NasdaqGS:LKQ

Stock Analysis Report

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Executive Summary

LKQ Corporation, together with its subsidiaries, distributes replacement parts, components, and systems used in the repair and maintenance of vehicles. More Details


Snowflake Analysis

Undervalued with solid track record.


Similar Companies

Share Price & News

How has LKQ's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LKQ has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.5%

LKQ

0.1%

US Retail Distributors

1.0%

US Market


1 Year Return

-2.4%

LKQ

10.7%

US Retail Distributors

13.6%

US Market

Return vs Industry: LKQ underperformed the US Retail Distributors industry which returned 10.7% over the past year.

Return vs Market: LKQ underperformed the US Market which returned 13.6% over the past year.


Shareholder returns

LKQIndustryMarket
7 Day-3.5%0.1%1.0%
30 Day0.3%0.8%-0.4%
90 Day19.7%15.0%8.9%
1 Year-2.4%-2.4%12.5%10.7%16.2%13.6%
3 Year-11.1%-11.1%37.6%31.3%40.2%30.8%
5 Year6.5%6.5%44.1%34.2%89.6%68.2%

Price Volatility Vs. Market

How volatile is LKQ's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

25.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LKQ ($31.03) is trading below our estimate of fair value ($41.75)

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


Price To Earnings Ratio

PE vs Industry: LKQ is good value based on its PE Ratio (17x) compared to the US Retail Distributors industry average (22.7x).

PE vs Market: LKQ is good value based on its PE Ratio (17x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: LKQ is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: LKQ is good value based on its PB Ratio (1.8x) compared to the US Retail Distributors industry average (3.1x).


Next Steps

Future Growth

How is LKQ forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

12.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LKQ's forecast earnings growth (12.4% per year) is above the savings rate (2.2%).

Earnings vs Market: LKQ's earnings (12.4% per year) are forecast to grow slower than the US market (23.2% per year).

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

Revenue vs Market: LKQ's revenue (3.2% per year) is forecast to grow slower than the US market (9.7% per year).

High Growth Revenue: LKQ's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if LKQ's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has LKQ performed over the past 5 years?

4.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LKQ has high quality earnings.

Growing Profit Margin: LKQ's current net profit margins (4.7%) are higher than last year (3.4%).


Past Earnings Growth Analysis

Earnings Trend: LKQ's earnings have grown by 4.8% per year over the past 5 years.

Accelerating Growth: LKQ's earnings growth over the past year (31.6%) exceeds its 5-year average (4.8% per year).

Earnings vs Industry: LKQ earnings growth over the past year (31.6%) exceeded the Retail Distributors industry -0.1%.


Return on Equity

High ROE: LKQ's Return on Equity (10.8%) is considered low.


Next Steps

Financial Health

How is LKQ's financial position?


Financial Position Analysis

Short Term Liabilities: LKQ's short term assets ($4.1B) exceed its short term liabilities ($1.9B).

Long Term Liabilities: LKQ's short term assets ($4.1B) do not cover its long term liabilities ($4.9B).


Debt to Equity History and Analysis

Debt Level: LKQ's debt to equity ratio (62.5%) is considered high.

Reducing Debt: LKQ's debt to equity ratio has increased from 57.3% to 62.5% over the past 5 years.

Debt Coverage: LKQ's debt is well covered by operating cash flow (41.4%).

Interest Coverage: LKQ's interest payments on its debt are well covered by EBIT (8.2x coverage).


Balance Sheet


Next Steps

Dividend

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


Dividend Yield vs Market

Notable Dividend: Unable to evaluate LKQ's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate LKQ's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LKQ's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LKQ's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LKQ's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

4.3yrs

Average management tenure


CEO

Nick Zarcone (62 yo)

3.33yrs

Tenure

US$6,429,072

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 ($USD6.43M) is about average for companies of similar size in the US market ($USD7.33M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Joseph Holsten
Executive Chairman8.83yrsUS$1.43m0.088%
$ 8.3m
Dominick Zarcone
President3.33yrsUS$6.43m0.12%
$ 11.1m
Varun Laroyia
Executive VP & CFO2.92yrsUS$2.75m0.037%
$ 3.4m
Walter Hanley
Senior Vice President of Development17.75yrsUS$2.21m0.087%
$ 8.2m
Justin Jude
Senior Vice President of Operations - Wholesale Parts Division5.17yrsUS$2.17m0.032%
$ 3.0m
Arnd Franz
Senior VP & CEO of LKQ Europe0.92yrUS$3.95m0.0068%
$ 640.2k
Michael Brooks
Senior VP & Chief Information Officer0.58yrno data0.0038%
$ 362.6k
Joseph Boutross
Vice President of Investor Relations9.5yrsno datano data
Victor Casini
Senior VP22.58yrsUS$1.66m0.12%
$ 11.0m
Guido Weber
Director of Corporate Communications & Government Affairsno datano datano data
Terry Fortner
Vice President of Insuranceno datano datano data
Matthew McKay
Senior Vice President of Human Resources4.25yrsno data0.017%
$ 1.6m

4.3yrs

Average Tenure

53yo

Average Age

Experienced Management: LKQ's management team is considered experienced (4.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Joseph Holsten
Executive Chairman8.83yrsUS$1.43m0.088%
$ 8.3m
Dominick Zarcone
President3.33yrsUS$6.43m0.12%
$ 11.1m
John O'Brien
Independent Director17.17yrsUS$250.02k0.045%
$ 4.2m
Jody Miller
Independent Director2.08yrsUS$236.69k0.0022%
$ 205.8k
Xavier F. Urbain
Independent Director0.75yrUS$54.84kno data
Blythe McGarvie
Independent Director8.5yrsUS$260.02k0.0069%
$ 651.5k
Patrick Berard
Independent Director0.92yrUS$95.02kno data
John Mendel
Independent Director2.08yrsUS$230.36k0.0022%
$ 205.8k
Robert Hanser
Independent Director4.83yrsUS$248.02k0.0038%
$ 359.7k
Guhan Subramanian
Lead Independent Director0.33yrUS$250.02k0.011%
$ 1.0m
Jacob Welch
Director0.083yrno datano data
Meg Divitto
Independent Director2.08yrsUS$229.69k0.0022%
$ 205.8k

2.1yrs

Average Tenure

63yo

Average Age

Experienced Board: LKQ's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: LKQ insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

LKQ Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: LKQ Corporation
  • Ticker: LKQ
  • Exchange: NasdaqGS
  • Founded: 1998
  • Industry: Distributors
  • Sector: Retail
  • Market Cap: US$9.442b
  • Shares outstanding: 304.29m
  • Website: https://www.lkqcorp.com

Number of Employees


Location

  • LKQ Corporation
  • 500 West Madison Street
  • Suite 2800
  • Chicago
  • Illinois
  • 60661
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LKQNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDOct 2003
LKQ1DB (Deutsche Boerse AG)YesCommon StockDEEUROct 2003
0JSJLSE (London Stock Exchange)YesCommon StockGBUSDOct 2003
L1KQ34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REPR 1 SHS UNSPONBRBRLJan 2020

Biography

LKQ Corporation, together with its subsidiaries, distributes replacement parts, components, and systems used in the repair and maintenance of vehicles. It operates in three segments: North America, Europe, ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/19 06:03
End of Day Share Price2020/09/18 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.