle finance and insurance products. Its Financing Operations segment provides financing to customers buying and leasing retail vehicles from its Vehicle Operations. The Company operates approximately 482 locations representing 51 brands across the United States, United Kingdom, and Canada.
LITHIA MOTORS, INC. 
