LKQ Corporation (LKQ)
Consumer Cyclical · NMS · US
Fundamentals
Valuation and ratings
LKQ Corporation trades at USD26.01, close to the USD25.34 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 40 out of 100, which is little in the way of a moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 12.4 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About LKQ Corporation
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.
LKQ passes 2 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
16 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Richard Pzena, PZENA INVESTMENT MANAGEMENT LLC$183.06M · 0.6% of book
- Lyrical Asset Management, LYRICAL ASSET MANAGEMENT LP$89.57M · 1.4% of book
- Steven Check, CHECK CAPITAL MANAGEMENT INC/CA$56.31M · 1.6% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$24.33M · 0.0% of book
- Capital Research Global, Capital Research Global Investors$22.78M · 0.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is LKQ Corporation (LKQ) undervalued?
Against our discounted cash flow estimate of USD25.34, LKQ at USD26.01 is 3% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own LKQ?
16 of the institutions we track reported a position in LKQ in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is LKQ's P/E ratio?
LKQ trades at 12.4 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for LKQ, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.