LKQ (LKQ) Valuation Check After Cyberattack Fallout and S&P 500 Removal

LKQ (LKQ) has had a rough stretch, between a cyberattack tied to its Oracle E Business Suite and a demotion from the S&P 500 to the S&P SmallCap 600 rattling investors.

See our latest analysis for LKQ.

The latest cyber breach and index demotion have only added to pressure that was already building, with the 1 year total shareholder return of negative 16.7 percent and 3 year total shareholder return of nearly negative 40 percent signaling fading momentum despite ongoing portfolio reshaping and modest profit growth.

If LKQ's recent volatility has you reassessing your options, it might be a good moment to explore auto manufacturers for other auto names with different risk reward profiles.

Yet with shares now trading at a steep discount to analyst targets and intrinsic value estimates, investors face a crucial question: is LKQ an overlooked value play, or is the market correctly pricing in muted growth ahead?

Most Popular Narrative: 43.8% Undervalued

At a last close of $29.70 versus a narrative fair value near the low $50s, LKQ is framed as significantly mispriced with upside potential.

Growth in miles driven increases the wear and tear on vehicles, requiring more maintenance and repair work to keep them on the road, benefiting LKQ.

LKQ’s collision business could see rising demand from increasing auto claims as more drivers return to the road following the COVID-19 pandemic.

Read the complete narrative.

Want to see how steady revenue expansion, improving margins, and a punchy future earnings multiple combine into this bullish fair value story? The full narrative unpacks every assumption.

Result: Fair Value of $52.80 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside hinges on execution, with LKQ’s complex 1 LKQ Europe integration and potential ADAS driven accident declines both threatening the bullish case.

Find out about the key risks to this LKQ narrative.

Build Your Own LKQ Narrative

If you see the numbers differently or would rather dive into the data yourself, you can build a custom narrative in minutes: Do it your way.

A great starting point for your LKQ research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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