olivLaw · US equity research
LKQ Corporation LKQ
Wholesale-Motor Vehicles & Motor Vehicle Parts & Supplies · SIC 5010 · Vertical: Wholesale — durable goods (SIC 50xx)
LKQ distributes alternative replacement parts, components and specialty accessories for vehicles through its North America, Europe and Specialty segments. The company is under pressure now: third-quarter 2026 results were well below expectations in Europe, and leadership and strategy are changing, with a strategic alternatives review that includes a possible sale of the company. Quarterly revenue fell to 3.32 billion USD from 3.50 billion USD a year earlier.
The AI analysis may be outdated: new filings came after its sources (see the «AI analysis» section).
At the close of 04 Nov 2026, LKQ Corporation (LKQ) stock was 20.94 USD (+8.72% on the day), with market capitalisation 5.3 bn USD, P/E 21.0 on diluted EPS of 1.00 USD over the last 12 months, dividend yield 5.79%, beta 0.59, 52-week range 17.10–34.80 USD. Latest reported quarter (Q3 2026): revenue of 3.3 bn USD (−5.1% YoY), net income of -27.0 m USD (−115.0% YoY), diluted EPS -0.10 USD.
Data as of · AI analysis dated · Source: SEC filings and closing prices, computed by olivLaw.
Price history
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Technical reading
- RSI (14)
- 51.4
- neutral
- Bollinger (20, 2)
- 16.41 – 24.31
- in the upper half of the band · %B 0.57 · band width 38.8%
- SMA 50 / 200
- 22.43 / 26.96
- downtrend (price < SMA50 < SMA200)
- MACD (12, 26, 9)
- -0.99 / -1.13
- MACD above signal
Indicators describe past prices; on their own they do not predict direction. On our history the RSI ≤ 40 filter added no return (see the signals methodology).
Performance
| Company | S&P 500 | vs S&P 500 | Vertical median | |
|---|---|---|---|---|
| 1 month | −6.5% | −1.1% | −5.4 pp | — |
| 3 months | −13.1% | −0.5% | −12.7 pp | — |
| 6 months | −27.2% | +4.4% | −31.6 pp | — |
| Year to date | −30.7% | +12.3% | −43.0 pp | — |
| 1 year | −31.1% | +13.5% | −44.7 pp | +9.4% |
| 3 years | −53.4% | +76.4% | −129.8 pp | +35.6% |
| 5 years | −63.4% | +63.7% | −127.1 pp | — |
Price returns, dividends excluded.
Quarterly results
Latest quarter: Q3 2026 · 30 Sept 2026
Quarterly margins
Quarterly statements · USD
| Fiscal year | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 | Q3 '26 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 3.2 bn | 3.3 bn | 3.5 bn | 3.5 bn | 3.3 bn | 3.5 bn | 3.4 bn | 3.3 bn |
| Cost of revenue | 2.0 bn | 2.0 bn | 2.2 bn | 2.2 bn | 2.1 bn | 2.1 bn | 2.1 bn | 2.1 bn |
| Gross profit | 1.3 bn | 1.3 bn | 1.4 bn | 1.3 bn | 1.3 bn | 1.3 bn | 1.3 bn | 1.2 bn |
| SG&A | 885.0 m | 949.0 m | 958.0 m | 958.0 m | 948.0 m | 994.0 m | 990.0 m | 959.0 m |
| Operating income | 259.0 m | 267.0 m | 299.0 m | 274.0 m | 153.0 m | 217.0 m | 225.0 m | 53.0 m |
| Depreciation & amortisation | 106.0 m | 100.0 m | 105.0 m | 95.0 m | 106.0 m | 99.0 m | 92.0 m | 89.0 m |
| Interest expense | -42.0 m | -57.0 m | -58.0 m | -55.0 m | -54.0 m | -53.0 m | -55.0 m | -56.0 m |
| Pre-tax income | 202.0 m | 220.0 m | 252.0 m | 223.0 m | 105.0 m | 167.0 m | 180.0 m | 5.0 m |
| Income tax | 55.0 m | 61.0 m | 67.0 m | 45.0 m | 31.0 m | 44.0 m | 48.0 m | 32.0 m |
| Net income | 157.0 m | 169.0 m | 193.0 m | 180.0 m | 66.0 m | 79.0 m | 136.0 m | -27.0 m |
| Diluted EPS | 0.60 ≈ | 0.65 | 0.75 | 0.70 | 0.26 ≈ | 0.31 ≈ | 0.53 | -0.10 |
| Operating cash flow | 235.0 m | -3.0 m | 296.0 m ≈ | 440.0 m ≈ | 330.0 m | -56.0 m | 111.0 m ≈ | 411.0 m ≈ |
| Capex | 86.0 m | 54.0 m | 53.0 m | 53.0 m ≈ | 56.0 m | 40.0 m | 51.0 m ≈ | 39.0 m ≈ |
| Dividends paid | 78.0 m | 78.0 m | 78.0 m ≈ | 78.0 m ≈ | 76.0 m | 77.0 m | 77.0 m ≈ | 76.0 m ≈ |
| Share repurchases | 80.0 m | 40.0 m | 39.0 m ≈ | 40.0 m ≈ | 40.0 m | 1.0 m | 52.0 m ≈ | 30.0 m ≈ |
≈ derived quarter (cumulative difference / share-days average)
E/P over time
E/P = trailing-12-month diluted EPS / price at quarter end. E/P is the inverse of P/E and stays defined when earnings are negative.
Today's P/E sits at the 83 percentile of its own 36-quarter history (min 11.2, median 15.7, max 23.7; quarters with earnings only).
Fiscal years
| Fiscal year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 11.9 bn | 12.5 bn | 11.6 bn | 13.1 bn | 12.8 bn | 13.3 bn | 13.8 bn | 13.7 bn |
| Revenue YoY | +22.0% | +5.3% | −7.0% | +12.6% | −2.3% | +3.7% | +4.2% | −1.2% |
| Net income | 480.1 m | 541.3 m | 638.0 m | 1.1 bn | 1.2 bn | 938.0 m | 693.0 m | 608.0 m |
| Net income YoY | −10.0% | +12.7% | +17.9% | +71.2% | +5.3% | −18.4% | −26.1% | −12.3% |
| Diluted EPS | 1.52 | 1.74 | 2.09 | 3.66 | 4.13 | 3.49 | 2.62 | 2.35 |
| Diluted EPS YoY | −11.6% | +14.5% | +20.1% | +75.1% | +12.8% | −15.5% | −24.9% | −10.3% |
| net % | 4.0% | 4.3% | 5.5% | 8.3% | 9.0% | 7.1% | 5.0% | 4.5% |
| Free cash flow | 460.7 m | 798.3 m | 1.3 bn | 1.1 bn | 1.0 bn | 998.0 m | 810.0 m | 847.0 m |
Reported results vs expectations
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Balance sheet & financial health
Fiscal year 2025 · 31 Dec 2025
- Cash
- 319.0 m USD
- Financial debt
- unavailable USD
- Net debt
- unavailable USD
- Equity
- 6.6 bn USD
- Total assets
- 15.1 bn USD
- Debt / equity
- unavailable
- Current ratio
- 1.67x
- ROE
- 9.7%
- ROA
- 4.0%
- FCF margin
- 6.2%
Financial statements (source on every figure)
Revenue and net income (USD)
Margins
Income statement · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Revenue | 11.6 bn | 13.1 bn | 12.8 bn | 13.3 bn | 13.8 bn | 13.7 bn | SEC (XBRL)· 19 Feb 2026verified |
| Cost of revenue | 7.0 bn | 7.8 bn | 7.6 bn | 7.9 bn | 8.4 bn | 8.4 bn | SEC (XBRL)· 19 Feb 2026verified |
| Gross profit | 4.6 bn | 5.3 bn | 5.2 bn | 5.4 bn | 5.4 bn | 5.3 bn | SEC (XBRL)· 19 Feb 2026verified |
| SG&A | 3.3 bn | 3.6 bn | 3.5 bn | 3.7 bn | 3.8 bn | 3.8 bn | SEC (XBRL)· 19 Feb 2026verified |
| Operating income | 986.0 m | 1.5 bn | 1.6 bn | 1.3 bn | 1.1 bn | 993.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Depreciation & amortisation | 299.0 m | 284.0 m | 264.0 m | 319.0 m | 406.0 m | 418.0 m | SEC (XBRL)· 19 Feb 2026verified |
| EBITDA | 1.3 bn ≈ | 1.8 bn ≈ | 1.8 bn ≈ | 1.6 bn ≈ | 1.6 bn ≈ | 1.4 bn ≈ | SEC (XBRL)· 19 Feb 2026derived |
| Interest expense | -104.0 m | -72.0 m | -78.0 m | -214.0 m | -238.0 m | -224.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Pre-tax income | 885.0 m | 1.4 bn | 1.5 bn | 1.2 bn | 926.0 m | 800.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Income tax | 250.0 m | 331.0 m | 385.0 m | 304.0 m | 265.0 m | 204.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Net income | 638.0 m | 1.1 bn | 1.2 bn | 938.0 m | 693.0 m | 608.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Diluted EPS | 2.09 | 3.66 | 4.13 | 3.49 | 2.62 | 2.35 | SEC (XBRL)· 19 Feb 2026verified |
| Weighted average diluted shares | 305.0 m | 297.7 m | 278.0 m | 268.3 m | 263.9 m | 257.8 m | SEC (XBRL)· 19 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating income + Depreciation & amortisation.
Balance sheet · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Cash | 312.0 m | 274.0 m | 278.0 m | 299.0 m | 234.0 m | 319.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Inventories | 2.4 bn | 2.6 bn | 2.8 bn | 3.1 bn | 3.2 bn | 3.4 bn | SEC (XBRL)· 19 Feb 2026verified |
| Current assets | 4.0 bn | 4.3 bn | 4.3 bn | 4.9 bn | 4.9 bn | 5.2 bn | SEC (XBRL)· 19 Feb 2026verified |
| Property, plant & equipment, net | 1.2 bn | 1.3 bn | 1.2 bn | 1.5 bn | 1.4 bn | 1.5 bn | SEC (XBRL)· 19 Feb 2026verified |
| Goodwill | 4.6 bn | 4.5 bn | 4.3 bn | 5.3 bn | 5.2 bn | 5.4 bn | SEC (XBRL)· 19 Feb 2026verified |
| Intangibles (excl. goodwill) | 814.2 m | 746.0 m | 653.0 m | 1.3 bn | 1.2 bn | 1.1 bn | SEC (XBRL)· 19 Feb 2026verified |
| Total assets | 12.4 bn | 12.6 bn | 12.0 bn | 15.1 bn | 15.0 bn | 15.1 bn | SEC (XBRL)· 19 Feb 2026verified |
| Accounts payable | 932.4 m | 1.2 bn | 1.3 bn | 1.6 bn | 1.8 bn | 2.1 bn | SEC (XBRL)· 19 Feb 2026verified |
| Current liabilities | 2.0 bn | 2.2 bn | 2.3 bn | 3.3 bn | 2.9 bn | 3.1 bn | SEC (XBRL)· 19 Feb 2026verified |
| Equity | 5.7 bn | 5.8 bn | 5.5 bn | 6.2 bn | 6.0 bn | 6.6 bn | SEC (XBRL)· 19 Feb 2026verified |
Cash flow · USD
| Line | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Source (latest year) |
|---|---|---|---|---|---|---|---|
| Operating cash flow | 1.4 bn | 1.4 bn | 1.3 bn | 1.4 bn | 1.1 bn | 1.1 bn | SEC (XBRL)· 19 Feb 2026verified |
| Capex | 173.0 m | 293.0 m | 222.0 m | 358.0 m | 311.0 m | 216.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Free cash flow | 1.3 bn ≈ | 1.1 bn ≈ | 1.0 bn ≈ | 998.0 m ≈ | 810.0 m ≈ | 847.0 m ≈ | SEC (XBRL)· 19 Feb 2026derived |
| Investing cash flow | -166.0 m | -419.0 m | 172.0 m | -2.4 bn | -406.0 m | 185.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Financing cash flow | -1.5 bn | -985.0 m | -1.4 bn | 1.1 bn | -746.0 m | -1.2 bn | SEC (XBRL)· 19 Feb 2026verified |
| Dividends paid | 0 | 73.0 m | 284.0 m | 302.0 m | 318.0 m | 310.0 m | SEC (XBRL)· 19 Feb 2026verified |
| Share repurchases | 117.0 m | 877.0 m | 1.0 bn | 38.0 m | 360.0 m | 159.0 m | SEC (XBRL)· 19 Feb 2026verified |
≈ computed by olivLaw from the reported lines of the same year: Operating cash flow − Capex.
Computed indicators
Growth
Profitability
Returns
Balance sheet
Liquidity
Cash
Efficiency
Market and valuation
1 indicators that do not apply to the sector.
Valuation
olivLaw classification
Score: 58 / 100
A scoring methodology on indicators and valuation, not investment advice.
Closing price
04 Nov 2026Source: olivLaw, closing series
Market cap: 5.3 bn USD
Key indicators
Coverage and freshness
Score by group
- Balance sheet45
- Valuation73
- Quality74
- Growth9
- Returns100
Estimated value range
The combined range = the median of the valid methods' low, central and high values; it is not a probability interval and does not cover every result. Envelope of all methods: 13.89 – 27.18 USD.
Valuation assumptions are editorial choices, not measured; beta is not measured.
Method ranges (USD per share)
— — Mid · ▏ Price
Valuation methods
- DCF (discounted cash flow)unavailable · net debt missing: EV cannot be bridged to equity (missing debt is not zero)
- Peers: EV/EBITDAunavailable · net debt missing: EV cannot be bridged to equity (missing debt is not zero)
- Peers: P/E13.89 – 27.18 (Mid 20.29)24 companies used · median multiple 20.4x · quartiles 13.9x – 27.3xARW, AVT, BCC, CNM, DXPE, FERG, FSTR, GIC, GOLD, GWW, HDSN, ITRN, JXG, RS, SCSC, SITE, SNX, SORA, TEL, TLIH, WCC, WLFC, WSO, YDDL
- Dividend discount (DDM)unavailable · input data missing
Classification (SIC) comparables group by industry code, not by economic activity; the direct group is an editorial selection by activity. Members' multiples are on their own trailing twelve months, at their own latest close.
Assumptions (illustrative, editorial)
- Risk-free rate
- 4.3%
- Equity risk premium
- 5.0%
- Beta (default)
- 1.00
- Cost of equity
- 9.3%
- Terminal growth
- 2.5%
Factor scorecard
Neutral profile · Score 58/100
| Factor | Value | Score | Weight used |
|---|---|---|---|
| ROIC · Quality | unavailable | unavailable | — |
| Net margin · Quality | 1.9% | 47 (vs peers) | 9% |
| FCF conversion · Quality | 240.2% | 100 (on a fixed band) | 9% |
| Revenue CAGR 3Y · Growth | 2.2% | 18 (on a fixed band) | 12% |
| EPS CAGR 3Y · Growth | -17.1% | 0 (on a fixed band) | 12% |
| Net debt / EBITDA · Balance sheet | unavailable | unavailable | — |
| Interest coverage · Balance sheet | 3.0x | 23 (on a fixed band) | 9% |
| Current ratio · Balance sheet | 1.7x | 79 (on a fixed band) | 6% |
| P/E (TTM) · Valuation | 21.0x | 52 (vs peers) | 15% |
| EV/EBITDA · Valuation | unavailable | unavailable | — |
| FCF yield · Valuation | 11.5% | 100 (on a fixed band) | 12% |
| Shareholder yield (distributions) · Returns | 8.1% | 100 (on a fixed band) | 9% |
| Payout ratio (FCF) · Returns | 50.2% | 100 (on a fixed band) | 6% |
Factors without a value were dropped; the remaining weights were renormalised.
Score groups
- Balance sheet45/100 · 2/3 factors with a value
- Growth9/100 · 2/2 factors with a value
- Quality74/100 · 2/3 factors with a value
- Returns100/100 · 2/2 factors with a value
- Valuation73/100 · 2/3 factors with a value
Memo
LKQ CORPORATION (LKQ). Latest full fiscal year: 2025; data up to 2026-09-30.
Figures computed from the financial statements: revenue 13.7 bn USD in 2025; YoY growth -1.2%; net margin 1.9%; ROE 4.0%.
The estimated value range is 13.89–27.18 USD per share (median of 1 methods, agreement: single method); assumptions are illustrative. Against the central value of 20.29 USD, the price of 20.94 USD leaves a potential of -3.1% (value / price − 1) and a margin of safety of -3.2% (1 − price / value). The range is the median of the methods' low, central and high values, not a probability interval.
olivLaw score 58/100, methodological classification: neutral profile (score, margin of safety and method agreement together; not a judgement of the right price). Not investment advice.
Text generated deterministically from the figures shown; no language model. Not investment advice.
What supports the thesis
- FCF conversion: 240.2%
- Current ratio: 1.7x
- FCF yield: 11.5%
- Shareholder yield (distributions): 8.1%
- Payout ratio (FCF): 50.2%
What contradicts it
- Revenue CAGR 3Y: 2.2%
- EPS CAGR 3Y: -17.1%
- Interest coverage: 3.0x
Not assessed (insufficient data or a ratio without meaning): ROIC, Net debt / EBITDA, EV/EBITDA.
Versus the vertical median
Wholesale — durable goods (SIC 50xx) · same major group (2-digit SIC) · compared with 39 companies
Multiples and returns vs the median
Price rebased to 100 (monthly, 5 years)
Companies in the vertical
| Market cap | P/E | ROE | Net margin | Revenue YoY | 1A / 3A | |
|---|---|---|---|---|---|---|
| GWWW.W. Grainger, Inc. | 69.7 bn | 32.7 | 54.7% | 11.2% | +4.5% | +57% / +89% |
| TELTe Connectivity PLC | 63.8 bn | 27.5 | 18.5% | 12.6% | +8.9% | −3% / +68% |
| FERGFerguson Enterprises Inc. | 48.1 bn | 25.1 | 32.8% | 6.3% | +3.8% | −1% / +45% |
| RSReliance, Inc. | 22.5 bn | 20.6 | 14.7% | 6.4% | +3.3% | +58% / +61% |
| SNXTd Synnex Corporation | 18.4 bn | 14.0 | 14.9% | 1.8% | +6.9% | +51% / +134% |
| GPCGenuine Parts Co | 17.4 bn | 481.8 | 0.7% | 0.1% | +3.5% | −3% / −5% |
| WCCWESCO International, Inc. | 15.4 bn | 19.8 | 15.4% | 3.0% | +7.8% | +18% / +103% |
| QXOQxo, Inc. | 13.1 bn | — | -2.8% | -4.1% | +11,925.0% | −32% / −57% |
| ARWArrow Electronics, Inc. | 10.3 bn | 12.9 | 12.2% | 2.3% | +10.5% | +88% / +71% |
| AVTAvnet, Inc. | 7.0 bn | 21.4 | 6.7% | 1.2% | +24.5% | +80% / +83% |
| LKQLkq Corporation | 5.3 bn | 21.0 | 4.0% | 1.9% | −1.2% | −31% / −53% |
| SITESiteOne Landscape Supply, Inc. | 5.1 bn | 31.9 | 9.6% | 3.4% | +3.6% | −12% / −16% |
| BCCBoise Cascade Company | 2.7 bn | 22.9 | 5.7% | 1.8% | −4.8% | +2% / −29% |
| DXPEDXP Enterprises, Inc. | 2.5 bn | 27.9 | 18.5% | 4.4% | +11.9% | +69% / +441% |
| GICGlobal Industrial Co | 1.8 bn | 19.8 | 27.6% | 6.3% | +4.8% | +66% / +34% |
| DSGRDistribution Solutions Group, Inc. | 1.6 bn | 180.0 | 1.4% | 0.4% | +9.8% | +26% / +38% |
| GOLDGold.com, Inc. | 1.2 bn | 13.7 | 10.8% | 0.3% | +132.4% | +44% / +45% |
| SCSCScanSource, Inc. | 1.1 bn | 15.7 | 8.7% | 2.4% | +6.1% | +39% / +70% |
| ITRNIturan Location & Control Ltd. | 1.1 bn | 18.2 | 28.8% | 16.1% | +6.8% | +33% / +98% |
| WLFCWillis Lease Finance Corp | 1.0 bn | 12.7 | 11.5% | 9.6% | +28.3% | +16% / +213% |
| FSTRFoster L B Co | 438.2 m | 32.2 | 7.6% | 2.3% | +1.7% | +54% / +109% |
| ASPNAspen Aerogels, Inc. | 398.3 m | — | -50.4% | -62.4% | −40.1% | +49% / −54% |
| HDSNHudson Technologies Inc | 185.6 m | 21.4 | 3.6% | 3.5% | +4.0% | −35% / −64% |
| TLIHTen-League International Holdings Limited | 167.1 m | 37.9 | 49.6% | 7.3% | +38.4% | +59% / unavailable |
| SORAAsiaStrategy | 60.4 m | 4.8 | 106.1% | 111.9% | −37.7% | −37% / unavailable |
1- and 3-year price returns: for LKQ from daily closes (the same as the performance table), for the other companies from month-end closes.
olivLaw engine forecast
The world engine ran after the company's latest material disclosure. Probabilities are of TOUCHING a level within the horizon (not closing there) and sit next to the random walk (p_rw), the no-information benchmark.
The engine has no published run for this company yet.
Valuation scenarios (editable assumptions)
Illustrative scenarios
Illustrative: not forecasts and without probabilities. Each case is one coherent set of assumptions, computed on today's figures.
Estimated price (USD)
| Estimated price | Bear | Base | Bull |
|---|---|---|---|
| 1 years | 12.21 Total return -42% · Per year -42% | 21.61 Total return 3% · Per year 3% | 32.58 Total return 56% · Per year 56% |
| 3 years | 11.30 Total return -46% · Per year -19% | 22.56 Total return 8% · Per year 3% | 37.43 Total return 79% · Per year 21% |
| 5 years | 10.47 Total return -50% · Per year -13% | 23.56 Total return 13% · Per year 2% | 43.00 Total return 105% · Per year 15% |
- Exit P/E± 5.64
- Net margin± 3.95
- Annual revenue growth± 3.31
- Annual dilution± 0.33
AI analysis
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 23 Oct 2026; since then the company filed 8-K (29 Oct 2026 · results), 10-Q (29 Oct 2026).
In brief
LKQ distributes alternative replacement parts, components and specialty accessories for vehicles through its North America, Europe and Specialty segments. The company is under pressure now: third-quarter 2026 results were well below expectations in Europe, and leadership and strategy are changing, with a strategic alternatives review that includes a possible sale of the company. Quarterly revenue fell to 3.32 billion USD from 3.50 billion USD a year earlier.
SWOT
Strengths
- The company has the largest alternative parts distribution network in North America and broad coverage in Europe, enabling fast deliveries and high service levels 1.
- Relationships with insurers and quality certification programs can support the use of alternative parts in repairs 1.
- A broad product range, from collision parts to engines and transmissions, and proprietary inventory systems provide a solid sales base 1.
Weaknesses
- European performance fell sharply in the third quarter of 2026 because of operational problems and lower volumes 3.
- Purchasing is concentrated among a few suppliers, and long supply chains can create vulnerabilities 1.
- The Specialty segment has taken a goodwill impairment and lacks a clear long-term strategy while the company evaluates its sale 12.
Opportunities
- If simplification and inventory optimization in Europe succeed, margins could recover toward better levels 13.
- Small tuck-in acquisitions with clear synergies could complement the portfolio, in line with the stated strategy 1.
- The strategic review could lead to a more efficient structure or a transaction that unlocks value for shareholders 13.
Threats
- OEM pressure on the aftermarket and restrictions on telematics could reduce access to certain products 1.
- The shift to electric vehicles could reduce demand for mechanical parts that are important to the company 1.
- Intellectual property disputes and customs seizures of products could limit aftermarket sales 1.
Risks
- Failure to fix Europehigh
ERP-related operational problems and lower volumes in Europe could persist and further weigh on revenue and margins 3.
- Strategic uncertaintyhigh
The strategic alternatives review and leadership changes could create volatility and affect long-term plans 13.
- Asset impairmentsmedium
Goodwill and asset impairments have already been recorded, and if performance weakens further, additional impairments could follow 13.
- Intellectual property litigationmedium
OEM claims and customs seizures can restrict sales of certain aftermarket products and generate legal costs 1.
- Supplier and logistics dependencelow
Purchasing concentrated among a few suppliers in Taiwan and Asia, with long lead times, can expose the company to disruption 1.
Investment thesis
What would need to be true (bull case)
- If operational restructuring in Europe succeeds, the company could recover margins and benefit from its leading position in alternative parts distribution 13.
- The North America distribution network and insurer relationships provide a stable base, and the North American segment performed in line with expectations 13.
- The strategic review could lead to a transaction that unlocks value for shareholders if the future structure proves efficient 13.
What would break the thesis
- Falling organic revenue and Europe's problems could persist, and the withdrawal of 2026 guidance makes future performance hard to estimate 3.
- OEM pressure, the shift to electric vehicles and intellectual property litigation could shrink the market open to alternative parts 1.
- Leadership change and uncertainty over selling segments could disrupt strategy execution and weigh on customer and partner confidence 13.
What to watch
- Full third-quarter results and management comments on EuropeQ3 2026
- Assumption of the CEO role and any strategy changesQ4 2026
- Outcome of the strategic alternatives review and any sale of the company or the Specialty segment2027
- New financial guidance for the coming year and the evolution of European marginsnext 10-K
Products, market & competition
AI-generatedAI-generated analysis (Claude) from cited public sources; it may contain errors. Not investment advice. As of 27 Oct 2026 · Model: claude-haiku-5-5.
Possibly outdated: the newest document it read is from 23 Oct 2026; since then the company filed 8-K (29 Oct 2026 · results), 10-Q (29 Oct 2026).
The business
LKQ Corporation is a global distributor of vehicle products, including replacement parts, components and systems used in vehicle repair and maintenance, as well as specialty products and accessories that improve performance, functionality and appearance 1. The company sells mainly alternative parts, meaning alternatives to new OEM parts: aftermarket parts, salvaged parts from total loss vehicles, and reconditioned or remanufactured parts 1. Parts and services represented 97.5% of consolidated revenue in fiscal 2025 1. In September 2025 LKQ sold its Self Service segment to an affiliate of Pacific Avenue Capital Partners, and in January 2026 its board announced a comprehensive review of strategic alternatives, including a potential sale of the company 1.
Segments
North America
The North America segment supplies collision parts, paint and mechanical parts across the U.S., Canada and Mexico and operates what it describes as the largest distribution network of alternative vehicle parts in the region 1. In fiscal 2025, approximately 44% of aftermarket purchases came from the top six vendors, a meaningful supplier concentration 1. In the third quarter of 2026 management said the segment performed in line with expectations despite softer market conditions 3.
Europe
The Europe segment operates in roughly 20 countries across continental Europe and the U.K. and holds more than 900000 SKUs in inventory 1. In the third quarter of 2026, organic parts and services revenue fell 9.8% and segment EBITDA margin was between 4.1% and 5.1%, compared with 10.0% a year earlier, reflecting ERP implementation problems in Germany and volume declines in the U.K. and Benelux 3. The company retained Alvarez & Marsal to advise on its European operations 3.
Specialty
The Specialty segment distributes specialty vehicle products and accessories mainly in the U.S. and Canada and is being evaluated as part of the strategic review 12. In fiscal 2025 the company recorded a 52 million USD goodwill impairment for this segment, driven by lower market multiples and weaker long-term growth than previously forecast 1.
Market context
The alternative vehicle parts market is highly competitive, with many suppliers including OEMs, local operators, regional distributors, internet suppliers and recyclers 1. Demand depends on accident frequency, the age of the vehicle population, repair shop customers and insurers, who influence the choice of alternative parts 1. Recent reports point to a softer market, particularly in Europe, where volume pressure has increased 23.
Trends
- OEM pressure on the aftermarketheadwind
OEMs have tried to increase their market share and restrict the use of alternative parts through telematics, patents and repair shop certification programs 1. If these efforts intensify, they could limit the company's access to certain product categories 1.
- Changing vehicle fleetheadwind
The growth of electric vehicles, which lack traditional engines and transmissions, could reduce sales of engines and transmissions, important categories for the company especially in North America 1. A newer vehicle fleet also reduces demand for mechanical repairs 1.
- Portfolio and cost simplificationmixed
The company is simplifying its portfolio, reducing SKUs in Europe, consolidating suppliers and raising private-label penetration, which could improve margins if execution succeeds 1. Concrete results are needed to confirm this effect.
- Uncertainty from the strategic reviewmixed
The review of strategic alternatives, including a possible sale of the company, could lead to major changes in structure and strategy, and the period of uncertainty could affect customer and partner confidence 123.
Competitive position
LKQ competes with all suppliers of collision and mechanical parts, including OEMs, aftermarket suppliers, recyclers and online distributors 1. The company differentiates itself through the breadth of its distribution network, its relationships with insurers and, to a lesser extent, price 1. In Europe local competitors can compete effectively on price and service, and some form cooperative groups 1.
Competitive pressure is higher because some rivals have greater financial, technical and distribution resources, lower cost structures or stronger relationships with insurers and repair shops 1. Online marketplaces can limit the company's access to certain sales channels 1.
- OEMs (original equipment manufacturers)
Compete mainly on price and to a lesser extent on service and quality, and exert pricing pressure on aftermarket parts 1.
- Aftermarket and regional distributors
Local and regional competitors that can compete effectively on price and service, sometimes through cooperation 1.
- Recyclers and remanufacturers
Suppliers of recycled and reconditioned parts that compete directly with the company's salvage parts business 1.
- Online parts platforms
Internet suppliers that add competitive pressure and can control access to marketplaces 1.
Links, dependencies and risks
Who the company is tied to, from its own SEC filings (customers, suppliers, production, partners, competitors, countries, regulation), from the 5 %+ holders' statements (13D/13G) and from what other companies say about it. Click a node for its evidence; on a listed company the graph moves to it.
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News & filings
In the press
No news in our archive over the last 180 days.
SEC filings
- Quarterly report29 Oct 2026
- Current report29 Oct 2026Results of operations · Other events · Financial statements and exhibits
- Current report23 Oct 2026Results of operations · Departure or appointment of officers · Regulation FD disclosure · Financial statements and exhibits
- Quarterly report30 Jul 2026
- Current report30 Jul 2026Results of operations · Financial statements and exhibits
- Current report08 May 2026Amendments to articles or bylaws · Shareholder vote · Financial statements and exhibits
- Quarterly report30 Apr 2026
- Current report30 Apr 2026Results of operations · Financial statements and exhibits
- Proxy statement24 Mar 2026
- Current report06 Mar 2026Departure or appointment of officers
Sources
- [1] Form 10-K, fiscal year ended 2025-12-31 · SEC / LKQ Corporation · 19 Feb 2026
- [2] Form 10-Q, quarter ended 2026-06-30 · SEC / LKQ Corporation · 30 Jul 2026
- [3] Form 8-K, results release (exhibit 99.1) · SEC / LKQ Corporation · 23 Oct 2026
Figures computed by olivLaw from SEC filings and closing prices; the qualitative analysis is AI-generated from cited sources. Not investment advice.