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Lithia Motors reviews system disruption as a consequence of cybersecurity incident By Investing.com

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MEDFORD, OR – Lithia Motors Inc . (NYSE:), a number one automotive retailer, introduced Monday that it has skilled disruptions in its dealership operations as a consequence of a cybersecurity incident at CDK International (NASDAQ:), a third-party service supplier. The incident, which occurred on June 19, 2024, led to the suspension of methods that assist dealership capabilities similar to gross sales, buyer relationship administration, stock, and accounting.

Upon receiving discover from CDK, Lithia Motors activated its cyber incident response procedures, which included precautionary containment measures and severing connections between its methods and CDK’s. Whereas the corporate has not found any compromise or unauthorized entry to its methods or networks, it acknowledged that the suspension of CDK’s providers has negatively affected its enterprise operations.

The dealerships of Lithia Motors proceed to function, using mitigation methods to reduce customer support disruptions. Nonetheless, the corporate has but to find out if the incident may have a cloth affect on its monetary situation or outcomes of operations. Lithia Motors is within the means of investigating the incident alongside CDK.

This report is predicated on the preliminary info accessible and should change because the investigation progresses. Lithia Motors has not offered a timeline for the complete restoration of the affected seller administration methods.

The small print of this occasion are derived from a latest SEC 8-Okay submitting by Lithia Motors, Inc.

In different latest information, Lithia & Driveway has been making notable strides in its monetary operations. The corporate not too long ago expanded its share repurchase plan by a further $350 million, a choice that elevates the whole repurchase authorization to roughly $660 million. This transfer is a testomony to the corporate’s confidence in its long-term development and profitability, as acknowledged by the corporate’s President and CEO, Bryan DeBoer.

Furthermore, Lithia & Driveway reported a 23% enhance in revenues, reaching $8.6 billion for the primary quarter of 2024. Regardless of a slight decline in new gross revenue per unit, the corporate stays dedicated to operational efficiency and market share growth.

A number of analyst companies have revised their outlook on Lithia Motors. Evercore ISI diminished the corporate’s inventory worth goal to $360, citing earnings drag from Pendragon GPUs and elevated bills. Craig-Hallum additionally adjusted the corporate’s worth goal to $310 as a consequence of first-quarter outcomes impacted by operational challenges. Jefferies maintained a Purchase ranking however lowered the value goal to $325 following a first-quarter adjusted earnings per share of $6.11, which fell in need of the consensus estimate.

These latest developments emphasize Lithia & Driveway’s ongoing monetary and operational evolution.

InvestingPro Insights

Lithia Motors Inc. (NYSE:LAD) has proven resilience regardless of the latest cybersecurity incident affecting its dealership operations. In line with real-time knowledge from InvestingPro, the corporate boasts a sturdy market capitalization of $6.82 billion and is buying and selling at a pretty earnings a number of of seven.28, with an adjusted P/E ratio during the last twelve months as of Q1 2024 at 6.99. These metrics recommend an organization that’s doubtlessly undervalued, notably when contemplating that Lithia Motors has raised its dividend for 10 consecutive years, signaling confidence in its monetary well being and dedication to returning worth to shareholders.

The corporate’s income development additionally stays robust, with a 14.67% enhance within the final twelve months as of Q1 2024, and an much more spectacular quarterly income development of twenty-two.77% in Q1 2024. This efficiency is essential because it navigates by way of the operational challenges posed by the cybersecurity incident. Moreover, Lithia Motors is a outstanding participant within the Specialty Retail trade, which can present a aggressive edge as it really works to mitigate the affect of the incident on its enterprise.

For buyers looking for extra in-depth evaluation, there are extra InvestingPro Suggestions accessible, together with insights on the corporate’s dividend sustainability and inventory worth volatility. To discover these additional, go to https://www.investing.com/professional/LAD and use the coupon code PRONEWS24 to get a further 10% off a yearly or biyearly Professional and Professional+ subscription. There are 11 extra suggestions ready that might information funding selections post-incident.

This text was generated with the assist of AI and reviewed by an editor. For extra info see our T&C.

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