# LKQ (LKQ.US)

Canonical: https://gigainvestors.com/s/LKQ

Analysis as of: 2026-10-16T07:29:52.407Z. Financial observations: FY1998–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $22.36 per share; close as of 2026-10-15.

Estimated value: low $44.86 per share, central $57.52 per share, high $67.20 per share. Buy at or below the central value $57.52 per share. Valuation as of 2026-10-16T07:29:52.407Z; scenarios are not confidence intervals.

Expected annual return: 20.8% at the stated quote. About 20.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.20×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.09×

- FY2018: 0.07×

- FY2019: 0.07×

- FY2020: 0.08×

- FY2021: 0.11×

- FY2022: 0.12×

- FY2023: 0.10×

- FY2024: 0.08×

- FY2025: 0.08×

- LTM to Jun 2026: 0.07×

### moat: fail

- ROIC median below threshold

- ROIC, median of available years: 14.3%

- ROIC, second-lowest year: 11.7%

- Typical minus recent gross margin: 1.4 pp

- Typical gross margin (annual median): 39.1%

- Recent gross margin (lower of latest and 3-year median): 37.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.0%

- ROIC including acquisitions, ten-year median: 7.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 15.5%

- FY2018: 14.5%

- FY2019: 11.7%

- FY2020: 14.1%

- FY2021: 21.8%

- FY2022: 24.7%

- FY2023: 16.6%

- FY2024: 13.8%

- FY2025: 13.8%

- LTM to Jun 2026: 11.5%

### economics: pass

- Owner earnings / net income, 5-yr: 1.14×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $4.4B

- Net income, five-year total: $3.8B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.9 pp

- Working capital / revenue, change between three-year averages: -6.4 pp

- Working capital / revenue, final three-year average: 19.0%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.04×

- FY2023: 1.00×

- FY2024: 1.14×

- FY2025: 1.33×

- LTM to Jun 2026: 1.47×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 14.7% vs 13.8%

- Per-share earnings: 1.50 to 2.61 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.7%

- Ordinary dilution, 5-year annual growth: -3.3%

- Market cap gain: -$1.7B

- Cumulative retained earnings: $5.4B

- Diluted shares, 10-year annual growth: -1.7%

- Diluted shares, 5-year annual growth: -3.3%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 7.2%

- Per-share value change: $1.12

- Per-share value, starting three-year median: $1.50

- Per-share value, ending three-year median: $2.61

- Buybacks concentrated in cheaper years (correlation): 0.40

- Average buyback yield: 2.6%

- Buyback history: 9 years

- Debt-funded buybacks: No

- Acquisition spending: $5.5B

- Cumulative net income, 10 years: $7.1B

- ROIC, first three-year median: 14.7%

- ROIC, last three-year median: 13.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.50

- FY2017: $1.72

- FY2018: $1.52

- FY2019: $1.74

- FY2020: $2.09

- FY2021: $3.66

- FY2022: $4.13

- FY2023: $3.49

- FY2024: $2.61

- FY2025: $2.35

### accounting: pass

- Sloan accruals: -3.0%

- Receivables to sales index (DSRI): 1.11×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 3.2%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.75×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.99×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.1%

- FY2017: 0.2%

- FY2018: -2.0%

- FY2019: -4.1%

- FY2020: -6.5%

- FY2021: -2.2%

- FY2022: -0.8%

- FY2023: -2.8%

- FY2024: -2.9%

- FY2025: -3.0%

## Holders

- [Steven Check](https://gigainvestors.com/CHE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Richard Pzena](https://gigainvestors.com/PIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [William Browne](https://gigainvestors.com/TB): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Wallace Weitz](https://gigainvestors.com/WIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 63% since Dec 2021 · "LKQ Q2 Deep Dive: ERP Challenges and European Weakness Drive Downward Guidance Revision" (finance.yahoo.com, Aug 2026) · sales -1.6%

Story as of 2026-10-16T09:59:04.813Z; price observation 2026-10-15.

Price needs cash profits to shrink 8.1% a year for ten years

- 2025-04-24: Auto parts supplier LKQ reports weak first-quarter revenue, shares slump ([ca.finance.yahoo.com](https://ca.finance.yahoo.com/news/auto-parts-supplier-lkq-reports-143713799.html))

- 2025-07-24: LKQ Shares Crash To 52-Week Low On Slashed Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/lkq-shares-crash-52-week-152152209.html))

- 2025-08-26: LKQ Corp stock rises as company sells Self Service segment for $410 million ([investing.com](https://www.investing.com/news/analyst-ratings/lkq-corp-stock-rises-as-company-sells-self-service-segment-for-410-million-93CH-4211239))

- 2026-04-30: LKQ Q1 Earnings Match Estimates, Revenues Beat on Stronger Sales Mix ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/lkq-q1-earnings-match-estimates-162600620.html))

- 2026-07-31: LKQ Q2 Earnings Miss Estimates on Europe ERP Disruption ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/lkq-q2-earnings-miss-estimates-161200750.html))

- 2026-08-01: LKQ Q2 Deep Dive: ERP Challenges and European Weakness Drive Downward Guidance Revision ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/lkq-q2-deep-dive-erp-000357933.html))

### Sales · FY2025–2026

sales -1.6%; source https://www.sec.gov/Archives/edgar/data/1065696/000106569626000012/lkq-20251231.htm; observed 2026-02-19.

- FY2017: $9.7B 

- FY2018: $12B 

- FY2019: $13B 

- FY2020: $12B 

- FY2021: $13B 

- FY2022: $13B 

- FY2023: $14B 

- FY2024: $14B 

- FY2025: $14B 

- FY2026: $14B 

### Gross margin · FY2026

gross margin 37.7%; source https://www.sec.gov/Archives/edgar/data/1065696/000106569626000012/lkq-20251231.htm; observed 2026-02-19.

- FY2017: 39.0% 

- FY2018: 38.5% 

- FY2019: 38.8% 

- FY2020: 39.5% 

- FY2021: 40.7% 

- FY2022: 40.8% 

- FY2023: 40.2% 

- FY2024: 39.1% 

- FY2025: 38.0% 

- FY2026: 37.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in auto parts; annual sales are USD 13.9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1065696/000106569626000012/lkq-20251231.htm (filed 2026-02-19); FY2025: revenue 13916000000; grossProfit 5292000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); LKQ.US: LKQ Corporation engages in the distribution of replacement parts, components, and systems used in the repair and maintenance of vehicles and specialty vehicle aftermarket products and accessories. The company operates through four segments: Wholesale-North America, Europe, Specialty, and Self Service. It offers bumper covers, automotive body panels, and lights, as well as paint and paint related consumables for refinishing vehicles; mechanical automotive parts and accessories; salvage products, including mechanical and collision parts comprising engines; transmissions; door assemblies; sheet metal products, such as trunk lids, fenders, and hoods; and lights and bumper assemblies. The company also provides scrap metal and other materials to metals recyclers; precious metals, such as catalytic converters; and brake pads, discs and sensors, clutches, steering and suspension products, filters, and oil and automotive fluids, as well as electrical products, including spark plugs and batteries. In addition, the company distributes recreational vehicle appliances and air conditioners, towing hitches, truck bed covers, vehicle protection products, marine electronics, cargo management products, wheels, tires, and suspension products. It serves collision and mechanical repair shops, new and used car dealerships, and retail customers. The company operates in the United States, Canada, Germany, the United Kingdom, Belgium, the Netherlands, Luxembourg, Italy, the Czech Republic, Austria, Poland, Slovakia, France, and other European countries. LKQ Corporation was incorporated in 1998 and is headquartered in Antioch, Tennessee.

### Why customers stay

Margins ranged from 38% to 40.2% during 2023–25; it earns 14.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2023: grossProfit / revenue = 40.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2024: grossProfit / revenue = 39.1%.

- Source: https://www.sec.gov/Archives/edgar/data/1065696/000106569626000012/lkq-20251231.htm (filed 2026-02-19); FY2025: grossProfit / revenue = 38%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); 10-year return on capital observations [[2017,0.1551405798271292],[2018,0.14465824934490684],[2019,0.11718144651534304],[2020,0.1406625655483723],[2021,0.21829820273496325],[2022,0.24690178977669464],[2023,0.16579944992719625],[2024,0.13833261079334894],[2025,0.13816011780206156],[2026,0.11475792112396888]]; median 0.14266040744663958. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 41% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1065696/000106569626000012/lkq-20251231.htm (filed 2026-02-19); Gross margin observations: [[2021,0.40660096264038503],[2022,0.40823823667344067],[2023,0.4020625991634213]]; range within 2 percentage points.

### Where the cash goes

Reinvests 0.1% of cash earnings; paid dividends in 8 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2016: growth capex 988000; upkeep 206086000; cash acquisitions 1349339000; owner earnings 463975000. Growth capex plus acquisitions / owner earnings = 2.9103443073441455.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2017: growth capex 0; upkeep 179090000; cash acquisitions 513088000; owner earnings 584857000. Growth capex plus acquisitions / owner earnings = 0.8772879524396562.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2018: growth capex 0; upkeep 250027000; cash acquisitions 1214995000; owner earnings 524168000. Growth capex plus acquisitions / owner earnings = 2.3179495886814916.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2019: growth capex 0; upkeep 265730000; cash acquisitions 27296000; owner earnings 589936000. Growth capex plus acquisitions / owner earnings = 0.04626942583602289.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2020: growth capex 0; upkeep 172695000; cash acquisitions 7000000; owner earnings 764728000. Growth capex plus acquisitions / owner earnings = 0.009153581404107082.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2021: growth capex 9466000; upkeep 284000000; cash acquisitions 124000000; owner earnings 1091000000. Growth capex plus acquisitions / owner earnings = 0.12233363886342805.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2022: growth capex 0; upkeep 222000000; cash acquisitions 4000000; owner earnings 1191000000. Growth capex plus acquisitions / owner earnings = 0.0033585222502099076.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2023: growth capex 39000000; upkeep 319000000; cash acquisitions 2225000000; owner earnings 936000000. Growth capex plus acquisitions / owner earnings = 2.4188034188034186.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); FY2024: growth capex 0; upkeep 311000000; cash acquisitions 49000000; owner earnings 785000000. Growth capex plus acquisitions / owner earnings = 0.062420382165605096.

- Source: https://www.sec.gov/Archives/edgar/data/1065696/000106569626000012/lkq-20251231.htm (filed 2026-02-19); FY2025: growth capex 0; upkeep 216000000; cash acquisitions 1000000; owner earnings 809000000. Growth capex plus acquisitions / owner earnings = 0.0012360939431396785.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); Dividend observations: [[2016,0],[2017,0],[2018,72873000],[2019,72873000],[2020,72873000],[2021,72873000],[2022,284000000],[2023,302000000],[2024,318000000],[2025,310000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1065696/000106569626000012/lkq-20251231.htm (filed 2026-02-19); FY2025: cash repurchases 159000000 USD.

### Are managers owners

Insiders own 0.4% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); LKQ.US SharesStats.PercentInsiders = 0.367 percentage points; cache date 2026-10-16.

### What could break it

No other supplier represented more than 4% of our purchases during 2025.

- Source: https://www.sec.gov/Archives/edgar/data/1065696/000106569626000012/lkq-20251231.htm (filed 2026-02-19); In 2025, approximately 19% of our specialty vehicle aftermarket purchases were made from our top three suppliers, with our largest supplier accounting for approximately 10% of our annual inventory purchases. No other supplier represented more than 4% of our purchases during 2025. Customers Our customers are principally small, independent businesses that rely on us to provide a broad range of products, rapid delivery, marketing support and technical assistance.

### What the price says

The price assumes cash profits shrink 8.1% yearly over ten years; actual growth was 8.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-19); Ten-year compound average after fade. Initial solved rate -0.12632915890259994. Price 22.36; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.3763528631266748 → FY2025 3.138091543832428. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $32.28 per share

- 2016-11: $32.83 per share

- 2016-12: $30.65 per share

- 2017-01: $31.91 per share

- 2017-02: $31.58 per share

- 2017-03: $29.27 per share

- 2017-04: $31.24 per share

- 2017-05: $31.49 per share

- 2017-06: $32.95 per share

- 2017-07: $34.56 per share

- 2017-08: $34.65 per share

- 2017-09: $35.99 per share

- 2017-10: $37.69 per share

- 2017-11: $39.42 per share

- 2017-12: $40.67 per share

- 2018-01: $42.03 per share

- 2018-02: $39.48 per share

- 2018-03: $37.95 per share

- 2018-04: $31.02 per share

- 2018-05: $31.77 per share

- 2018-06: $31.90 per share

- 2018-07: $33.52 per share

- 2018-08: $34.52 per share

- 2018-09: $31.67 per share

- 2018-10: $27.27 per share

- 2018-11: $27.84 per share

- 2018-12: $23.73 per share

- 2019-01: $26.22 per share

- 2019-02: $27.70 per share

- 2019-03: $28.38 per share

- 2019-04: $30.10 per share

- 2019-05: $25.65 per share

- 2019-06: $26.61 per share

- 2019-07: $26.93 per share

- 2019-08: $26.27 per share

- 2019-09: $31.45 per share

- 2019-10: $33.99 per share

- 2019-11: $35.28 per share

- 2019-12: $35.70 per share

- 2020-01: $32.69 per share

- 2020-02: $29.58 per share

- 2020-03: $20.51 per share

- 2020-04: $26.15 per share

- 2020-05: $27.46 per share

- 2020-06: $26.20 per share

- 2020-07: $28.19 per share

- 2020-08: $31.74 per share

- 2020-09: $27.73 per share

- 2020-10: $31.99 per share

- 2020-11: $35.22 per share

- 2020-12: $35.24 per share

- 2021-01: $35.09 per share

- 2021-02: $39.39 per share

- 2021-03: $42.33 per share

- 2021-04: $46.71 per share

- 2021-05: $50.96 per share

- 2021-06: $49.22 per share

- 2021-07: $50.75 per share

- 2021-08: $52.69 per share

- 2021-09: $50.32 per share

- 2021-10: $55.08 per share

- 2021-11: $55.90 per share

- 2021-12: $60.03 per share

- 2022-01: $54.89 per share

- 2022-02: $46.95 per share

- 2022-03: $45.41 per share

- 2022-04: $49.63 per share

- 2022-05: $51.39 per share

- 2022-06: $49.09 per share

- 2022-07: $54.84 per share

- 2022-08: $53.22 per share

- 2022-09: $47.15 per share

- 2022-10: $55.64 per share

- 2022-11: $54.33 per share

- 2022-12: $53.41 per share

- 2023-01: $58.96 per share

- 2023-02: $57.29 per share

- 2023-03: $56.76 per share

- 2023-04: $57.73 per share

- 2023-05: $52.75 per share

- 2023-06: $58.27 per share

- 2023-07: $54.79 per share

- 2023-08: $52.53 per share

- 2023-09: $49.51 per share

- 2023-10: $43.92 per share

- 2023-11: $44.53 per share

- 2023-12: $47.79 per share

- 2024-01: $46.67 per share

- 2024-02: $52.29 per share

- 2024-03: $53.41 per share

- 2024-04: $43.13 per share

- 2024-05: $43.03 per share

- 2024-06: $41.59 per share

- 2024-07: $41.50 per share

- 2024-08: $41.59 per share

- 2024-09: $39.92 per share

- 2024-10: $36.79 per share

- 2024-11: $39.29 per share

- 2024-12: $36.75 per share

- 2025-01: $37.39 per share

- 2025-02: $42.19 per share

- 2025-03: $42.54 per share

- 2025-04: $38.21 per share

- 2025-05: $40.47 per share

- 2025-06: $37.01 per share

- 2025-07: $29.47 per share

- 2025-08: $32.62 per share

- 2025-09: $30.54 per share

- 2025-10: $31.96 per share

- 2025-11: $29.69 per share

- 2025-12: $30.20 per share

- 2026-01: $32.85 per share

- 2026-02: $33.11 per share

- 2026-03: $29.37 per share

- 2026-04: $31.58 per share

- 2026-05: $27.12 per share

- 2026-06: $26.33 per share

- 2026-07: $22.45 per share

- 2026-08: $25.10 per share

- 2026-09: $22.83 per share

- 2026-10: $22.36 per share

## Annual estimated value (USD per share)

- FY2016: low $22.35 per share, central $31.84 per share, high $37.38 per share

- FY2017: low $25.35 per share, central $36.09 per share, high $42.35 per share

- FY2018: low $29.23 per share, central $41.63 per share, high $48.86 per share

- FY2019: low $30.43 per share, central $43.09 per share, high $50.47 per share

- FY2020: low $28.28 per share, central $40.28 per share, high $47.27 per share

- FY2021: low $35.48 per share, central $50.00 per share, high $58.69 per share

- FY2022: low $39.61 per share, central $54.27 per share, high $63.61 per share

- FY2023: low $44.20 per share, central $58.58 per share, high $68.56 per share

- FY2024: low $45.19 per share, central $58.24 per share, high $68.08 per share

- FY2025: low $44.81 per share, central $57.44 per share, high $67.10 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1065696/000106569626000012/lkq-20251231.htm); period 2025-12-31, filed 2026-02-19.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.