The Opportunities section of your Lighthouse report lists all images in your page that aren't appropriately sized, along with the potential savings in kilobytes (KB). Resize these images to save data and improve page load time:
How Lighthouse calculates oversized images
For each image on the page, Lighthouse compares the size of the rendered image against the size of the actual image. The rendered size also accounts for device pixel ratio. If the rendered size is at least 25KB smaller than the actual size, then the image fails the audit.
Strategies for properly sizing images
Ideally, your page should never serve images that are larger than the version that's rendered on the user's screen. Anything larger than that just results in wasted bytes and slows down page load time.
The main strategy for serving appropriately-sized images is called "responsive images". With responsive images, you generate multiple versions of each image, and then specify which version to use in your HTML or CSS using media queries, viewport dimensions, and so on. See Serve responsive images to learn more.
Another strategy is to use vector-based image formats, like SVG. With a finite amount of code, an SVG image can scale to any size. See Replace complex icons with SVG to learn more.
Tools like gulp-responsive or responsive-images-generator can help automate the process of converting an image into multiple formats. There are also image CDNs which let you generate multiple versions, either when you upload an image, or request it from your page.
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