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LKQ CORP (LKQ) Stock Fundamental Analysis

NASDAQ:LKQ - Nasdaq - US5018892084 - Common Stock - Currency: USD

40.49  -1.26 (-3.02%)

After market: 40.26 -0.23 (-0.57%)

Fundamental Rating

4

LKQ gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 15 industry peers in the Distributors industry. There are concerns on the financial health of LKQ while its profitability can be described as average. LKQ has a valuation in line with the averages, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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6

1. Profitability

1.1 Basic Checks

LKQ had positive earnings in the past year.
LKQ had a positive operating cash flow in the past year.
Of the past 5 years LKQ 4 years were profitable.
Of the past 5 years LKQ 4 years had a positive operating cash flow.
LKQ Yearly Net Income VS EBIT VS OCF VS FCFLKQ Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B

1.2 Ratios

LKQ has a Return On Assets (4.60%) which is comparable to the rest of the industry.
LKQ has a better Return On Equity (11.41%) than 64.29% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.01%, LKQ is in line with its industry, outperforming 57.14% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for LKQ is significantly below the industry average of 18.73%.
Industry RankSector Rank
ROA 4.6%
ROE 11.41%
ROIC 8.01%
ROA(3y)8.14%
ROA(5y)6.76%
ROE(3y)18.38%
ROE(5y)15.45%
ROIC(3y)10.29%
ROIC(5y)9.09%
LKQ Yearly ROA, ROE, ROICLKQ Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20

1.3 Margins

LKQ has a Profit Margin of 4.90%. This is in the better half of the industry: LKQ outperforms 71.43% of its industry peers.
LKQ's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 9.19%, LKQ is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
In the last couple of years the Operating Margin of LKQ has grown nicely.
LKQ has a Gross Margin of 39.33%. This is in the better half of the industry: LKQ outperforms 78.57% of its industry peers.
In the last couple of years the Gross Margin of LKQ has remained more or less at the same level.
Industry RankSector Rank
OM 9.19%
PM (TTM) 4.9%
GM 39.33%
OM growth 3Y4.27%
OM growth 5Y5.2%
PM growth 3Y7.16%
PM growth 5Y10.8%
GM growth 3Y0.62%
GM growth 5Y0.88%
LKQ Yearly Profit, Operating, Gross MarginsLKQ Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 10 20 30 40

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3

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), LKQ is destroying value.
LKQ has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
LKQ Yearly Shares OutstandingLKQ Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M
LKQ Yearly Total Debt VS Total AssetsLKQ Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B

2.2 Solvency

LKQ has an Altman-Z score of 2.78. This is not the best score and indicates that LKQ is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.78, LKQ perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
LKQ has a debt to FCF ratio of 5.80. This is a neutral value as LKQ would need 5.80 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.80, LKQ is in line with its industry, outperforming 50.00% of the companies in the same industry.
LKQ has a Debt/Equity ratio of 0.69. This is a neutral value indicating LKQ is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.69, LKQ is in line with its industry, outperforming 42.86% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.69
Debt/FCF 5.8
Altman-Z 2.78
ROIC/WACC0.68
WACC11.79%
LKQ Yearly LT Debt VS Equity VS FCFLKQ Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

2.3 Liquidity

A Current Ratio of 1.72 indicates that LKQ should not have too much problems paying its short term obligations.
LKQ has a Current ratio of 1.72. This is comparable to the rest of the industry: LKQ outperforms 42.86% of its industry peers.
A Quick Ratio of 0.67 indicates that LKQ may have some problems paying its short term obligations.
LKQ has a Quick ratio of 0.67. This is in the lower half of the industry: LKQ underperforms 64.29% of its industry peers.
Industry RankSector Rank
Current Ratio 1.72
Quick Ratio 0.67
LKQ Yearly Current Assets VS Current LiabilitesLKQ Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B

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2

3. Growth

3.1 Past

The earnings per share for LKQ have decreased by -9.14% in the last year.
The Earnings Per Share has been growing by 8.08% on average over the past years. This is quite good.
EPS 1Y (TTM)-9.14%
EPS 3Y-4.22%
EPS 5Y8.08%
EPS Q2Q%-4.76%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-4.11%

3.2 Future

Based on estimates for the next years, LKQ will show a small growth in Earnings Per Share. The EPS will grow by 6.68% on average per year.
The Revenue is expected to grow by 2.27% on average over the next years.
EPS Next Y4.48%
EPS Next 2Y7.1%
EPS Next 3Y5.71%
EPS Next 5Y6.68%
Revenue Next Year0.71%
Revenue Next 2Y1.68%
Revenue Next 3Y2.19%
Revenue Next 5Y2.27%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
LKQ Yearly Revenue VS EstimatesLKQ Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 5B 10B 15B
LKQ Yearly EPS VS EstimatesLKQ Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 1 2 3 4 5

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5

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 11.64 indicates a reasonable valuation of LKQ.
78.57% of the companies in the same industry are more expensive than LKQ, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 29.63. LKQ is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 11.14 indicates a reasonable valuation of LKQ.
78.57% of the companies in the same industry are more expensive than LKQ, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of LKQ to the average of the S&P500 Index (22.68), we can say LKQ is valued rather cheaply.
Industry RankSector Rank
PE 11.64
Fwd PE 11.14
LKQ Price Earnings VS Forward Price EarningsLKQ Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, LKQ is valued a bit cheaper than 78.57% of the companies in the same industry.
LKQ's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 14.07
EV/EBITDA 8.56
LKQ Per share dataLKQ EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20 30 40 50

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
LKQ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.6
PEG (5Y)1.44
EPS Next 2Y7.1%
EPS Next 3Y5.71%

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4

5. Dividend

5.1 Amount

LKQ has a Yearly Dividend Yield of 3.05%. Purely for dividend investing, there may be better candidates out there.
LKQ's Dividend Yield is rather good when compared to the industry average which is at 2.61. LKQ pays more dividend than 92.86% of the companies in the same industry.
LKQ's Dividend Yield is a higher than the S&P500 average which is at 2.29.
Industry RankSector Rank
Dividend Yield 3.05%

5.2 History

LKQ has paid a dividend for less than 5 years, so there is no long track record yet.
LKQ has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years3
Div Non Decr Years3
LKQ Yearly Dividends per shareLKQ Yearly Dividends per shareYearly Dividends per share 2021 2022 2023 2024 0.2 0.4 0.6 0.8 1

5.3 Sustainability

LKQ pays out 45.01% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP45.01%
EPS Next 2Y7.1%
EPS Next 3Y5.71%
LKQ Yearly Income VS Free CF VS DividendLKQ Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M 1B
LKQ Dividend Payout.LKQ Dividend Payout, showing the Payout Ratio.LKQ Dividend Payout.PayoutRetained Earnings

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LKQ CORP

NASDAQ:LKQ (2/21/2025, 8:00:02 PM)

After market: 40.26 -0.23 (-0.57%)

40.49

-1.26 (-3.02%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryDistributors
Earnings (Last)02-20 2025-02-20/bmo
Earnings (Next)04-21 2025-04-21/bmo
Inst Owners102.03%
Inst Owner Change3.18%
Ins Owners0.45%
Ins Owner Change-0.73%
Market Cap10.53B
Analysts82.86
Price Target53.52 (32.18%)
Short Float %2.51%
Short Ratio3
Dividend
Industry RankSector Rank
Dividend Yield 3.05%
Yearly Dividend1.13
Dividend Growth(5Y)N/A
DP45.01%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.79%
Min EPS beat(2)-5.83%
Max EPS beat(2)-1.76%
EPS beat(4)1
Avg EPS beat(4)-3.17%
Min EPS beat(4)-14.51%
Max EPS beat(4)9.4%
EPS beat(8)2
Avg EPS beat(8)-3.33%
EPS beat(12)5
Avg EPS beat(12)-0.22%
EPS beat(16)9
Avg EPS beat(16)7.98%
Revenue beat(2)0
Avg Revenue beat(2)-3.68%
Min Revenue beat(2)-4.99%
Max Revenue beat(2)-2.37%
Revenue beat(4)0
Avg Revenue beat(4)-2.84%
Min Revenue beat(4)-4.99%
Max Revenue beat(4)-1.41%
Revenue beat(8)2
Avg Revenue beat(8)-1.47%
Revenue beat(12)4
Avg Revenue beat(12)-1.46%
Revenue beat(16)7
Avg Revenue beat(16)-0.04%
PT rev (1m)0%
PT rev (3m)-7.25%
EPS NQ rev (1m)-0.72%
EPS NQ rev (3m)-0.72%
EPS NY rev (1m)-0.12%
EPS NY rev (3m)-0.12%
Revenue NQ rev (1m)-0.35%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.01%
Valuation
Industry RankSector Rank
PE 11.64
Fwd PE 11.14
P/S 0.73
P/FCF 14.07
P/OCF 9.59
P/B 1.69
P/tB N/A
EV/EBITDA 8.56
EPS(TTM)3.48
EY8.59%
EPS(NY)3.64
Fwd EY8.98%
FCF(TTM)2.88
FCFY7.11%
OCF(TTM)4.22
OCFY10.43%
SpS55.77
BVpS23.98
TBVpS-2.4
PEG (NY)2.6
PEG (5Y)1.44
Profitability
Industry RankSector Rank
ROA 4.6%
ROE 11.41%
ROCE 10.68%
ROIC 8.01%
ROICexc 8.24%
ROICexgc 18.97%
OM 9.19%
PM (TTM) 4.9%
GM 39.33%
FCFM 5.16%
ROA(3y)8.14%
ROA(5y)6.76%
ROE(3y)18.38%
ROE(5y)15.45%
ROIC(3y)10.29%
ROIC(5y)9.09%
ROICexc(3y)10.58%
ROICexc(5y)9.38%
ROICexgc(3y)23.45%
ROICexgc(5y)20.52%
ROCE(3y)13.74%
ROCE(5y)12.13%
ROICexcg growth 3Y11.42%
ROICexcg growth 5Y6.07%
ROICexc growth 3Y5.86%
ROICexc growth 5Y4.22%
OM growth 3Y4.27%
OM growth 5Y5.2%
PM growth 3Y7.16%
PM growth 5Y10.8%
GM growth 3Y0.62%
GM growth 5Y0.88%
F-Score6
Asset Turnover0.94
Health
Industry RankSector Rank
Debt/Equity 0.69
Debt/FCF 5.8
Debt/EBITDA 2.48
Cap/Depr 87.5%
Cap/Sales 2.41%
Interest Coverage 5.33
Cash Conversion 63.36%
Profit Quality 105.2%
Current Ratio 1.72
Quick Ratio 0.67
Altman-Z 2.78
F-Score6
WACC11.79%
ROIC/WACC0.68
Cap/Depr(3y)99.89%
Cap/Depr(5y)88.37%
Cap/Sales(3y)2.19%
Cap/Sales(5y)2.03%
Profit Quality(3y)98.16%
Profit Quality(5y)128.26%
High Growth Momentum
Growth
EPS 1Y (TTM)-9.14%
EPS 3Y-4.22%
EPS 5Y8.08%
EPS Q2Q%-4.76%
EPS Next Y4.48%
EPS Next 2Y7.1%
EPS Next 3Y5.71%
EPS Next 5Y6.68%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%-4.11%
Revenue Next Year0.71%
Revenue Next 2Y1.68%
Revenue Next 3Y2.19%
Revenue Next 5Y2.27%
EBIT growth 1Y-7.17%
EBIT growth 3Y10.57%
EBIT growth 5Y8.51%
EBIT Next Year15.53%
EBIT Next 3Y8.03%
EBIT Next 5Y5.62%
FCF growth 1Y5.92%
FCF growth 3Y-7.75%
FCF growth 5Y16.72%
OCF growth 1Y8.18%
OCF growth 3Y-2.07%
OCF growth 5Y13.79%