LKQ (LKQ) AI Stock Analysis

• Market Cap: $7.21B
• Dividend Yield: 4%
• Average Volume (3M): 2.24M
• Price to Earnings (P/E): 12.7
• Beta (1Y): 0.50
• Revenue Growth: -3.71%
• EPS Growth: -0.27%
• Country: US
• Employees: 47,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 0.59
• Shares Outstanding: 255,132,260
• 10 Day Avg. Volume: 2,606,966
• 30 Day Avg. Volume: 2,236,263
• PEG Ratio: -1.20
• Price to Book (P/B): 1.18
• Price to Sales (P/S): 0.56
• P/FCF Ratio: 9.12
• Enterprise Value/Market Cap: 1.66
• Enterprise Value/Revenue: 0.86
• Enterprise Value/Gross Profit: 2.26
• Enterprise Value/Ebitda: 8.23
• 1Y Price Target: $40.38
• Price Target Upside: 42.89% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 3.04
• Revenue Forecast (FY): $13.88B

• Rating: 68 Neutral
• Price Target: $31.00 ▲(9.70% Upside)
• Action: Reiterated Date: 02/20/26
• Date: Action: Reiterated 02/20/26

LKQ scores as a balanced opportunity: dependable cash flow and improving leverage are the main supports, reinforced by reasonable valuation and dividend yield. The key constraints are weakening margins and cautious 2026 outlook (tariffs, Europe softness, North America margin pressure), while technicals are only modestly supportive.

Positive Factors

Free Cash Flow Strength

Consistently strong free cash flow (FCF) provides durable coverage for operations, supports debt repayment, and funds dividends and buybacks. FCF above target demonstrates earnings quality and gives management flexibility to invest in efficiencies, pursue M&A, or return capital over multiple quarters.

Improving Leverage & Liquidity

Meaningful debt reduction and extended credit maturities materially lower refinancing and liquidity risk. Improved leverage enhances financial flexibility, reduces interest burden over time, and strengthens the company's ability to execute strategic initiatives or weather cyclical auto demand weakness without forcing asset sales.

Portfolio Focus & Specialty Recovery

Divesting non-core assets and focusing on higher-growth Specialty and core distribution sharpens strategy and can unlock value. Specialty's recent organic growth and transaction interest indicate a stronger, monetizable business line, enabling redeployment of capital to higher-return opportunities or debt reduction.

Negative Factors

Europe Demand & Profitability

Sustained weakness in Europe reflects structural demand softness and intensified pricing competition. Lower volumes and margin erosion in a large region undermine consolidated profitability and make operating leverage harder to realize, pressuring multi-quarter earnings and complicating recovery timelines.

North America Margin Pressure

Material margin deterioration in North America driven by tariffs, unfavorable customer mix, and lost overhead leverage indicates structural cost headwinds. If tariffs and mix effects persist, sustained margin compression will reduce free cash flow conversion and restrict long-term reinvestment or shareholder returns.

Top-line Volatility

Choppy and negative revenue trends weaken operating leverage and make medium-term planning harder. Conservative guidance signals management expects limited market recovery; prolonged stagnant or down top-line reduces margin recovery prospects and constrains sustainable earnings and cash-flow growth.

LKQ Business Overview & Revenue Model

Company Description

LKQ Corporation distributes replacement parts, components, and systems used in the repair and maintenance of vehicles. It operates through three segments: North America, Europe, and Specialty. The company distributes bumper covers, automotive body panels, and lights, as well as automotive glass products, such as windshields; salvage products, including mechanical and collision parts comprising engines; transmissions; door assemblies; sheet metal products, such as trunk lids, fenders, and hoods; lights and bumper assemblies; scrap metal and other materials to metals recyclers; and brake pads, discs and sensors, clutches, steering and suspension products, filters, and oil and automotive fluids, as well as electrical products, including spark plugs and batteries. In addition, the company distributes recreational vehicle appliances and air conditioners, towing hitches, truck bed covers, vehicle protection products, cargo management products, wheels, tires, and suspension products. It serves collision and mechanical repair shops, and new and used car dealerships, as well as retail customers. The company operates in the United States, Canada, the United Kingdom, Germany, Belgium, the Netherlands, Luxembourg, Italy, the Czech Republic, Austria, Poland, Slovakia, Taiwan, and other European countries. LKQ Corporation was incorporated in 1998 and is headquartered in Chicago, Illinois.

How the Company Makes Money

LKQ makes money primarily by selling vehicle replacement parts and related services through multiple product channels. A major revenue stream comes from recycled OE parts: LKQ acquires end-of-life and salvage vehicles, dismantles them, and sells usable components (e.g., body panels, engines, transmissions, lights, and other assemblies) to repairers and other customers; the company also monetizes remaining materials through scrap and commodity recovery where applicable. Another key stream is the distribution and sale of aftermarket parts—new, non-OE replacement components and consumables—sold to professional installers and retail-oriented customers through its distribution footprint. LKQ also generates revenue from specialty and other automotive product lines (where applicable in its operations), which can include performance, accessories, and related categories, sold via wholesale distribution and e-commerce channels. Across these activities, earnings are supported by scale in procurement (vehicle sourcing and parts purchasing), inventory management, logistics/distribution capabilities, and relationships with repair networks and other industry participants that drive consistent demand for replacement parts tied to collision repair and routine vehicle maintenance.

LKQ Financial Statement Overview

Summary

Overall fundamentals are solid, led by consistent operating and free-cash-flow generation and improving leverage in 2025. Offsetting this, revenue turned negative in 2025 and operating/net margins stepped down versus prior years, signaling weaker near-term earnings momentum.

Income Statement

Revenue has been choppy, with growth turning negative in 2025 after modest expansion in 2023–2024. Profitability has also softened: gross margin remains relatively steady (~39–40%), but operating and net margins have stepped down meaningfully from 2022–2023 levels into 2024–2025, alongside lower net income. Overall, the model still generates profits consistently, but the recent margin compression and 2025 revenue decline reduce confidence in near-term earnings momentum.

Balance Sheet

Leverage is moderate for the sector, with debt-to-equity improving in 2025 versus 2024 as equity increased and debt declined, which is a constructive balance-sheet trend. Returns on equity remain positive but have come down versus the 2021–2023 period, consistent with lower profitability. Assets have been stable, and while debt is meaningful, the capital structure does not appear overextended based on the provided leverage levels.

Cash Flow

Cash generation is a relative strength: operating cash flow and free cash flow are consistently positive across years, and 2025 free cash flow increased versus 2024. Free cash flow runs at a solid share of net income (~0.72–0.82 in recent years), supporting earnings quality. A notable watch item is that operating cash flow covers only about one-third to two-fifths of total debt in recent years, implying the company relies on sustained cash flow (and potentially refinancing capacity) to manage leverage comfortably.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	13.92B	14.36B	13.87B	12.79B	13.09B
Gross Profit	5.29B	5.61B	5.58B	5.22B	5.32B
EBITDA	1.46B	1.63B	1.77B	1.86B	1.75B
Net Income	607.00M	690.00M	936.00M	1.15B	1.09B
Balance Sheet
Total Assets	15.14B	14.96B	15.08B	12.04B	12.61B
Cash, Cash Equivalents and Short-Term Investments	319.00M	234.00M	299.00M	278.00M	274.00M
Total Debt	5.06B	5.61B	5.64B	3.94B	4.22B
Total Liabilities	8.60B	8.92B	8.90B	6.55B	6.79B
Stockholders Equity	6.54B	6.02B	6.17B	5.45B	5.77B
Cash Flow
Free Cash Flow	847.00M	810.00M	998.00M	1.03B	1.07B
Operating Cash Flow	1.06B	1.12B	1.36B	1.25B	1.37B
Investing Cash Flow	185.00M	-406.00M	-2.44B	172.00M	-418.76M
Financing Cash Flow	-1.19B	-746.00M	1.10B	-1.39B	-985.13M

LKQ Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.26
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LKQ, the sentiment is Negative. The current price of 28.26 is below the 20-day moving average (MA) of 30.84, below the 50-day MA of 32.28, and below the 200-day MA of 31.77, indicating a bearish trend. The MACD of -1.11 indicates Positive momentum. The RSI at 28.29 is Positive, neither overbought nor oversold. The STOCH value of 14.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LKQ.

LKQ Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LEA	72 Outperform	$5.76B	14.06	8.79%	2.63%	-1.90%	-13.86%
ALV	69 Neutral	$7.50B	12.37	29.57%	2.60%	0.84%	26.17%
LKQ	68 Neutral	$7.21B	12.73	9.42%	4.00%	-3.71%	-0.27%
DORM	65 Neutral	$3.08B	18.56	14.34%	―	7.94%	34.84%
BWA	62 Neutral	$10.81B	35.20	4.80%	1.24%	0.08%	-83.69%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
APTV	56 Neutral	$14.49B	101.80	1.78%	―	2.16%	-85.91%

LKQ Corporate Events

LKQ Announces Planned Transition in Board Leadership

On March 3, 2026, LKQ Corporation announced that board member Patrick Berard has chosen not to stand for re-election to the company’s Board of Directors. He will remain in his role until LKQ’s 2026 Annual Meeting of Stockholders, expected in May 2026, marking a planned transition in the company’s board composition and governance structure.

The most recent analyst rating on (LKQ) stock is a Buy with a $37.00 price target. To see the full list of analyst forecasts on LKQ stock, see the LKQ Stock Forecast page.

LKQ Board Initiates Strategic Alternatives Review Including Sale

On January 26, 2026, LKQ Corporation announced that its board of directors has launched a comprehensive review of strategic alternatives aimed at enhancing shareholder value, including the possibility of selling the company. The board, working with BofA Securities as financial advisor and Wachtell, Lipton, Rosen & Katz as legal counsel, is assessing options to unlock value it believes is not fully reflected in LKQ’s current market valuation, while separately continuing a previously announced process to explore a potential sale of its Specialty segment; the company emphasized that there is no set timetable and no assurance the review will result in a transaction, signaling a period of strategic uncertainty but potentially significant implications for shareholders and the company’s future structure.

The most recent analyst rating on (LKQ) stock is a Buy with a $38.00 price target. To see the full list of analyst forecasts on LKQ stock, see the LKQ Stock Forecast page.