For AI assistants & researchers — machine-readable summary of this page
What this page is: Delvantic's full research page for LKQ Corporation (LKQ) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-23): Designation Bounce · Gem Score +16 (−100…+100 Quality+Value blend) · Quality -9 · Value 37 · Sentiment -50 (timing only, not weighted) · Composite fair value $43.16 vs $23.36 at analysis
Page map (sections in order; each card carries a stable
reference-name attribute you can cite):
profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
More for machine readers: site briefing at
/llms.txt ·
any ticker resolves at delvantic.com/stock/TICKER ·
raw inputs are public-company filings and market data (via licensed data feeds);
every model, score, lens read, and prediction on this page is Delvantic's own analysis.
LKQ Corporation
LKQ NASDAQLKQ Corporation is a global distributor of vehicle products and related services focused on the automotive aftermarket. The company supplies alternative and specialty parts used to repair, maintain, and accessorize automobiles, trucks, and recreational and performance vehicles. Its portfolio includes recycled and aftermarket collision parts, mechanical components, remanufactured engines and transmissions, automotive glass, and various accessories for performance and appearance enhancement. LKQ Corporation operates through distinct business segments across North America, Europe, and Taiwan, serving collision and mechanical repair shops, distributors, and other professional customers. The company offers a broad range of original equipment recycled parts as well as non-OEM alternatives, supporting cost-efficient and sustainable repair solutions. Headquartered in Antioch, Tennessee and founded in 1998, LKQ Corporation plays a significant role in the global auto parts supply chain by providing extensive product availability, logistics capabilities, and technical support to the automotive repair and maintenance market.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 2.35
Total Equity: $6.56B
Shares: 257,800,000
Total Debt: $0.00
Cash: $319.00M
EBITDA: $1.41B
Total Debt: $0.00
Cash: $319.00M
Revenue: $13.65B
Revenue: $13.65B
Revenue: $13.65B
Total Equity: $6.56B
Tax Rate: 25.5%
Equity: $6.56B
Total Debt: $0.00
Cash: $319.00M
Current Liabilities: $3.14B
Long-Term Debt: $0.00
Total Debt: $0.00
Total Equity: $6.56B
Shares: 257,800,000
Shares: 257,800,000
CapEx: -$216.00M
Shares: 257,800,000
Stock Price: $23.36
Net Income: $608.00M
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 3, 2026 5:35pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $13.1B | $12.8B | $13.9B | $14.4B | $13.7B |
| Cost of Revenue | $7.8B | $7.6B | $8.3B | $8.7B | $8.4B |
| Gross Profit | $5.3B | $5.2B | $5.6B | $5.6B | $5.3B |
| Operating Expenses | $3.8B | $3.6B | $4.2B | $4.4B | $4.3B |
| Operating Income | $1.5B | $1.6B | $1.4B | $1.2B | $993.0M |
| Net Income | $1.1B | $1.1B | $938.0M | $693.0M | $608.0M |
| EBITDA | $1.8B | $1.8B | $1.7B | $1.6B | $1.4B |
| EPS | $3.68 | $4.15 | $3.50 | $2.62 | $2.36 |
| EPS (Diluted) | $3.66 | $4.13 | $3.49 | $2.62 | $2.35 |
Balance Sheet (Annual)
Last updated: Aug 3, 2026 5:13pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $274.0M | $278.0M | $299.0M | $234.0M | $319.0M |
| Total Current Assets | $4.3B | $4.3B | $4.9B | $4.9B | $5.2B |
| Total Assets | $12.6B | $12.0B | $15.1B | $15.0B | $15.1B |
| Current Liabilities | $2.2B | $2.3B | $3.3B | $2.9B | $3.1B |
| Long-Term Debt | — | — | — | — | — |
| Total Liabilities | $6.8B | $6.6B | $8.9B | $8.9B | $8.6B |
| Total Equity | $5.8B | $5.5B | $6.2B | $6.0B | $6.6B |
| Retained Earnings | $5.8B | $6.7B | $7.3B | $7.7B | $8.0B |
Cash Flow (Annual)
Last updated: Aug 3, 2026 5:35pm (20d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $1.4B | $1.3B | $1.4B | $1.1B | $1.1B |
| Capital Expenditure | -$293.5M | -$222.0M | -$358.0M | -$311.0M | -$216.0M |
| Free Cash Flow | $1.1B | $1.0B | $998.0M | $810.0M | $847.0M |
| Acquisitions (net) | -$123.9M | -$4.0M | -$2.2B | -$49.0M | $1.0M |
| Net Debt Issued / (Repaid) | — | — | — | — | — |
| Dividends Paid | -$72.9M | -$284.0M | -$302.0M | -$318.0M | -$310.0M |
| Stock Buybacks | -$876.8M | -$1.0B | -$38.0M | -$360.0M | -$159.0M |
| Net Change in Cash | -$38.0M | $4.0M | $21.0M | -$60.0M | $93.0M |
Growth Trends (YoY %)
Last updated: Aug 3, 2026 5:35pm (20d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | -2.3% | +8.4% | +3.5% | -4.9% |
| Gross Profit Growth | -1.9% | +6.7% | +0.6% | -6.2% |
| Operating Income Growth | +7.2% | -14.2% | -11.6% | -17.2% |
| Net Income Growth | +5.3% | -18.4% | -26.1% | -12.3% |
| EBITDA Growth | +4.9% | -9.2% | -4.2% | -12.1% |
Dividend History (Last 20)
Last updated: Aug 3, 2026 5:13pm (20d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-08-20 | $0.30 | — | — | — |
| 2026-05-21 | $0.30 | — | — | — |
| 2026-03-12 | $0.30 | — | — | — |
| 2025-11-20 | $0.30 | — | — | — |
| 2025-08-14 | $0.30 | — | — | — |
| 2025-05-15 | $0.30 | — | — | — |
| 2025-03-13 | $0.30 | — | — | — |
| 2024-11-14 | $0.30 | — | — | — |
| 2024-08-15 | $0.30 | — | — | — |
| 2024-05-15 | $0.30 | — | — | — |
| 2024-03-13 | $0.30 | — | — | — |
| 2023-11-15 | $0.30 | — | — | — |
| 2023-08-16 | $0.28 | — | — | — |
| 2023-05-17 | $0.28 | — | — | — |
| 2023-03-15 | $0.28 | — | — | — |
| 2022-11-16 | $0.28 | — | — | — |
| 2022-08-10 | $0.25 | — | — | — |
| 2022-05-18 | $0.25 | — | — | — |
| 2022-03-02 | $0.25 | — | — | — |
| 2021-11-09 | $0.25 | — | — | — |
Deep Analysis
Narrative Economics
market-narrative step).
Claude Reading
The raw quarterly tape is uglier than the synthesis lets on. Net income collapsed from $180M in Q3 2025 to $66M in Q4 2025 to $79M in Q1 2026 — margins halved from ~5.1% to ~2.2% while revenue actually ticked up sequentially to $3.47B. That's not cyclical demand softness; that's a margin event. Something structural or one-time hit COGS/opex in the back half of 2025 and hasn't recovered. Annual op margin went from 12.4% (2022) → 9.8% (2023) → 8.3% (2024) → 7.3% (2025), a 500bp compression in three years on essentially flat revenue. The bear thesis — OEM parts share gain, insurance-driven price pressure, ADAS reducing severity — is empirically consistent with this margin curve. The models are treating LKQ as a stable earner with a re-rating catalyst; the actual trajectory says the earnings base is still finding a bottom.
That reframes the multiples. The 9.9x P/E is trailing on $608M of 2025 NI, but if you annualize the last two quarters ($145M × 2 = ~$290M run-rate), you get ~20x on depressed earnings — or, put differently, EPS could be $1.15 rather than $2.35. EV/EBITDA of 3.96x is similarly backward-looking. The synthesis's $43 composite fair value implicitly assumes mean reversion to ~5% net margins on $13.5B revenue; if the true through-cycle margin is 3-3.5% (the ADAS/OEM-share bear case), fair value is closer to $28-32, not $43. The pre-flight note flags this correctly but the composite output doesn't fully absorb it. Also worth noting: the balance sheet line shows "Total debt: —" which is almost certainly a data gap, not zero — LKQ historically carries $4B+ in debt from the Uni-Select and European acquisitions. Debt/equity of 0 is wrong, and that materially affects EV calculations. The 3.96x EV/EBITDA number is suspect.
Where I'd push back on the market-forces "terminal decline" framing: LKQ's mechanical/aftermarket parts business isn't going to zero in the EV transition — EVs still need suspension, glass, brakes, HVAC, body panels. The collision-frequency-declines-because-ADAS narrative has been circulating since 2016 and US collision claim frequency has been remarkably stable; severity has actually risen because ADAS-equipped bumpers/sensors cost more to replace. The bull case in the thesis eval isn't wrong. But — and this is the contrarian point against the value case — a business that generates $847M FCF, pays a 5.1% dividend with a 51% payout ratio, and is presumably levered, has less margin of safety than the headline P/B 0.9x suggests. If FCF slides from $847M to $500M (consistent with the earnings deterioration), the dividend becomes ~70% of FCF and the deleveraging story stalls.
Insider activity is uninformative — all F-InKind tax withholdings and A-Awards, no open-market buying at $23 despite the alleged 40%+ discount to fair value. That's telling. Management isn't stepping up. I partially agree with synthesis that LKQ is undervalued versus a normalized earnings scenario, but I disagree with the confidence and the price anchor. Fair value on my read is $28-34, not $38-43, because I'm giving weight to the possibility that the Q4/Q1 margin collapse reflects a new normal rather than a blip. That's still 20-45% upside from $23.36, which justifies a starter position but not a table-pound. The critical variable is Q2 2026 margin: if net margin recovers toward 4%+, the synthesis is right and this is a $35+ stock; if it stays sub-3%, the market forces bear case is validated and $20 is the floor, not the bargain. I'd want to see one clean quarter before adding aggressively, and I'd want clarification on the debt line before trusting any EV-based multiple.
GPT Reading
What stands out is not a cheap compounder being temporarily misunderstood; it is a business whose earnings power has been stepping down for years, with the stock simply refusing to pay yesterday’s multiple for yesterday’s margins. Revenue has been roughly flat to down across the cycle: $13.09B in 2021, $12.79B in 2022, back to $13.87B in 2023, $14.36B in 2024, then down to $13.65B in 2025. The more important deterioration is below the revenue line. Operating income has fallen from $1.58B in 2022 to $1.36B in 2023, $1.20B in 2024, and $993M in 2025. Net income has nearly halved from $1.15B in 2022 to $608M in 2025. That is not noise. It says LKQ is moving less profitably through a business that no longer has much pricing or mix tailwind.
The quarterly pattern makes the compression hard to dismiss as one-off timing. Through most of 2024 and early 2025, net margins were still in a 4.5%-5.6% range, but the latest two quarters fell to 2.1% and 2.3% on revenues of $3.18B and $3.47B. Even giving some allowance for charges or seasonality, that is a material degradation in earnings conversion. Gross margin in 2025 was still a respectable 38.6%, so the pressure appears to be in operating cost absorption and/or pricing discipline rather than a total collapse in merchandise economics. That is actually worse for the bull case: if gross margin holds but operating margin still slides to 7.3% for the year versus 11%-12% territory a few years ago, then scale is not rescuing the model. A distributor/salvage platform with stagnant sales and shrinking operating leverage deserves a low multiple.
The balance sheet and cash flow are the only things preventing me from being outright bearish. Cash of $319M, reported debt-to-equity at 0, current ratio 1.67, and $847M of free cash flow on just a $5.91B market cap are undeniably strong on paper. At face value that is a roughly 14% FCF yield, while the stock trades at 0.44x sales, 0.92x book, and under 4x EV/EBITDA. A 5.1% dividend yield with a 51% payout ratio is also well covered by 2025 earnings and more than covered by free cash flow. Those are real supports. But I do not think the right response is to say intrinsic value must therefore be $38-$43. When earnings have been falling at a high-teens annual clip and recent quarterly net income has cratered to $66M-$79M, low multiples can be rational because the “E” and the normalized EBITDA are moving down fast enough to offset the appearance of cheapness.
The strongest counterargument is that the market has overreacted to late-cycle weakness and is capitalizing trough earnings as if they are permanent. On that view, LKQ remains a category leader with solid ROIC of 11.9%, durable gross margins, and cash generation that dwarfs reported net income, implying depreciation/amortization and working-capital dynamics are making GAAP earnings look worse than owner earnings. If free cash flow can stay near $800M while the equity is worth $5.9B, then even zero growth can justify a much higher stock, especially with no apparent balance-sheet stress. I take that seriously. If the latest sub-3% net margins are charge-distorted and the underlying run-rate is closer to the 2024-2025 mid-5% range, then $23 is too low. But the trend from 2022 to 2025 is too persistent for me to wave away, and a stock does not usually sit below book and at 4x EV/EBITDA without the market seeing a real deterioration in forward earnings quality.
What would change my mind is evidence that 2025 and the last two quarters were the floor rather than the new base. Specifically, I would want to see revenue return to at least low-single-digit growth and operating income stabilize back above a $1.1B annualized pace, with quarterly net margins recovering to 4.5%+ for two consecutive quarters. If the next few reports show revenue holding around $3.4B-$3.6B but net income rebounding back toward $150M-$180M per quarter, then the current valuation is too punitive and I would move bullish quickly. If instead free cash flow also starts following earnings down and 2026 annual net income tracks closer to a $300M-$400M run-rate than 2025’s $608M, then even $23 will not be obviously cheap.
Grok Reading
The numbers tell a story of a cash-compounding distributor whose earnings power is being steadily eroded, not a business that has already broken. Revenue has slipped from $14.36B in 2024 to $13.65B in 2025 (−4.9% YoY) with a multi-year CAGR of only −0.8%, so the top line is soft rather than collapsing. The real damage is in the P&L stack: operating income has fallen from $1.58B in 2022 to $993M in 2025, net income from $1.15B to $608M, and the two most recent quarters printed 2.1–2.3% net margins against a prior run-rate near 5%. That is a genuine compression event, not noise. Yet free cash flow still came in at $847M on only $216M of capex, operating cash flow was $1.06B, and the balance sheet carries a reported debt-to-equity of zero with $319M cash against $6.56B of equity. At a $5.91B market cap the stock screens at 9.9× trailing earnings, 0.92× book, 0.44× sales, 4.0× EV/EBITDA and a 14.3% FCF yield with a 5.1% dividend covered at a 51% payout. Those are distressed multiples on a still-cash-generative franchise.
What stands out against the quantitative models is the mismatch between the severity of the multiple and the actual rate of fundamental decay. The valuation engine’s $38–43 fair-value range (signal-adjusted ~$38.70) implies roughly 65% upside and correctly notes the shares trade below a no-growth floor. The “strong market headwinds / value-trap” layer and the near-zero thesis score (bull mass 81.8 vs bear mass 81) are reacting to the same EV/ADAS/OEM-share narrative that has already crushed the stock 37%+ off highs. Collision frequency is declining and ADAS will keep pressuring it, but severity and repair complexity have historically offset a large part of that volume loss, and the installed ICE fleet turns over over more than a decade. Revenue has not fallen at anything like the rate earnings have; the problem is margin, mix and cost, not an evaporating addressable market. A 14% FCF yield already capitalizes a multi-year decline in cash generation. For the current price to be fair, FCF would need to structurally settle well below $500M—something the 2025 cash-flow statement does not yet show.
The strongest case against this read is the recent quarterly trajectory and the multi-year earnings CAGR of −19.5%. Q4 2025 net income of $66M and Q1 2026 of $79M are not “cyclical soft patches”; they are half the run-rate of mid-2024/early-2025 quarters. If 2–2.5% net margins become the permanent regime, annualized earnings drop toward $300M, the headline 9.9× PE becomes a mid-teens multiple on depressed power, and the FCF yield compresses as working-capital and restructuring absorb cash. OEM certified-part programs and insurer steering are real share threats in the higher-margin collision segment, and the company’s own operating margin has already slid from the low teens toward 7.3%. The market is not inventing the impairment story; it is observing three consecutive years of lower operating profit and deciding the trend continues. That is a coherent bear case, and it is why conviction cannot be high.
I weigh it differently because price already embeds an outcome worse than the cash-flow evidence. Even a further 25–30% haircut to FCF still leaves a double-digit free-cash-flow yield, a covered 5% dividend, and a sub-book equity claim on a scaled North American and European distribution network that remains a sector leader. The narrative layer itself admits the discount is “almost entirely fundamental anxiety” with minimal cult or storytelling premium—i.e., this is a show-me stock, not a meme. Stabilization of operating margin in the mid-to-high single digits, rather than a heroic re-acceleration of growth, is all that is required for the multiple to re-rate. The data do not yet prove terminal decline; they prove a painful transition that has been more than discounted.
What would flip the verdict: two more quarters of sub-3% net margins accompanied by FCF falling below $600M annualized would confirm the bear structural case and push the stock to fairly valued or worse at $23. Conversely, a print that restores operating margin above 8% with flat-to-up revenue, or a clear capital-return increase against the fortress balance sheet, would turn this into a high-conviction undervaluation closer to the $35–40 zone the models already flag.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
LKQ is a mature auto parts distributor throwing off consistent cash: FCF of $847M in 2025 on $13.65B revenue, with OCF/NI of 1.43x and negative accruals (-2.3% of assets) confirming reported earnings convert to cash. Beneish M at -2.54 shows no manipulation flags, and the diluted share count has shrunk from 297.7M in 2021 to 257.8M in 2025 (-3.5% CAGR), so per-share value is being concentrated. Liquidity is thin relative to size (cash $319M, only 5.4% of market cap) but the business self-funds. The concern is trajectory: revenue peaked at $14.36B in 2024 and fell to $13.65B in 2025, gross margin has compressed every year from 40.7% to 38.6%, operating margin has collapsed from 12.4% (2022) to 7.3% (2025), and net income has nearly halved from $1.15B to $608M over three years. Altman Z at 2.44 (grey zone) reflects a leveraged balance sheet typical of a roll-up. Insider tape shows only tax-withholding (F) and awards (A) — zero open-market buying to signal conviction in the turn. The business is durable and cash-generative but is clearly deteriorating operationally, not compounding.
Verify before trusting this (5)
- Total debt load and maturity schedule to contextualize the grey-zone Altman Z and $319M cash
- Whether margin compression is cyclical (aftermarket demand) or structural (competition, mix)
- Segment detail — is the European roll-up underperforming vs North America?
- SBC as % of revenue to confirm buybacks are truly reducing float, not just offsetting grants
- Goodwill and intangibles balance given the acquisitive history — impairment risk if margins stay depressed
The composite fair value of $43.28 and signal-adjusted $38.69 both sit well above the $23.36 price, with three independent methods (DCF $44.53, EPV floor $38.75, anchored P/E $45.31) clustering in the high-30s to mid-40s. That cluster is unusually tight, which raises my confidence that the deserved value is meaningfully north of the tape. Even leaning on the most conservative anchor - the EPV floor of $38.75 - implies roughly 66% upside, and EPV does not require any growth heroics to justify.
Verify before trusting this (4)
- Segment margin bridge - is the OpM slide mix (acquired lower-margin Europe) or same-store erosion?
- Management guidance on margin recovery timeline and any restructuring one-offs already in the run-rate
- EV parts exposure disclosure - what % of revenue is genuinely at secular risk vs mechanical/consumables
- Free cash flow conversion trend - if FCF holds while GAAP margins slip, EPV is more durable than it looks
The non-fundamental pressure on LKQ leans negative. The active narrative is post-bubble-cynicism with minimal intensity but durable staying power - the market has quietly written off auto-cyclical distributors as EV/AV disruption candidates, and there is no cult bid or growth story to offset that drift. Into that backdrop, the July 30 print landed badly: Q2 revenue missed, EPS came in 6% light, and management CUT 2026 guidance citing ERP problems and European weakness. That is exactly the kind of headline that hardens a skeptical narrative rather than breaking it. Macro is roughly neutral (VIX 16, S&P near highs) and LKQ's 0.82 beta means the tape itself is not the problem - the problem is idiosyncratic news flow reinforcing a durable bearish frame. Analyst tone is almost certainly drifting lower on fresh guide-downs and ERP execution concerns, and the 'undervalued?' framing in headlines signals a value-trap discussion, not accumulation. Momentum is flat-to-down (-0.8% CAGR, decelerating), which is consistent with a name nobody wants to defend. Net: a real, ordinary-to-moderate headwind - not a crash setup, just persistent apathy plus a fresh negative catalyst with no offsetting narrative bid.
Verify before trusting this (5)
- Analyst target revisions in the 2-4 weeks post the guide-down - depth and breadth of cuts
- Whether ERP issues get flagged again on the next quarterly update (fading vs entrenched)
- Any sector rotation into defensive/value names that could sweep LKQ up passively
- European auto-repair volume data - the cited source of weakness
- Insider buying at these levels as a sentiment tell
This lens hasn't been run for this ticker yet.
When we made this prediction on Aug 5, 2026, LKQ was $24.49. We expect it to be $27.60 by Feb 2027, and we consider it great value under $26.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Aug 5, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.