LKQ CORP (LKQ) Stock Fundamental Analysis
NASDAQ:LKQ - Nasdaq - US5018892084 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to LKQ. LKQ was compared to 18 industry peers in the Distributors industry. LKQ has only an average score on both its financial health and profitability. LKQ has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
LKQ had positive earnings in the past year.
In the past year LKQ had a positive cash flow from operations.
LKQ had positive earnings in each of the past 5 years.
In the past 5 years LKQ always reported a positive cash flow from operatings.
1.2 Ratios
LKQ has a Return On Assets (4.53%) which is in line with its industry peers.
LKQ has a Return On Equity (11.35%) which is in line with its industry peers.
The Return On Invested Capital of LKQ (8.10%) is comparable to the rest of the industry.
LKQ had an Average Return On Invested Capital over the past 3 years of 9.30%. This is significantly below the industry average of 23.10%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.53% | ||
| ROE | 11.35% | ||
| ROIC | 8.1% |
ROA(3y)6.79%
ROA(5y)6.84%
ROE(3y)15.91%
ROE(5y)15.58%
ROIC(3y)9.3%
ROIC(5y)9.18%
1.3 Margins
The Profit Margin of LKQ (4.97%) is better than 66.67% of its industry peers.
LKQ's Profit Margin has improved in the last couple of years.
LKQ has a better Operating Margin (9.35%) than 72.22% of its industry peers.
In the last couple of years the Operating Margin of LKQ has grown nicely.
The Gross Margin of LKQ (39.27%) is better than 72.22% of its industry peers.
LKQ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.35% | ||
| PM (TTM) | 4.97% | ||
| GM | 39.27% |
OM growth 3Y-6.3%
OM growth 5Y3.68%
PM growth 3Y-16.76%
PM growth 5Y2.13%
GM growth 3Y-1.22%
GM growth 5Y0.2%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), LKQ is creating some value.
Compared to 1 year ago, LKQ has less shares outstanding
The number of shares outstanding for LKQ has been reduced compared to 5 years ago.
LKQ has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.73 indicates that LKQ is not a great score, but indicates only limited risk for bankruptcy at the moment.
LKQ's Altman-Z score of 2.73 is in line compared to the rest of the industry. LKQ outperforms 44.44% of its industry peers.
LKQ has a debt to FCF ratio of 7.77. This is a slightly negative value and a sign of low solvency as LKQ would need 7.77 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.77, LKQ is in line with its industry, outperforming 55.56% of the companies in the same industry.
LKQ has a Debt/Equity ratio of 0.62. This is a neutral value indicating LKQ is somewhat dependend on debt financing.
LKQ has a Debt to Equity ratio (0.62) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 7.77 | ||
| Altman-Z | 2.73 |
ROIC/WACC0.94
WACC8.59%
2.3 Liquidity
LKQ has a Current Ratio of 1.52. This is a normal value and indicates that LKQ is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.52, LKQ is doing worse than 61.11% of the companies in the same industry.
A Quick Ratio of 0.56 indicates that LKQ may have some problems paying its short term obligations.
LKQ's Quick ratio of 0.56 is on the low side compared to the rest of the industry. LKQ is outperformed by 61.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.52 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
LKQ shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.43%.
Measured over the past years, LKQ shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.08% on average per year.
LKQ shows a decrease in Revenue. In the last year, the revenue decreased by -0.74%.
Measured over the past years, LKQ shows a small growth in Revenue. The Revenue has been growing by 2.80% on average per year.
EPS 1Y (TTM)-4.43%
EPS 3Y-4.22%
EPS 5Y8.08%
EPS Q2Q%-3.66%
Revenue 1Y (TTM)-0.74%
Revenue growth 3Y3.13%
Revenue growth 5Y2.8%
Sales Q2Q%-6.48%
3.2 Future
The Earnings Per Share is expected to grow by 6.68% on average over the next years.
LKQ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.24% yearly.
EPS Next Y1.86%
EPS Next 2Y4.59%
EPS Next 3Y4.92%
EPS Next 5Y6.68%
Revenue Next Year-1.46%
Revenue Next 2Y0.74%
Revenue Next 3Y1.24%
Revenue Next 5Y2.24%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
LKQ is valuated correctly with a Price/Earnings ratio of 12.06.
83.33% of the companies in the same industry are more expensive than LKQ, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of LKQ to the average of the S&P500 Index (26.60), we can say LKQ is valued rather cheaply.
LKQ is valuated reasonably with a Price/Forward Earnings ratio of 10.93.
83.33% of the companies in the same industry are more expensive than LKQ, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.43. LKQ is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.06 | ||
| Fwd PE | 10.93 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LKQ is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, LKQ is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.97 | ||
| EV/EBITDA | 8.64 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of LKQ may justify a higher PE ratio.
PEG (NY)6.49
PEG (5Y)1.49
EPS Next 2Y4.59%
EPS Next 3Y4.92%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.85%, LKQ has a reasonable but not impressive dividend return.
LKQ's Dividend Yield is rather good when compared to the industry average which is at 2.55. LKQ pays more dividend than 83.33% of the companies in the same industry.
LKQ's Dividend Yield is a higher than the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.85% |
5.2 History
LKQ has been paying a dividend for over 5 years, so it has already some track record.
LKQ has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
LKQ pays out 44.94% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP44.94%
EPS Next 2Y4.59%
EPS Next 3Y4.92%
41.59
-0.73 (-1.72%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustryDistributors
Earnings (Last)
Earnings (Next)
Inst Owners104.6%
Inst Owner Change1.07%
Ins Owners0.36%
Ins Owner Change-0.85%
Market Cap10.74B
Analysts81.54
Price Target54.35 (30.68%)
Short Float %3.19%
Short Ratio2.91
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.85% |
Yearly Dividend1.21
Dividend Growth(5Y)N/A
DP44.94%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.54%
Min EPS beat(2)0.47%
Max EPS beat(2)6.61%
EPS beat(4)2
Avg EPS beat(4)-0.13%
Min EPS beat(4)-5.83%
Max EPS beat(4)6.61%
EPS beat(8)3
Avg EPS beat(8)-2.22%
EPS beat(12)5
Avg EPS beat(12)-1.18%
EPS beat(16)9
Avg EPS beat(16)4.46%
Revenue beat(2)0
Avg Revenue beat(2)-2.97%
Min Revenue beat(2)-3.59%
Max Revenue beat(2)-2.36%
Revenue beat(4)0
Avg Revenue beat(4)-3.33%
Min Revenue beat(4)-4.99%
Max Revenue beat(4)-2.36%
Revenue beat(8)1
Avg Revenue beat(8)-2.19%
Revenue beat(12)2
Avg Revenue beat(12)-2.17%
Revenue beat(16)5
Avg Revenue beat(16)-0.85%
PT rev (1m)0%
PT rev (3m)4.4%
EPS NQ rev (1m)-5.39%
EPS NQ rev (3m)-7.99%
EPS NY rev (1m)-0.91%
EPS NY rev (3m)-2.9%
Revenue NQ rev (1m)-0.86%
Revenue NQ rev (3m)-1.5%
Revenue NY rev (1m)-1.12%
Revenue NY rev (3m)-2.55%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.06 | ||
| Fwd PE | 10.93 | ||
| P/S | 0.76 | ||
| P/FCF | 18.97 | ||
| P/OCF | 12.41 | ||
| P/B | 1.74 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.64 |
EPS(TTM)3.45
EY8.3%
EPS(NY)3.81
Fwd EY9.15%
FCF(TTM)2.19
FCFY5.27%
OCF(TTM)3.35
OCFY8.06%
SpS54.68
BVpS23.92
TBVpS-1.94
PEG (NY)6.49
PEG (5Y)1.49
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.53% | ||
| ROE | 11.35% | ||
| ROCE | 11.04% | ||
| ROIC | 8.1% | ||
| ROICexc | 8.26% | ||
| ROICexgc | 19.17% | ||
| OM | 9.35% | ||
| PM (TTM) | 4.97% | ||
| GM | 39.27% | ||
| FCFM | 4.01% |
ROA(3y)6.79%
ROA(5y)6.84%
ROE(3y)15.91%
ROE(5y)15.58%
ROIC(3y)9.3%
ROIC(5y)9.18%
ROICexc(3y)9.54%
ROICexc(5y)9.42%
ROICexgc(3y)21.74%
ROICexgc(5y)20.87%
ROCE(3y)12.68%
ROCE(5y)12.51%
ROICexcg growth 3Y-5.75%
ROICexcg growth 5Y4.73%
ROICexc growth 3Y-8.2%
ROICexc growth 5Y3.17%
OM growth 3Y-6.3%
OM growth 5Y3.68%
PM growth 3Y-16.76%
PM growth 5Y2.13%
GM growth 3Y-1.22%
GM growth 5Y0.2%
F-Score5
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.62 | ||
| Debt/FCF | 7.77 | ||
| Debt/EBITDA | 2.22 | ||
| Cap/Depr | 73.65% | ||
| Cap/Sales | 2.12% | ||
| Interest Coverage | 5.34 | ||
| Cash Conversion | 50.12% | ||
| Profit Quality | 80.74% | ||
| Current Ratio | 1.52 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 2.73 |
F-Score5
WACC8.59%
ROIC/WACC0.94
Cap/Depr(3y)90.97%
Cap/Depr(5y)86.79%
Cap/Sales(3y)2.16%
Cap/Sales(5y)2.04%
Profit Quality(3y)104.5%
Profit Quality(5y)122.23%
High Growth Momentum
Growth
EPS 1Y (TTM)-4.43%
EPS 3Y-4.22%
EPS 5Y8.08%
EPS Q2Q%-3.66%
EPS Next Y1.86%
EPS Next 2Y4.59%
EPS Next 3Y4.92%
EPS Next 5Y6.68%
Revenue 1Y (TTM)-0.74%
Revenue growth 3Y3.13%
Revenue growth 5Y2.8%
Sales Q2Q%-6.48%
Revenue Next Year-1.46%
Revenue Next 2Y0.74%
Revenue Next 3Y1.24%
Revenue Next 5Y2.24%
EBIT growth 1Y-3.51%
EBIT growth 3Y-3.37%
EBIT growth 5Y6.58%
EBIT Next Year26.2%
EBIT Next 3Y10.98%
EBIT Next 5Y7.5%
FCF growth 1Y-31.89%
FCF growth 3Y-8.96%
FCF growth 5Y0.29%
OCF growth 1Y-18.7%
OCF growth 3Y-6.4%
OCF growth 5Y1.05%