LKQ (LKQ) AI Stock Analysis

• Market Cap: $10.17B
• Dividend Yield: 3.04%
• Average Volume (3M): 2.72M
• Price to Earnings (P/E): 14.8
• Beta (1Y): 0.40
• Revenue Growth: -0.74%
• EPS Growth: -13.75%
• Country: US
• Employees: 47,000
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Auto - Parts
• EPS (TTM): 0.79
• Shares Outstanding: 258,147,670
• 10 Day Avg. Volume: 2,965,230
• 30 Day Avg. Volume: 2,723,501
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.64
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 2.97
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $53.00
• Price Target Upside: 32.17% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

LKQ's overall stock score reflects its strong financial performance and effective cash flow management. While the company faces challenges in revenue growth and leverage, its strategic initiatives and fair valuation support a balanced outlook. The stable technical indicators and positive dividend yield also contribute to the stock's appeal.

Positive Factors

Financial Performance

LKQ's Q1/25 results showed better-than-expected bottom-line performance due to strategic cost actions and the exit from underperforming businesses.

Market Position

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 through share repurchases and dividends, showcasing a strong commitment to rewarding investors.

Negative Factors

Demand Headwinds

Slower-than-anticipated recovery in collision repair volumes and associated scale inefficiencies are impacting EBITDA margins.

Guidance and Forecast

Sustained unfavorable industry trends are likely to prompt management to guide conservatively for the full year ahead, potentially leading to downside revisions to EPS estimates.

Revenue Decline

European revenue decreased by 7.4% to $1.52 billion due to economic issues, heightened competition, and one fewer selling day in the quarter.

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 Corporation makes money primarily through the sale of automotive parts and accessories. Its revenue streams are diversified across several segments: North America, Europe, and Specialty. In North America and Europe, LKQ generates income by providing recycled, aftermarket, and refurbished automotive parts to repair shops and dealerships, capitalizing on the cost-effectiveness of these alternatives to new OEM parts. The Specialty segment focuses on providing accessories and performance parts for classic, custom, and off-road vehicles. Additionally, LKQ benefits from strategic acquisitions and partnerships that expand its product offerings and market reach, contributing to its earnings. The company also leverages its extensive distribution network and efficient supply chain to enhance its profitability.

LKQ Financial Statement Overview

Summary

LKQ exhibits solid financial health with stable profitability and efficient cash flow management. The company maintains strong margins and a balanced capital structure, though revenue growth has been modest, and leverage could be better managed.

Income Statement

LKQ has demonstrated stable financial performance with a solid gross profit margin of 38.63% in TTM. The net profit margin stands at 4.94%, showing profitability, though it has declined from previous years. Revenue growth has been modest, with a slight decrease over the past year. EBIT and EBITDA margins are healthy, indicating efficient operations, though EBIT margin has seen some pressure.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.95, suggesting a balanced capital structure. Return on equity (ROE) has decreased to 11.29% in TTM, indicating reduced profitability from equity. The equity ratio of 39.91% shows a reasonable level of financial stability, though there's room for improvement in reducing leverage.

Cash Flow

LKQ's cash flow is robust, with a strong operating cash flow to net income ratio of 1.24, indicating effective cash generation from operations. However, free cash flow has decreased slightly. The free cash flow to net income ratio of 0.81 shows good cash conversion, despite the recent decline in free cash flow growth.

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
	EBIT
1.20B	1.36B	1.58B	1.47B	985.58M
	EBITDA
1.63B	1.74B	1.71B	1.75B	1.30B
	Net Income Common Stockholders
685.00M	936.00M	1.15B	1.09B	638.42M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
234.00M	299.00M	278.00M	274.13M	312.15M
	Total Assets
14.96B	15.08B	12.04B	12.61B	12.36B
	Total Debt
5.61B	5.64B	3.94B	4.22B	4.29B
	Net Debt
5.38B	5.34B	3.66B	3.95B	3.98B
	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: Positive
• Last Price: 40.10
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LKQ, the sentiment is Positive. The current price of 40.1 is above the 20-day moving average (MA) of 39.92, below the 50-day MA of 40.98, and above the 200-day MA of 39.12, indicating a neutral trend. The MACD of -0.41 indicates Negative momentum. The RSI at 50.95 is Neutral, neither overbought nor oversold. The STOCH value of 90.09 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LKQ.

LKQ Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DORM	79 Outperform	$3.52B	18.71	17.09%	―	6.03%	40.36%
ALSN	77 Outperform	$8.18B	11.41	50.15%	1.03%	3.86%	16.02%
ALV	74 Outperform	$7.21B	10.89	28.71%	2.90%	-2.29%	35.00%
LKQ	73 Outperform	$10.17B	14.75	11.37%	3.04%	-0.74%	-13.75%
BWA	72 Outperform	$6.37B	19.59	5.38%	1.45%	-8.22%	-52.61%
GNTX	66 Neutral	$4.86B	12.66	15.90%	2.17%	-1.66%	-9.20%
Sector *	61 Neutral	$6.66B	11.77	3.06%	3.96%	2.60%	-21.54%

LKQ Corporate Events

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.

Spark’s Take on LKQ Stock

According to Spark, TipRanks’ AI Analyst, LKQ is a Neutral.

LKQ’s overall stock score reflects its solid financial performance and reasonable valuation. However, technical indicators are currently negative, and the recent earnings call highlighted challenges in revenue growth and potential tariff impacts. The company’s strategic initiatives and governance improvements offer potential upside.

To see Spark’s full report on LKQ stock, click here.