📊 LKQ Key Takeaways
Is Lkq Corp. (LKQ) a Good Investment?
LKQ faces deteriorating fundamentals with declining revenue (-1.2% YoY) and critically negative operating cash flow (-$56M) despite positive net income, suggesting earnings quality concerns. Thin net margins (2.3%) and unsustainable cash burn (-$96M FCF) create significant financial stress that current leverage ratios cannot offset indefinitely.
LKQ delivers resilient profitability and strong free cash generation with conservative leverage and adequate liquidity. However, slight revenue contraction and a double-digit EPS decline point to margin/mix pressure, keeping near-term fundamentals stable but not accelerating.
Why Buy Lkq Corp. Stock? LKQ Key Strengths
- Reasonable gross margin of 38.4% indicates retained pricing power in wholesale automotive segment
- Conservative leverage with debt/equity of 0.24x provides some financial flexibility
- Substantial asset base of $15.1B demonstrates established market position and diversification
- Robust free cash flow ($847M) with 6.2% FCF margin
- Conservative balance sheet (D/E 0.24x) and solid current ratio (1.67x)
- Healthy gross margin of 38.6% supporting cash conversion
LKQ Stock Risks: Lkq Corp. Investment Risks
- Negative operating cash flow (-$56M) and negative free cash flow (-$96M) indicate unsustainable operations despite positive accounting profits
- Revenue contraction combined with EPS declining 10.3% signals deteriorating operational performance and efficiency
- Weak quick ratio (0.60x) with only $335M cash against $1.6B debt exposes liquidity risk if cash burn continues
- Razor-thin net margin (2.3%) leaves minimal buffer for operational disruptions or economic downturns
- Revenue down 1.2% YoY indicating demand or pricing pressure
- EPS down 10.3% YoY despite flat net income, implying dilution/margin headwinds
- Low quick ratio (0.58x) reflects inventory intensity and working capital risk
Key Metrics to Watch
- Operating cash flow trend - must turn positive to validate earnings quality
- Free cash flow sustainability - current -2.8% FCF margin is untenable
- Revenue stabilization - declining topline compounds all profitability pressures
- Cash balance depletion rate - critical to monitor against debt obligations
- Revenue growth trajectory
- Operating margin sustainability
Lkq Corp. (LKQ) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Lkq Corp. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
LKQ Profit Margin, ROE & Profitability Analysis
LKQ vs Automotive Sector: How Lkq Corp. Compares
How Lkq Corp. compares to Automotive sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Lkq Corp. Stock Overvalued? LKQ Valuation Analysis 2026
Based on fundamental analysis, Lkq Corp. has mixed fundamental signals relative to the Automotive 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 Corp. Balance Sheet: LKQ Debt, Cash & Liquidity
LKQ Revenue & Earnings Growth: 5-Year Financial Trend
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 Revenue Growth, EPS Growth & YoY Performance
LKQ Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $3.3B | $79.0M | N/A |
| 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 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Lkq Corp. Dividends, Buybacks & Capital Allocation
LKQ SEC Filings: Latest 10-K & 10-Q 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 a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 72% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are LKQ's key strengths?
Claude: Reasonable gross margin of 38.4% indicates retained pricing power in wholesale automotive segment. Conservative leverage with debt/equity of 0.24x provides some financial flexibility. ChatGPT: Robust free cash flow ($847M) with 6.2% FCF margin. Conservative balance sheet (D/E 0.24x) and solid current ratio (1.67x).
What are the risks of investing in LKQ?
Claude: Negative operating cash flow (-$56M) and negative free cash flow (-$96M) indicate unsustainable operations despite positive accounting profits. Revenue contraction combined with EPS declining 10.3% signals deteriorating operational performance and efficiency. ChatGPT: Revenue down 1.2% YoY indicating demand or pricing pressure. EPS down 10.3% YoY despite flat net income, implying dilution/margin headwinds.
What is LKQ's revenue and growth?
Lkq Corp. reported revenue of $3.5B.
Does LKQ pay dividends?
Lkq Corp. pays dividends, with $77.0M 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 May 2026, Lkq Corp. has a SELL 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 1.2% (sector avg: 12%), net margin of 2.3% (sector avg: 6%). 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 SELL 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 $-56.0M, with capital expenditures of $40.0M. FCF margin is -2.8%.
How does LKQ compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 2.3% (avg: 6%), ROE 1.2% (avg: 12%), current ratio 1.54 (avg: 1.2).