LKQ (LKQ) AI Stock Analysis

• Market Cap: $7.74B
• Dividend Yield: 4%
• Average Volume (3M): 5.09M
• Price to Earnings (P/E): 11.1
• Beta (1Y): 0.42
• Revenue Growth: -3.71%
• EPS Growth: -0.27%
• Country: US
• Employees: 47,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): 0.84
• Shares Outstanding: 255,966,000
• 10 Day Avg. Volume: 9,850,559
• 30 Day Avg. Volume: 5,094,628
• PEG Ratio: -0.56
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 0.67
• P/FCF Ratio: 11.96
• Enterprise Value/Market Cap: 1.69
• Enterprise Value/Revenue: 0.94
• Enterprise Value/Gross Profit: 2.40
• Enterprise Value/Ebitda: 8.29
• 1Y Price Target: $41.25
• Price Target Upside: 37.55% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 3.11
• Revenue Forecast (FY): $13.81B

• Rating: 68 Neutral
• Price Target: $32.00 ▲(6.70% Upside)

LKQ's overall stock score reflects a stable financial position with attractive valuation metrics. The company's strategic moves, such as divestments and credit facility extensions, are positive. However, declining margins and revenue growth, along with mixed technical indicators, present challenges that need to be addressed for improved future performance.

Positive Factors

Strategic Divestment

The divestment simplifies LKQ's business, reduces debt, and strengthens the balance sheet, enhancing long-term financial stability.

Liquidity Improvement

Extending credit facilities enhances LKQ's liquidity profile, providing financial flexibility for future strategic initiatives.

Specialty Segment Growth

Growth in the Specialty segment indicates strong demand and effective market positioning, contributing to long-term revenue potential.

Negative Factors

Declining Margins

Declining margins indicate cost pressures and may impact profitability, requiring strategic adjustments to sustain earnings.

European Revenue Decline

Revenue decline in Europe due to political uncertainty and weak consumer confidence poses a challenge to LKQ's growth in the region.

Pressure on Margins

Margin pressure from higher input costs and overhead expenses could affect LKQ's profitability and competitive positioning.

LKQ Business Overview & Revenue Model

Company Description

LKQ Corporation is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. Operating primarily in the automotive aftermarket, LKQ offers a wide range of products including recycled original equipment manufacturer (OEM) parts, aftermarket parts, and remanufactured parts. The company serves various sectors, including collision repair, mechanical repair, and automotive recycling, with a focus on sustainability through the use of recycled materials.

How the Company Makes Money

LKQ generates revenue through multiple streams primarily centered around the sale of automotive parts. The company earns money by selling recycled and aftermarket parts to collision repair shops, mechanical repair businesses, and retail customers. Key revenue streams include the sale of used parts sourced from vehicle recycling operations, aftermarket parts produced by third-party manufacturers, and remanufactured components. Additionally, LKQ benefits from strategic partnerships with suppliers and manufacturers that enable it to expand its product offerings and enhance its market reach. The company's extensive distribution network and e-commerce platforms also contribute to efficient sales and customer service, further boosting its earnings potential.

LKQ Financial Statement Overview

Summary

LKQ's financial performance is stable but shows areas of concern. The income statement reflects declining margins and negative revenue growth, which could impact future profitability. The balance sheet is solid with manageable leverage, but the return on equity has decreased. Cash flow generation is robust, although there are signs of pressure in converting earnings to cash.

Income Statement

LKQ's income statement shows a mixed performance. The gross profit margin is strong at around 39%, indicating efficient cost management. However, the net profit margin has declined to approximately 5% in the TTM, suggesting pressure on net earnings. Revenue growth has been negative recently, which is a concern for future top-line expansion. The EBIT and EBITDA margins have also decreased, reflecting potential operational challenges.

Balance Sheet

The balance sheet of LKQ is relatively stable. The debt-to-equity ratio has improved slightly to 0.84 in the TTM, indicating a manageable level of leverage. Return on equity has decreased to 11%, which is lower than previous years but still reasonable. The equity ratio remains healthy, suggesting a solid capital structure.

Cash Flow

LKQ's cash flow statement shows some positive signs with a 6.8% growth in free cash flow in the TTM. However, the operating cash flow to net income ratio has decreased, indicating potential challenges in converting earnings into cash. The free cash flow to net income ratio remains strong at 74.6%, highlighting good cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.96B	14.36B	13.87B	12.79B	13.09B	11.63B
Gross Profit	5.46B	5.61B	5.58B	5.22B	5.32B	4.59B
EBITDA	1.58B	1.63B	1.77B	1.86B	1.75B	1.31B
Net Income	697.00M	690.00M	936.00M	1.15B	1.09B	638.42M
Balance Sheet
Total Assets	15.60B	14.96B	15.08B	12.04B	12.61B	12.36B
Cash, Cash Equivalents and Short-Term Investments	289.00M	234.00M	299.00M	278.00M	274.00M	312.15M
Total Debt	5.50B	5.61B	5.64B	3.94B	4.22B	4.29B
Total Liabilities	9.05B	8.92B	8.90B	6.55B	6.79B	6.67B
Stockholders Equity	6.55B	6.02B	6.17B	5.45B	5.77B	5.66B
Cash Flow
Free Cash Flow	722.00M	810.00M	998.00M	1.03B	1.07B	1.27B
Operating Cash Flow	968.00M	1.12B	1.36B	1.25B	1.37B	1.44B
Investing Cash Flow	-250.00M	-406.00M	-2.44B	172.00M	-418.76M	-165.89M
Financing Cash Flow	-792.00M	-746.00M	1.10B	-1.39B	-985.13M	-1.51B

LKQ Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 29.99
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LKQ, the sentiment is Neutral. The current price of 29.99 is above the 20-day moving average (MA) of 29.74, above the 50-day MA of 29.96, and below the 200-day MA of 34.30, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 50.83 is Neutral, neither overbought nor oversold. The STOCH value of 44.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LKQ.

LKQ Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALV	78 Outperform	$9.15B	12.41	31.09%	2.59%	0.84%	26.17%
DORM	75 Outperform	$3.82B	15.63	18.19%	―	7.94%	34.84%
LEA	75 Outperform	$6.12B	14.33	8.96%	2.61%	-1.90%	-13.86%
APTV	70 Outperform	$16.68B	60.63	3.25%	―	2.16%	-85.91%
LKQ	68 Neutral	$7.74B	11.13	10.87%	4.00%	-3.71%	-0.27%
BWA	65 Neutral	$9.72B	72.38	2.24%	1.24%	0.08%	-83.69%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

LKQ Corporate Events

LKQ extends key credit facilities, strengthens liquidity profile

On December 17, 2025, LKQ Corporation amended its main revolving credit facility and a related term loan, extending the revolving credit maturity date to December 17, 2030 while leaving the term loan maturity at January 5, 2027, and separately pushing the maturity of its CAD-denominated term loan to March 17, 2029 with certain conforming changes; other material terms of both agreements remain unchanged, effectively lengthening the company’s debt maturities and reinforcing its liquidity profile. Earlier, on November 26, 2025, LKQ had executed non‑material amendments to the same credit agreements to update the definition of a UK joint venture and align the CAD term loan with those changes, and chose to disclose these adjustments now to give investors a fuller picture of its amended credit and term loan arrangements.

LKQ Explores Sale of Specialty Segment

On December 4, 2025, LKQ Corporation announced it has begun exploring the potential sale of its Specialty segment, a leading distributor of automotive, RV, and marine parts in North America. This move is part of LKQ’s ongoing strategy to simplify its portfolio and focus on core segments, following the successful sale of its Self-Service segment. The company aims to maximize the value of the Specialty segment in favorable market conditions and intends to allocate any proceeds in line with its capital allocation framework, including share repurchases. LKQ has engaged Bank of America and Wachtell, Lipton, Rosen & Katz to assist with the process, though no definitive timetable for the sale has been set.

LKQ Board Member Jody G. Miller Resigns

On November 2, 2025, Jody G. Miller, a member of the Board of Directors of LKQ Corporation, announced her decision to resign from the board, effective January 1, 2026. This departure may impact the company’s governance and strategic direction as it adjusts to the change in its leadership team.

LKQ Completes Sale of Self Service Segment

On October 1, 2025, LKQ Corporation announced the completion of its sale of the Self Service segment, known as ‘Pick Your Part,’ to an affiliate of Pacific Avenue Capital Partners, LLC for $410 million. This strategic move aims to simplify LKQ’s business portfolio, reduce costs, and strengthen its balance sheet through debt repayment. The company will report the Self Service segment as discontinued operations in its financial statements starting from the third quarter of 2025.