$Lithia Motors (LAD.US)$🎯 2023.8.7 The current price is 299...

New data: the second two quarters of 2022 and the whole year, the first two quarters of 2023

In 2022, revenue increased by 23.5%, operating profit increased by 13.8%, and net profit increased by 18.7%.

Revenue for the first two quarters of 2023 increased by 8.2%, operating profit shrank by 11.7% due to the decline in gross margin, and net profit shrank by 22.1%.

The balance ratio increased from 58.2% to 65% in 2022, and the balance ratio further increased to 67.2% in 2023Q2.

In 2022, inventories increased by 1.02 billion to 3.41 billion dollars, accounts receivable increased by 130 million to 810 million yuan, while net profit for the same period was only 1.26 billion yuan, about the same increase as inventory plus receivables. Inventories further increased by $870 million to $4.28 billion in 2022-Q2, exceeding the range where quarterly revenue reached unhealthy levels, while net profit for the same period was only $301 million, and cash flow deteriorated further.

Goodwill and other intangible assets increased from $1,776 million to $3,317 billion, and further increased to $3,626 billion in 2023Q2, accounting for 62% of net assets of $5.803 billion. Long-term loans of 6.613 billion dollars have already exceeded net assets, and the leverage ratio is very high.

There was a large net outflow of operating cash flow in 2022 and the first two quarters of 2023, while net investment was still a very large net outflow.

Currently, the price-earnings ratio is 6.8, and the price-earnings ratio TTM has increased to 7.5. Overall, it is not very attractive, so I closed my position and quit.