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LKQ
(NASDAQ:LKQ)
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Rating:57Neutral
Price Target:
$26.00
▼(-16.45% Downside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by pressured profitability and uneven recent cash-flow momentum despite stable revenue and manageable leverage. Technicals are a notable drag with the stock trading below key moving averages and weak momentum. Valuation is mixed (solid yield but a mid-range P/E), while the latest earnings call was moderately supportive due to reaffirmed guidance and cost actions, tempered by margin and near-term cash flow headwinds.
Positive Factors
Scale & alternative-parts utilization
High alternative-parts utilization (~40%) reflects durable access to lower-cost recycled OEM inventory and supports margin dollars in collision aftermarket. Scale in sourcing and recycling gives LKQ a structural cost and availability advantage versus smaller distributors, sustaining competitiveness over months.
Negative Factors
Profitability & ROE compression
Sustained margin compression and lower ROE indicate reduced earnings power versus prior years, reflecting structural headwinds like tariff pass-through, mix shifts, and pricing pressure. Persistently lower profitability can constrain reinvestment and long-term shareholder returns absent structural margin recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Scale & alternative-parts utilization
High alternative-parts utilization (~40%) reflects durable access to lower-cost recycled OEM inventory and supports margin dollars in collision aftermarket. Scale in sourcing and recycling gives LKQ a structural cost and availability advantage versus smaller distributors, sustaining competitiveness over months.
Read all positive factors
LKQ Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where LKQ is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where LKQ is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
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The Fly
The FlyLKQ (LKQ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.89B
Dividend Yield4%
Average Volume (3M)3.27M
Price to Earnings (P/E)13.4
Beta (1Y)0.57
Revenue Growth-1.37%
EPS Growth-24.48%
CountryUS
Employees47,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)2.01
Shares Outstanding254,790,830
10 Day Avg. Volume3,068,768
30 Day Avg. Volume3,272,524
Financial Highlights & Ratios
PEG Ratio-1.21
Price to Book (P/B)1.18
Price to Sales (P/S)0.56
P/FCF Ratio9.12
Enterprise Value/Market Cap1.64
Enterprise Value/Revenue0.81
Enterprise Value/Gross Profit2.15
Enterprise Value/Ebitda8.19
Forecast
1Y Price Target
$38.33Price Target Upside23.18% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)2.97
Revenue Forecast (FY)$13.91B
LKQ Business Overview & Revenue Model
Company Description
LKQ Corporation, established in 1998 and headquartered in Chicago, Illinois, specializes in distributing replacement parts and systems essential for vehicle repair and maintenance. Its operations are structured across three primary segments: North...
How the Company Makes Money
LKQ makes money primarily by sourcing vehicle parts and selling them through distribution networks to professional repair channels. A major revenue stream comes from recycled OEM (original equipment manufacturer) parts: LKQ acquires salvage vehicl...
LKQ Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Neutral
The call presented a mixed but constructive picture: solid revenue growth (+4.3% YoY), sequential improvements in North America and parts of Europe, record alternative part utilization near 40%, and reaffirmed full-year guidance and cost-savings targets. Offsetting these positives were margin pressure from tariffs and mix, a Q1 free cash flow weakness (negative $96M), a GAAP impairment related to Mekonomen that reduced reported EPS, and continued softness in some European markets. Management emphasized operational discipline, strategic review activity, and early signs of recovery, but several headwinds remain that could temper near-term upside.Positive Updates
Consolidated Revenue Growth
Reported revenues of $3.5 billion, a 4.3% year-over-year increase, reflecting top-line momentum across the business.
Negative Updates
Adjusted EPS Decline and GAAP Impairment
GAAP diluted EPS of $0.30 included a $0.17 per-share impairment related to equity method investment in Mekonomen; adjusted diluted EPS was $0.67 versus $0.74 prior year (down).
Read all updates
Q1-2026 Updates
Positive
Negative
Consolidated Revenue Growth
Reported revenues of $3.5 billion, a 4.3% year-over-year increase, reflecting top-line momentum across the business.
Read all positive updates
Company Guidance
LKQ reaffirmed 2026 guidance with organic parts & services revenue of -0.5% to +1.5%, adjusted EPS of $2.90–$3.20 and free cash flow of $700M–$850M (GAAP EPS impacted by a $0.17/share Mekonomen impairment excluded from adjusted results). Q1 results that underpin the outlook included revenue of $3.5B (+4.3% YoY), GAAP diluted EPS $0.30, adjusted EPS $0.67 (vs. $0.74 LY), Q1 free cash flow -$96M (vs. -$57M LY), total debt $3.9B with 2.6x leverage, 5.0% effective interest rate, a $500M term loan current, $77M returned in dividends and $5M spent on two small European tuck-ins. Operational metrics called out were North America organic revenue -0.5% per day (improvement from -4.1% LY and -1% in Q4), North America segment EBITDA 14.1% (down 130 bps YoY, up 140 bps sequentially) and gross margin 42.4%; Europe segment EBITDA 7.8% (down 150 bps), Europe gross margin 38.3% and SG&A 30.9%; Specialty organic revenue +3.4% (EBITDA -$3M). Other key indicators cited: alternative parts utilization ≈40% (through Feb), private label penetration 25.3% (from 25.1%), calibration/diagnostic repair requirement ~75% (from 62% three years ago), used car values +3.6% in Q1 with March +6.2%, and management expects to realize >$50M of annual cost savings (mostly in 2026) while remaining cautious on timing of a broader market recovery.LKQ Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
68
Positive
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 13.92B | 13.92B | 14.36B | 13.87B | 12.79B | 13.09B |
| Gross Profit | 5.25B | 5.29B | 5.61B | 5.58B | 5.22B | 5.32B |
| EBITDA | 1.38B | 1.46B | 1.63B | 1.77B | 1.86B | 1.75B |
| Net Income | 517.00M | 607.00M | 690.00M | 936.00M | 1.15B | 1.09B |
Balance Sheet | ||||||
| Total Assets | 15.14B | 15.14B | 14.96B | 15.08B | 12.04B | 12.61B |
| Cash, Cash Equivalents and Short-Term Investments | 335.00M | 319.00M | 234.00M | 299.00M | 278.00M | 274.00M |
| Total Debt | 5.24B | 5.06B | 5.61B | 5.64B | 3.94B | 4.22B |
| Total Liabilities | 8.65B | 8.60B | 8.92B | 8.90B | 6.55B | 6.79B |
| Stockholders Equity | 6.47B | 6.54B | 6.02B | 6.17B | 5.45B | 5.77B |
Cash Flow | ||||||
| Free Cash Flow | 808.00M | 847.00M | 810.00M | 998.00M | 1.03B | 1.07B |
| Operating Cash Flow | 1.01B | 1.06B | 1.12B | 1.36B | 1.25B | 1.37B |
| Investing Cash Flow | 193.00M | 185.00M | -406.00M | -2.44B | 172.00M | -418.76M |
| Financing Cash Flow | -1.12B | -1.19B | -746.00M | 1.10B | -1.39B | -985.13M |
LKQ Technical Analysis
Neutral
31.12
Price Trends
27.31
Negative
29.02
Negative
29.53
Negative
Market Momentum
-0.16
Negative
56.39
Neutral
82.48
Negative
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 31.12 is above the 20-day moving average (MA) of 25.86, above the 50-day MA of 27.31, and above the 200-day MA of 29.53, indicating a neutral trend. The MACD of -0.16 indicates Negative momentum. The RSI at 56.39 is Neutral, neither overbought nor oversold. The STOCH value of 82.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LKQ.
LKQ Risk Analysis
LKQ disclosed 38 risk factors in its most recent earnings report. LKQ reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
LKQ Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $6.86B | 13.56 | 10.41% | 2.63% | 2.86% | 17.30% | |
72 Outperform | $8.92B | 12.75 | 27.78% | 2.60% | 6.14% | 7.30% | |
71 Outperform | $13.97B | 39.60 | 6.34% | 1.24% | 2.36% | 34.03% | |
71 Outperform | $4.02B | 21.58 | 13.06% | ― | 5.04% | -10.80% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $12.76B | 35.90 | 3.90% | ― | 5.20% | -71.83% | |
57 Neutral | $6.89B | 13.45 | 7.93% | 4.00% | -1.37% | -24.48% |
* Consumer Cyclical Sector Average
LKQ
LKQ
27.03
-8.49
-23.90%
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LKQ Corporate Events
Executive/Board ChangesShareholder Meetings
LKQ Shareholders Approve Governance Changes at Annual Meeting
Positive
May 8, 2026
LKQ held its Annual Meeting of shareholders on May 6, 2026, at which investors elected eight directors to serve terms ending in 2027 and ratified the appointment of Deloitte Touche LLP as the independent auditor for fiscal 2026. Shareholders also...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.