LKQ (LKQ) AI Stock Analysis

• Market Cap: $8.22B
• Dividend Yield: 4%
• Average Volume (3M): 2.35M
• Price to Earnings (P/E): 13.7
• Beta (1Y): 0.45
• 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: 2,276,954
• 30 Day Avg. Volume: 2,348,600
• 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: 1.58
• Enterprise Value/Revenue: 0.93
• Enterprise Value/Gross Profit: 2.45
• Enterprise Value/Ebitda: 8.90
• 1Y Price Target: $39.60
• Price Target Upside: 22.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 3.04
• Revenue Forecast (FY): $13.88B

• Rating: 68 Neutral
• Price Target: $37.00 ▲(14.84% 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 Generation

Consistent, above-target free cash flow provides durable internal funding to pay down debt, fund restructuring and cost programs, and support capital returns. Strong FCF underpins financial flexibility through cycles and reduces reliance on external financing for strategic moves.

Balance Sheet Improvement

Meaningful debt paydown and lower leverage materially improve solvency and refinancing optionality. A stronger capital structure supports continued investment in operations, ability to pursue strategic alternatives, and lowers interest/financial risk over a multi-quarter horizon.

Portfolio Simplification & Specialty Momentum

Exiting non-core assets and a growing Specialty unit sharpen strategic focus and create optionality. Specialty's improving organic growth plus a potential sale can unlock capital, let management redeploy proceeds to core operations, and raise long-term returns.

Negative Factors

European Demand and Margin Weakness

Sustained European revenue declines and material margin erosion reflect weak demand, higher input costs, and aggressive pricing. These structural issues require significant productivity and SKU rationalization, risking prolonged margin recovery and pressuring consolidated profitability.

North America Margin Pressure

Substantial margin compression from tariffs, adverse customer mix and lost overhead leverage indicates structural headwinds to profitability. Unless volumes or pricing recover, sustained margin pressure will limit operating cash flow conversion and reinvestment capacity.

Top-line Volatility and Cautious Outlook

Choppy revenue trends and conservative guidance highlight persistent demand uncertainty (repairable claims, tariffs). Limited top-line visibility constrains long-term margin leverage and the pace at which restructuring or portfolio actions can restore sustained 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 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

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: 32.22
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 32.22 is below the 20-day moving average (MA) of 33.58, below the 50-day MA of 32.67, and below the 200-day MA of 32.73, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 42.89 is Neutral, neither overbought nor oversold. The STOCH value of 36.55 is Neutral, 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	$6.27B	15.17	9.21%	2.63%	-1.90%	-13.86%
ALV	71 Outperform	$8.45B	11.83	30.32%	2.60%	0.84%	26.17%
LKQ	68 Neutral	$8.22B	13.68	9.78%	4.00%	-3.71%	-0.27%
DORM	65 Neutral	$3.51B	17.51	14.74%	―	7.94%	34.84%
BWA	62 Neutral	$11.21B	42.28	5.05%	1.24%	0.08%	-83.69%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
APTV	55 Neutral	$15.19B	56.69	3.25%	―	2.16%	-85.91%

LKQ Corporate Events

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.

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.

The most recent analyst rating on (LKQ) stock is a Buy with a $39.00 price target. To see the full list of analyst forecasts on LKQ stock, see the LKQ Stock Forecast page.

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.

The most recent analyst rating on (LKQ) stock is a Hold with a $33.00 price target. To see the full list of analyst forecasts on LKQ stock, see the LKQ Stock Forecast page.