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Lithia MotorsLAD +0.62%93 Forward Rate of Return (Yacktman) % is 6.35% as of Jun. 2026, which is 72% below its 10-year median of 22.43. GuruFocus rates LAD with a GF Score™ of 93/100 and a GF Value™ of $385.47 (Fairly Valued). The stock has 13 warning signs investors should review. Among 996 Vehicles & Parts companies, Lithia Motors ranks worse than 57.53% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Lithia Motors's forward rate of return for was 6.35%.
The historical rank and industry rank for Lithia Motors's Forward Rate of Return (Yacktman) % or its related term are showing as below:
LAD'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 6.46 Med: 22.43 Max: 29.69
Current: 6.8
During the past 13 years, Lithia Motors's highest Forward Rate of Return was 29.69. The lowest was 6.46. And the median was 22.43.
LAD's Forward Rate of Return (Yacktman) % is ranked worse than 57.53% of 996
companies
in the Vehicles & Parts industry
Industry Median: 10.37
vs LAD: 6.80
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
Lithia Motors (NYSE:LAD) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Lithia Motors Forward Rate of Return (Yacktman) % Related Terms
Lithia Motors Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for Lithia Motors's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Lithia Motors Forward Rate of Return (Yacktman) % Chart
LAD vs RUSHA, KMX, AN: Forward Rate of Return (Yacktman) % Comparison
For the Auto & Truck Dealerships subindustry, Lithia Motors's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Lithia Motors Forward Rate of Return (Yacktman) % vs Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Lithia Motors's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Lithia Motors's Forward Rate of Return (Yacktman) % falls into.
Lithia Motors Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
Lithia Motors's Forward Rate of Return of Jun. 2026 is
Forward Rate of Return
=
Normalized Free Cash Flow
/
Price
+
5-Year EBITDA Growth Rate
=
-6.17390476
/
290.49
+
0.0848
=
6.35 %
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
What does a Forward Rate of Return (Yacktman) % of 6.35% mean?
Lithia Motors (LAD) has a Forward Rate of Return (Yacktman) % of 6.35% as of Jun. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Lithia Motors and its competitors. This is 72% below median its historical median of 22.43. Over the past decade, Lithia Motors' Forward Rate of Return (Yacktman) % has ranged from 6.46 to 29.69. According to the industry distribution chart, Lithia Motors ranks #573 out of 996 companies in the Vehicles & Parts industry, placing it in the top 57.5%.
Is Lithia Motors' Forward Rate of Return (Yacktman) % too high?
Lithia Motors' current Forward Rate of Return (Yacktman) % of 6.35% is 72% below median its 10-year median of 22.43. Over the past 10 years, this metric has ranged from a low of 6.46 to a high of 29.69. The Vehicles & Parts industry median Forward Rate of Return (Yacktman) % is 10.37. Lithia Motors' value of 6.35% is 38.8% below this industry median. Based on the distribution chart, Lithia Motors ranks #573 out of 996 companies in the Vehicles & Parts industry, which is below the industry midpoint. Overall, Lithia Motors has a GF Score™ of 93/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Lithia Motors' Forward Rate of Return (Yacktman) % compare to RUSHA and KMX?
According to the Vehicles & Parts industry distribution chart, Lithia Motors ranks #573 out of 996 companies for Forward Rate of Return (Yacktman) %. This places Lithia Motors in the lower half of its industry. The industry median Forward Rate of Return (Yacktman) % is 10.37. Lithia Motors' value of 6.35% is 38.8% below this benchmark. Historically, Lithia Motors' own Forward Rate of Return (Yacktman) % has ranged from 6.46 to 29.69 over the past decade. While the company's 10-year median is 22.43 vs. the industry median of 10.37, Lithia Motors has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for a Vehicles & Parts company?
The median Forward Rate of Return (Yacktman) % among Vehicles & Parts companies is 10.37, based on 996 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Lithia Motors's current Forward Rate of Return (Yacktman) % of 6.35% is 38.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Lithia Motors and its competitors. For the Vehicles & Parts industry, the median Forward Rate of Return (Yacktman) % is 10.37 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Lithia Motors's current Forward Rate of Return (Yacktman) % is 6.35%, which is 72% below median its own 10-year median of 22.43. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Lithia Motors stock overvalued right now?
Based on GuruFocus' analysis, Lithia Motors (LAD) is currently considered Fairly Valued. The stock's GF Value™ is $385.47, compared to a current price of $369.61 — trading 4.1% below its estimated fair value. The current Forward Rate of Return (Yacktman) % is 6.35%, which is 72% below median its 10-year median of 22.43 and 38.8% below the Vehicles & Parts industry median of 10.37. Lithia Motors' overall GF Score™ is 93/100 with 13 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For Lithia Motors (LAD), the current Forward Rate of Return (Yacktman) % is 6.35% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Lithia Motors (LAD) Overvalued in 2026?
Based on GuruFocus' analysis, Lithia Motors stock appears to be undervalued.
The current stock price of $369.61 is trading 4.1% below its estimated GF Value™ of $385.47.
GuruFocus considers Lithia Motors to be Fairly Valued.
Key valuation signals for LAD:
Forward Rate of Return (Yacktman) %: 6.35% (72% below median its 10-year median of 22.43)
GF Value™: $385.47 vs. price of $369.61 (4.1% below fair value)
Industry Position: 38.8% below the Vehicles & Parts median (#573 of 996)
No single metric tells the full story. See the LAD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Lithia Motors is a retailer of new and used vehicles and related services. The company offers nearly 60 brands of vehicles at nearly 500 stores globally across the US, Canada, and UK. The company has expanded largely through the acquisition of dealerships in smaller regional markets but now seeks to grow in any part of the US and we expect more deals over time in the US and, at times, abroad. Annual revenue in 2025 was $37.6 billion and we see over $50 billion possible in a few years. The US was 78.5% of 2025 revenue and the UK second at 18.4%, due to the 2024 Pendragon acquisition. In 2025, new vehicle sales were about 50% of total revenue. Lithia was founded in 1946, went public in 1996, and is the largest US auto dealer. It is based in Medford, Oregon.
93GF Score
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