📊 LKQ Key Takeaways
Is LKQ a Good Investment? Thesis Analysis
LKQ demonstrates financial stability with strong free cash flow generation ($847M) and conservative balance sheet leverage, but faces fundamental headwinds with declining revenues (-1.2% YoY) and deteriorating EPS (-10.3% YoY). The business generates adequate cash but returns on equity (9.3%) and assets (4.0%) are insufficient for a capital-intensive wholesale distribution model.
Why Buy LKQ? Key Strengths
- Strong free cash flow of $847M with 6.2% FCF margin demonstrates efficient cash generation
- Conservative capital structure with 0.24x debt-to-equity ratio and $1.6B manageable long-term debt
- Solid operating cash flow of $1.1B supports dividends and debt service with room for flexibility
LKQ Investment Risks to Consider
- Revenue contraction of -1.2% YoY indicates market share loss or industry headwinds in automotive aftermarket
- EPS declined -10.3% YoY despite flat net income, signaling per-share dilution or higher share count
- Weak returns on equity (9.3%) and assets (4.0%) indicate capital is not generating acceptable returns for equity holders
- Quick ratio of 0.58x reveals working capital constraints from inventory-heavy business model
- Net margins of 4.5% are thin for wholesale distribution, leaving little room for operational errors
Key Metrics to Watch
- Revenue growth trajectory - stabilization or sustained contraction trends
- Operating margin expansion - ability to reduce costs amid revenue pressure
- Free cash flow sustainability - maintenance of $800M+ annual FCF generation
- Inventory turnover and working capital efficiency - quick ratio improvement
- Return on equity improvement - path to exceed 12% ROE threshold
LKQ Financial Metrics
💡 AI Analyst Insight
LKQ CORP presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
LKQ Profitability Ratios
LKQ vs Default Sector
How LKQ CORP compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is LKQ Overvalued or Undervalued?
Based on fundamental analysis, LKQ CORP has mixed fundamental signals relative to the Default sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
LKQ Balance Sheet & Liquidity
LKQ 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: LKQ CORP's revenue has shown modest growth of 6% over the 5-year period. The most recent EPS of $3.49 reflects profitable operations.
LKQ Growth Metrics (YoY)
LKQ Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $3.5B | $180.0M | $0.70 |
| Q2 2025 | $3.6B | $186.0M | $0.70 |
| Q1 2025 | $3.5B | $158.0M | $0.59 |
| Q3 2024 | $3.6B | $192.0M | $0.73 |
| Q2 2024 | $3.4B | $186.0M | $0.70 |
| Q1 2024 | $3.3B | $158.0M | $0.59 |
| Q3 2023 | $3.1B | $208.0M | $0.78 |
| Q2 2023 | $3.3B | $282.0M | $1.05 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
LKQ Capital Allocation
LKQ SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for LKQ CORP (CIK: 0001065696)
📋 Recent SEC Filings
❓ Frequently Asked Questions about LKQ
What is the AI rating for LKQ?
LKQ CORP (LKQ) has an AI rating of HOLD with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are LKQ's key strengths?
Claude: Strong free cash flow of $847M with 6.2% FCF margin demonstrates efficient cash generation. Conservative capital structure with 0.24x debt-to-equity ratio and $1.6B manageable long-term debt.
What are the risks of investing in LKQ?
Claude: Revenue contraction of -1.2% YoY indicates market share loss or industry headwinds in automotive aftermarket. EPS declined -10.3% YoY despite flat net income, signaling per-share dilution or higher share count.
What is LKQ's revenue and growth?
LKQ CORP reported revenue of $13.7B.
Does LKQ pay dividends?
LKQ CORP pays dividends, with $310.0M distributed to shareholders in the trailing twelve months.
Where can I find LKQ SEC filings?
Official SEC filings for LKQ CORP (CIK: 0001065696) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is LKQ's EPS?
LKQ CORP has a diluted EPS of $2.35.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is LKQ a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, LKQ CORP has a HOLD rating with 72% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is LKQ stock overvalued or undervalued?
Valuation metrics for LKQ: ROE of 9.3% (sector avg: 15%), net margin of 4.5% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
Should I buy LKQ stock in 2026?
Our dual AI analysis gives LKQ CORP a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is LKQ's free cash flow?
LKQ CORP's operating cash flow is $1.1B, with capital expenditures of $216.0M. FCF margin is 6.2%.
How does LKQ compare to other Default stocks?
Vs Default sector averages: Net margin 4.5% (avg: 12%), ROE 9.3% (avg: 15%), current ratio 1.67 (avg: 1.8).