LKQ (NasdaqGS:LKQ) - Share price, News & Analysis

Q: What is the Fair Price of LKQ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

LKQ ($50.92) is trading below our estimate of [[fair value]] ($81.47)

LKQ fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	4/6
Financial Health	5/6
Dividends	3/6

LKQ Stock Overview

LKQ Corporation distributes replacement parts, components, and systems used in the repair and maintenance of vehicles.

Rewards

Trading at 37.5% below our estimate of its fair value

Earnings have grown 17% per year over the past 5 years

Risk Analysis

Has a high level of debt

Unstable dividend track record

LKQ Competitors

Genuine Parts

NYSE:GPC

US$19.4b

Pool

NasdaqGS:POOL

US$14.3b

Microalliance Group

OTCPK:FHAI

US$1.9b

Funko

NasdaqGS:FNKO

US$1.2b

Price History & Performance

Summary of all time highs, changes and price drops for LKQ
Historical stock prices
Current Share Price	US$50.92
52 Week High	US$60.43
52 Week Low	US$42.36
Beta	1.46
1 Month Change	-2.71%
3 Month Change	7.63%
1 Year Change	4.80%
3 Year Change	88.24%
5 Year Change	52.87%
Change since IPO	2,615.73%

Recent News & Updates

Jun 27

An Intrinsic Calculation For LKQ Corporation (NASDAQ:LKQ) Suggests It's 39% Undervalued

How far off is LKQ Corporation ( NASDAQ:LKQ ) from its intrinsic value? Using the most recent financial data, we'll...

Jun 13

Here's What To Make Of LKQ's (NASDAQ:LKQ) Decelerating Rates Of Return

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly...

May 22

LKQ Corporation: Still Attractive Despite The Pain

LKQ Corporation has not fared well, with shares of the business following the broader market down in recent months. Some financial performance is likely to suffer this year relative to last year, but overall revenue is slated to rise. Add on top of this how attractive shares look, and investors would be wise to consider a stake in the enterprise.

May 11

Is Now An Opportune Moment To Examine LKQ Corporation (NASDAQ:LKQ)?

LKQ Corporation ( NASDAQ:LKQ ) saw a double-digit share price rise of over 10% in the past couple of months on the...

Shareholder Returns

	LKQ	US Retail Distributors	US Market
7D	8.5%	7.1%	6.3%
1Y	4.8%	-2.2%	-18.8%

Return vs Industry: LKQ exceeded the US Retail Distributors industry which returned -3.8% over the past year.

Return vs Market: LKQ exceeded the US Market which returned -18.4% over the past year.

Price Volatility

Is LKQ's price volatile compared to industry and market?
LKQ volatility
LKQ Average Weekly Movement	4.9%
Retail Distributors Industry Average Movement	8.5%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: LKQ is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: LKQ's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1998	46,000	Nick Zarcone	https://www.lkqcorp.com

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.

LKQ Fundamentals Summary

How do LKQ's earnings and revenue compare to its market cap?
LKQ fundamental statistics
Market Cap	US$14.40b
Earnings (TTM)	US$1.09b
Revenue (TTM)	US$13.27b

13.2x

P/E Ratio

1.1x

P/S Ratio

Is LKQ overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LKQ income statement (TTM)
Revenue	US$13.27b
Cost of Revenue	US$7.88b
Gross Profit	US$5.38b
Other Expenses	US$4.29b
Earnings	US$1.09b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Jul 28, 2022

Earnings per share (EPS)	3.87
Gross Margin	40.59%
Net Profit Margin	8.24%
Debt/Equity Ratio	45.7%

How did LKQ perform over the long term?

See historical performance and comparison

Dividends

2.0%

Current Dividend Yield

13%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is LKQ undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LKQ?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for LKQ. This is calculated by dividing LKQ's market cap by their current preferred multiple.
What is LKQ's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$14.40b

LKQ key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.4x
Enterprise Value/EBITDA	10.4x
PEG Ratio	8.4x

Price to Earnings Ratio vs Peers

How does LKQ's PE Ratio compare to its peers?

LKQ PE Ratio vs Peers

The above table shows the PE ratio for LKQ vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	40.2x
GPC Genuine Parts	20.9x	8.0%	US$19.4b
POOL Pool	19.7x	5.7%	US$14.3b
FHAI Microalliance Group	96.3x	n/a	US$1.9b
FNKO Funko	23.8x	35.0%	US$1.2b
LKQ LKQ	13.2x	1.6%	US$14.4b

Forward PE

Price-To-Earnings vs Peers: LKQ is good value based on its Price-To-Earnings Ratio (13.2x) compared to the peer average (40.2x).

Price to Earnings Ratio vs Industry

How does LKQ's PE Ratio compare vs other companies in the Global Retail Distributors Industry?

Price-To-Earnings vs Industry: LKQ is good value based on its Price-To-Earnings Ratio (13.2x) compared to the US Retail Distributors industry average (16.3x)

Price to Earnings Ratio vs Fair Ratio

What is LKQ's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LKQ PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	13.2x
Fair PE Ratio	13.1x

Price-To-Earnings vs Fair Ratio: LKQ is expensive based on its Price-To-Earnings Ratio (13.2x) compared to the estimated Fair Price-To-Earnings Ratio (13.1x).

Share Price vs Fair Value

What is the Fair Price of LKQ when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LKQ ($50.92) is trading below our estimate of fair value ($81.47)

Significantly Below Fair Value: LKQ is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: LKQ is poor value based on its PEG Ratio (8.4x)

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Future Growth

How is LKQ forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

1.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LKQ's forecast earnings growth (1.6% per year) is below the savings rate (1.9%).

Earnings vs Market: LKQ's earnings (1.6% per year) are forecast to grow slower than the US market (13.9% per year).

High Growth Earnings: LKQ's earnings are forecast to grow, but not significantly.

Revenue vs Market: LKQ's revenue (2.6% per year) is forecast to grow slower than the US market (8.4% per year).

High Growth Revenue: LKQ's revenue (2.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LKQ's Return on Equity is forecast to be low in 3 years time (17.8%).

Discover growth companies

Past Performance

How has LKQ performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

17.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LKQ has high quality earnings.

Growing Profit Margin: LKQ's current net profit margins (8.2%) are higher than last year (6.4%).

Past Earnings Growth Analysis

Earnings Trend: LKQ's earnings have grown by 17% per year over the past 5 years.

Accelerating Growth: LKQ's earnings growth over the past year (44.1%) exceeds its 5-year average (17% per year).

Earnings vs Industry: LKQ earnings growth over the past year (44.1%) underperformed the Retail Distributors industry 67.1%.

Return on Equity

High ROE: LKQ's Return on Equity (18.8%) is considered low.

Discover strong past performing companies

Financial Health

How is LKQ's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LKQ's short term assets ($4.7B) exceed its short term liabilities ($2.5B).

Long Term Liabilities: LKQ's short term assets ($4.7B) exceed its long term liabilities ($4.5B).

Debt to Equity History and Analysis

Debt Level: LKQ's net debt to equity ratio (40.1%) is considered high.

Reducing Debt: LKQ's debt to equity ratio has reduced from 84% to 45.7% over the past 5 years.

Debt Coverage: LKQ's debt is well covered by operating cash flow (47.1%).

Interest Coverage: LKQ's interest payments on its debt are well covered by EBIT (24x coverage).

Balance Sheet

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Dividend

What is LKQ current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.96%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: LKQ's dividend (1.96%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: LKQ's dividend (1.96%) is low compared to the top 25% of dividend payers in the US market (4.23%).

Stability and Growth of Payments

Stable Dividend: Too early to tell whether LKQ's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if LKQ's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (13.4%), LKQ's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (30%), LKQ's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.7yrs

Average management tenure

CEO

Nick Zarcone (63 yo)

5.08yrs

Tenure

US$9,445,636

Compensation

Mr. Dominick Paul Zarcone, also known as Nick, has been the Chief Executive Officer and President of LKQ Corporation since May 2017 and has been its Director since May 8, 2017. Mr. Zarcone served as Chief...

CEO Compensation Analysis

Compensation vs Market: Nick's total compensation ($USD9.45M) is about average for companies of similar size in the US market ($USD13.43M).

Compensation vs Earnings: Nick's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: LKQ's management team is considered experienced (3.7 years average tenure).

Board Members

Experienced Board: LKQ's board of directors are considered experienced (3.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31