LKQ Corp (LKQ) stock analysis

P/E above its 5-year median

LKQ's P/E of 19.5 is above its own 5-year median of 13.5.

P/E below the industry

LKQ's P/E of 19.5 is below the Wholesale Trade-durable Goods median of 19.9.

EV/EBITDA below its 5-year median

LKQ's EV/EBITDA of 4.5 is below its 5-year median of 6.9.

P/B below the industry

LKQ's price-to-book of 0.78 is below the Wholesale Trade-durable Goods median of 2.13.

Trading below fair value

The share price of $19.47 is below our fair value estimate of $32.32.

Margin of safety over 20%

The price is 39.8% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 2.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -17.1% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -63.7% over the last twelve months, against a 5-year average of -1.0% a year.

Growing slower than the industry

Revenue grew -0.4% over the last twelve months; the Wholesale Trade-durable Goods median is 8.4%.

Guidance lowered

LKQ lowered its 2026 Updated Full Year Outlook Organic revenue growth for parts and services outlook on Jul 30, 2026.

Gross margin slipping

Gross margin was 38.1% over the last twelve months, against 38.9% a year earlier.

Return on equity under 15%

Return on equity was 4.0% over the last twelve months and averaged 15.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 7.0%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

LKQ's return on equity of 4.0% is below the Wholesale Trade-durable Goods median of 7.6%.

Earnings shrank over 5 years

Net income shrank 1.0% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 1.9% over the last twelve months, against a 5-year average of 6.8%.

Net margin above the industry

LKQ's net margin of 1.9% is above the Wholesale Trade-durable Goods median of 1.9%.

No debt

LKQ has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 1.75 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.34; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

LKQ paid dividends worth 6.2% of the share price over the last twelve months.

Yield above Treasuries

The 6.2% yield is above the 4.7% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; LKQ yields 6.2%.

Dividend stability

Fewer than five years of dividend history.

Not covered by earnings

Dividends take 120% of net income, leaving little room.

Covered by free cash flow

Dividends take 50.2% of free cash flow.