LKQ (LKQ) AI Stock Analysis

• Market Cap: $7.58B
• Dividend Yield: 4.07%
• Average Volume (3M): 2.85M
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.42
• Revenue Growth: -3.02%
• EPS Growth: -1.02%
• Country: US
• Employees: 47,000
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Auto - Parts
• EPS (TTM): 0.87
• Shares Outstanding: 257,293,180
• 10 Day Avg. Volume: 4,618,052
• 30 Day Avg. Volume: 2,846,406
• PEG Ratio: 7.87
• Price to Book (P/B): 1.28
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.30
• Enterprise Value/Market Cap: 1.84
• Enterprise Value/Revenue: 0.47
• Enterprise Value/Gross Profit: 4.98
• Enterprise Value/Ebitda: 3.99
• 1Y Price Target: $45.60
• Price Target Upside: 53.85% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 64 Neutral
• Price Target: $34.00 ▲(14.71%Upside)

LKQ's solid financial performance and attractive valuation are significant strengths, but these are offset by technical weakness and a challenging business environment as reflected in the earnings call. Continued focus on debt management and strategic initiatives is crucial for future growth.

Positive Factors

Financial Performance

The company exceeded expectations by demonstrating progress in operational excellence and platform integration initiatives, providing better visibility around forward EBITDA.

Market Position and Growth

LKQ is recognized as a market leader in alternative collision repair parts in North America, benefiting from unmatched scale and technological investments.

Shareholder Returns

LKQ Corporation returned over $150 million to shareholders, including $80 million in share repurchases and $78 million in dividends.

Negative Factors

Demand Environment

North America EBITDA margins are expected to face sustained headwinds from scale inefficiencies amidst a muted demand environment.

Lowered Guidance

LKQ reported Q2/25 financial results that were disappointing on the bottom line while also significantly lowering 2025 adjusted EPS guidance ranges.

Revenue Decline

Sales of $3.6 billion declined 1.9% while adjusted EPS declined 11.2% to $0.87.

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. The company operates in the automotive sector, focusing on offering a broad range of replacement systems, components, equipment, and parts to professional repair facilities, fleet operators, and do-it-yourself consumers. LKQ's core services include recycling, remanufacturing, and distributing automotive parts and accessories to both the aftermarket and the salvage industry.

How the Company Makes Money

LKQ Corporation makes money primarily through the sale of recycled, remanufactured, and new aftermarket auto parts. The company's revenue model is driven by several key streams: the distribution of replacement parts, the sale of recycled original equipment manufacturer (OEM) products, and specialty product lines such as accessories and performance parts. LKQ sources parts from vehicle dismantling operations and purchases from manufacturers, then sells these products through a network of distribution centers and retail outlets. Additionally, LKQ benefits from strategic partnerships with insurance companies and repair shops, which further bolster their sales volumes and market reach. The company's geographical diversification across North America, Europe, and other international markets provides a broad customer base and avenues for growth.

LKQ Financial Statement Overview

Summary

LKQ showcases solid financial health with strong profitability and operational efficiency. However, revenue growth has slowed, and rising debt levels might be a concern if unchecked. The company maintains a robust cash flow position, supporting its ability to finance operations and potentially invest in growth opportunities.

Income Statement

LKQ's income statement shows a stable gross profit margin at approximately 39.2% in TTM (Trailing-Twelve-Months). The net profit margin is healthy at 5.0%, though it has slightly decreased compared to the previous annual report. Revenue growth is modest, with a slight decline in TTM compared to the previous year, indicating some challenges in expanding sales. EBIT and EBITDA margins remain robust at 8.4% and 11.4% respectively, showcasing strong operational efficiency.

Balance Sheet

The company's balance sheet is reasonably strong, with a debt-to-equity ratio of 0.91, indicating a balanced approach to leverage. Return on equity (ROE) is solid at 10.8%, reflecting efficient equity utilization. The equity ratio is sound at 40.9%, suggesting a stable financial structure. However, the increasing debt levels could pose a risk if not managed properly.

Cash Flow

LKQ's cash flow statement displays healthy operating cash flow relative to net income, with a ratio of 1.34, indicating efficient cash generation from operations. Free cash flow has grown by 3.4% in TTM, which is positive but modest. The free cash flow to net income ratio is strong at 0.96, reflecting effective conversion of net income into free cash. Overall, cash flow management appears strong, but growth in free cash flow could be improved.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.36B	13.87B	12.79B	13.09B	11.63B
Gross Profit	5.61B	5.58B	5.22B	5.32B	4.59B
EBITDA	1.63B	1.74B	1.71B	1.75B	1.30B
Net Income	685.00M	936.00M	1.15B	1.09B	638.42M
Balance Sheet
Total Assets	14.96B	15.08B	12.04B	12.61B	12.36B
Cash, Cash Equivalents and Short-Term Investments	234.00M	299.00M	278.00M	274.13M	312.15M
Total Debt	5.61B	5.64B	3.94B	4.22B	4.29B
Total Liabilities	8.92B	8.90B	6.55B	6.82B	6.69B
Stockholders Equity	6.02B	6.17B	5.45B	5.77B	5.66B
Cash Flow
Free Cash Flow	810.00M	998.00M	1.03B	1.07B	1.27B
Operating Cash Flow	1.12B	1.36B	1.25B	1.37B	1.44B
Investing Cash Flow	-406.00M	-2.44B	172.00M	-418.76M	-165.89M
Financing Cash Flow	-746.00M	1.10B	-1.39B	-985.13M	-1.51B

LKQ Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 29.64
• 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 29.64 is below the 20-day moving average (MA) of 35.53, below the 50-day MA of 37.50, and below the 200-day MA of 38.49, indicating a bearish trend. The MACD of -2.25 indicates Positive momentum. The RSI at 21.93 is Positive, neither overbought nor oversold. The STOCH value of 3.03 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
ALV	75 Outperform	$8.57B	12.20	29.99%	2.49%	-0.98%	21.64%
DORM	74 Outperform	$3.68B	17.33	17.09%	―	6.03%	40.36%
ALSN	73 Outperform	$7.44B	10.22	50.15%	1.15%	3.86%	16.02%
BWA	72 Outperform	$8.09B	39.29	3.66%	1.17%	-2.12%	-69.42%
GNTX	66 Neutral	$5.94B	14.98	16.44%	1.82%	-1.66%	-9.20%
LKQ	64 Neutral	$7.58B	10.83	11.20%	4.07%	-3.02%	-1.02%
Sector *	62 Neutral	C$5.20B	8.26	20.23%	3.77%	3.13%	8.63%

LKQ Corporate Events

LKQ Amends Cooperation Agreement with Investors

On May 14, 2025, LKQ Corporation amended its Cooperation Agreement with Ancora Catalyst Institutional, LP, Engine Capital, LP, and their affiliates. The amendment stipulates that if the company’s board re-nominates Sue Gove and Michael Powell for re-election at the 2026 annual meeting, the investor parties will adhere to standstill restrictions and other provisions until certain dates in 2027, impacting the company’s governance and shareholder relations.

The most recent analyst rating on (LKQ) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on LKQ stock, see the LKQ Stock Forecast page.

LKQ Shareholders Approve Key Proposals at Annual Meeting

On May 7, 2025, LKQ held its Annual Meeting where shareholders voted on several key issues. Eleven directors were elected to serve until 2026, with nominees receiving varying levels of support. Additionally, Deloitte & Touche LLP was ratified as the independent registered public accounting firm for fiscal year 2025. Shareholders also approved the compensation of named executive officers and a proposal allowing shareholders with a 10% ownership threshold to call special meetings.