LKQ (LKQ) AI Stock Analysis

• Market Cap: $8.26B
• Dividend Yield: 3.65%
• Average Volume (3M): 4.06M
• Price to Earnings (P/E): 11.8
• Beta (1Y): 0.45
• Revenue Growth: -3.02%
• EPS Growth: -1.02%
• Country: US
• Employees: 47,000
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Auto - Parts
• EPS (TTM): 0.87
• Shares Outstanding: 257,293,180
• 10 Day Avg. Volume: 5,800,108
• 30 Day Avg. Volume: 4,063,199
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.84
• Enterprise Value/Revenue: 1.08
• Enterprise Value/Gross Profit: 2.76
• Enterprise Value/Ebitda: 9.43
• 1Y Price Target: $43.67
• Price Target Upside: 32.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 69 Neutral
• Price Target: $34.00 ▲(3.28% Upside)

LKQ's overall stock score reflects solid financial performance and attractive valuation, tempered by technical indicators suggesting bearish momentum. Strategic initiatives and corporate events are positive, but challenges in revenue growth and economic pressures, particularly in Europe, weigh on the outlook.

Positive Factors

Strategic Asset Sale

The sale of the 'Pick Your Part' segment allows LKQ to simplify its corporate structure and focus on core segments, enhancing market positioning and shareholder value. Proceeds will strengthen the balance sheet through debt repayment, supporting long-term financial health.

Cash Flow Management

Efficient cash flow management ensures LKQ can finance operations and invest in growth opportunities, supporting long-term sustainability and operational resilience.

Leadership Transition

The appointment of John Mendel as Chairman supports LKQ's strategic priorities and corporate governance, leveraging his extensive industry experience to drive growth and enhance shareholder value.

Negative Factors

Revenue Decline

Declining revenue and margin pressure indicate challenges in maintaining sales growth and profitability, potentially impacting LKQ's ability to invest in future growth and sustain competitive advantages.

European Market Challenges

Economic and competitive pressures in Europe pose significant challenges, potentially affecting LKQ's market share and profitability in a key region, necessitating strategic adjustments to sustain growth.

Rising Debt Levels

Rising debt levels could strain LKQ's financial flexibility and cash flow, limiting its ability to invest in growth opportunities and potentially impacting long-term stability if not managed effectively.

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 generates revenue through multiple key streams, primarily by selling alternative automotive parts and services. The company's main revenue sources include the sale of used and refurbished parts, aftermarket components, and recycled materials. Additionally, LKQ earns income from its logistics and distribution services, which allow it to efficiently manage inventory and deliver products to customers. Significant partnerships with automotive repair shops, insurers, and auto manufacturers also enhance its market presence and contribute to revenue growth. The increasing demand for cost-effective and sustainable automotive parts further supports LKQ's business model.

LKQ Financial Statement Overview

Summary

LKQ demonstrates 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	14.05B	14.36B	13.87B	12.79B	13.09B	11.63B
Gross Profit	5.51B	5.61B	5.58B	5.22B	5.32B	4.59B
EBITDA	1.61B	1.63B	1.74B	1.71B	1.75B	1.30B
Net Income	709.00M	685.00M	936.00M	1.15B	1.09B	638.42M
Balance Sheet
Total Assets	15.94B	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	5.92B	5.61B	5.64B	3.94B	4.22B	4.29B
Total Liabilities	9.40B	8.92B	8.90B	6.55B	6.79B	6.67B
Stockholders Equity	6.52B	6.02B	6.17B	5.45B	5.77B	5.66B
Cash Flow
Free Cash Flow	676.00M	810.00M	998.00M	1.03B	1.07B	1.27B
Operating Cash Flow	948.00M	1.12B	1.36B	1.25B	1.37B	1.44B
Investing Cash Flow	-327.00M	-406.00M	-2.44B	172.00M	-418.76M	-165.89M
Financing Cash Flow	-639.00M	-746.00M	1.10B	-1.39B	-985.13M	-1.51B

LKQ Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 32.92
• 50DMA: Negative
• 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 32.92 is above the 20-day moving average (MA) of 31.82, below the 50-day MA of 33.08, and below the 200-day MA of 37.31, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 56.88 is Neutral, neither overbought nor oversold. The STOCH value of 65.77 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	79 Outperform	$9.63B	13.72	29.99%	2.35%	-0.98%	21.64%
APTV	79 Outperform	$17.77B	13.52	15.52%	―	-2.47%	-43.12%
LEA	76 Outperform	$5.81B	12.65	9.51%	2.82%	-3.12%	-8.23%
DORM	76 Outperform	$4.86B	21.66	17.38%	―	6.76%	34.97%
LKQ	69 Neutral	$8.26B	11.79	11.20%	3.65%	-3.02%	-1.02%
BWA	67 Neutral	$9.60B	46.09	3.66%	1.13%	-2.12%	-69.42%
Sector *	61 Neutral	$18.09B	12.97	-1.60%	2.98%	1.42%	-15.92%

LKQ Corporate Events

LKQ Announces Sale of ‘Pick Your Part’ Segment

On August 25, 2025, LKQ Corporation announced a definitive agreement to sell its Self Service segment, known as ‘Pick Your Part,’ to an affiliate of Pacific Avenue Capital Partners, LLC for $410 million. This transaction is part of LKQ’s strategic plan to simplify its corporate structure and focus on core segments, aiming to enhance its market positioning and shareholder value. The sale, expected to close in the fourth quarter of 2025, will allow LKQ to strengthen its balance sheet through debt repayment.

LKQ Announces New Chairman Amid Leadership Transition

On August 20, 2025, LKQ Corporation announced that Guhan Subramanian would step down as Chairman of the Board, with John Mendel appointed as his successor effective immediately. Subramanian will retire from the board on January 1, 2026. This leadership change is part of LKQ’s efforts to enhance corporate governance and strategic priorities, with Mendel bringing extensive experience from the automotive industry. The transition is expected to support LKQ’s focus on simplifying its business portfolio, implementing a leaner operating model, and investing in growth opportunities, aiming to capture greater market share and enhance shareholder value.