Start here if you're new
what it is
LKQ sells replacement car parts, including recycled parts from wrecked vehicles, to repair shops, insurers, and drivers.
how it gets paid
FY2025 revenue was ~$13.7B (down ~1.3% vs. prior year). Europe was the largest line at ~$5.6B, or ~41% of sales.
why growth slowed
FY2025 revenue fell ~1.3% as reported; parts & services organic revenue fell ~2.7% (FX and M&A/divestitures moved the headline). Q4 2025 revenue was up ~2.7% vs. prior year even though organic parts & services slipped ~1.7%.
what just happened
Q4 2025 adjusted EPS was ~$0.59 vs ~$0.65 consensus (miss); GAAP diluted EPS was ~$0.29 vs ~$0.58 prior-year Q4 — always separate GAAP vs adjusted.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
80/100 earnings predictability — models usually land near guidance
10.8x trailing p/e — the market's not buying it — or you found a deal
3.8% dividend yield — cash in your pocket every quarter
9.0% return on capital — modest, not elite
xvary composite: 61/100 — average
What they do
LKQ sells replacement car parts, including recycled parts from wrecked vehicles, to repair shops, insurers, and drivers.
When your car is wrecked, you do not want a philosophy seminar. You want the right part fast. LKQ runs roughly 1,650 facilities and serves repair shops, which gives it local inventory and distribution density that is hard to copy. Scale → more parts nearby → faster repairs, so what: your insurer and body shop have a reason to keep using LKQ.
How they make money
$13.7B
annual revenue (FY2025) · down ~1.3% vs. prior year as reported
Wholesale North America
$5.2B
3.0%
Europe
$5.6B
2.0%
Specialty
$2.0B
+4.0%
Self Service
$0.9B
0.0%
The products that matter
replacement parts distribution
aftermarket and recycled auto parts
$13.7B revenue
it's the engine of the whole business. FY2025 GAAP net margin was ~4.4% ($596M net on ~$13.7B revenue) — adjusted earnings are higher — so volume and mix/tariffs move the P&L fast.
core business
Key numbers
10.8x
trailing p/e
You are paying ~11× trailing earnings for a distributor with ~7.3% FY2025 operating margin — cheap only if margins and organic sales stabilize.
3.8%
dividend yield
That yield pays you while you wait, which matters more when projected earnings growth is only 4.5%.
7.3%
operating margin
FY2025 operating margin → profit after COGS and opex → so what: mid-single-digit operating margin is normal here; Q4 was weaker (~4.6% of revenue) on mix, tariffs, and one-offs.
~$3.7B
total debt
Year-end 2025 total debt ~$3.7B (~2.4× EBITDA per company leverage definition) — manageable but real against an ~$8B market cap.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 80 / 100
- long-term debt ~$3.7B total debt (YE 2025)
- net profit margin ~4.4% GAAP net margin FY2025 — adjusted net margin higher
- return on equity 12% — $0.12 profit for every $1 investors have put in
B++ — balance sheet is a strength; debt is sized for a distributor at this scale.
Total return vs. market
You invested $10,000 in LKQ 3 years ago → it's now worth $6,430.
The index would have given you $13,880.
source: institutional data · total return
What just happened
missed estimates
Q4 2025 adjusted EPS $0.59 vs ~$0.65 est (miss); GAAP EPS $0.29 vs $0.58 prior-year Q4.
Q4 revenue ~$3.3B, up ~2.7% vs. prior year; parts & services organic revenue down ~1.7% with ~+3.7% FX tailwind. FY2025 revenue ~$13.7B (down ~1.3%); FY organic parts & services down ~2.7%. Board launched a strategic-alternatives review (Jan 2026).
~$3.3B
Q4 revenue
$0.59
Q4 adj. EPS
37.9%
Q4 gross margin
the number that mattered
The adjusted EPS miss (~9% vs consensus) mattered, but so did the organic trend: FY organic parts & services down ~2.7% — the multiple is not “cheap” if organic growth stays negative.
-
lkq reported Q4 2025 revenue ~$3.3B, up ~2.7% vs. prior year, with parts & services organic revenue down ~1.7% (FX added ~3.7%).
-
FY2025 revenue ~$13.7B, down ~1.3%; parts & services organic revenue down ~2.7% (FX +1.7%; net M&A/divestitures −0.5%).
-
Self Service divestiture closed Oct 2025; company announced exploration of a potential Specialty sale in Dec 2025.
-
Adjusted Q4 EPS ~$0.59 vs ~$0.78 prior-year Q4; GAAP Q4 EPS ~$0.29 vs ~$0.58 prior-year Q4.management cited tariffs, mix, and sector softness; specialty posted ~7.8% organic revenue growth in the quarter.
-
2026 outlook: organic parts & services −0.5% to +1.5%; adjusted diluted EPS ~$2.90–$3.20; operating cash flow ~$900M–$1.1B.board initiated a comprehensive strategic-alternatives review (Jan 2026) with no fixed deadline.
source: LKQ Q4 / FY2025 release (Feb 19, 2026)
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What could go wrong
the #1 risk is price transparency in aftermarket auto parts. if you own lkq, the danger is not mystery — it is a low GAAP net margin (~4.4% FY2025) distributor getting even more price-shopped.
med
online price competition
large online marketplaces make it easier for shops and buyers to compare prices fast. that matters when lkq's edge is distribution reach rather than luxury-level pricing power.
a little price pressure goes a long way when GAAP net margin is ~4–5% on ~$13.7B of revenue.
med
cost inflation and bad mix
management already cited tariff costs and unfavorable product mix as profit drags. that is the kind of sentence you can ignore in a 25% margin business. lkq is not that business.
if costs rise faster than pricing, the latest ~$0.59 adjusted Q4 EPS and 2026 guidance band get harder to defend.
med
repair demand stays soft
FY2025 organic parts & services fell ~2.7%; 2026 guide assumes modest organic improvement. the market is asking whether demand is stabilizing or still eroding.
if softer volumes persist, a 10.8x multiple stops looking cheap and starts looking accurate.
med
balance sheet flexibility is good, not endless
~$3.7B total debt is manageable with a B++ balance sheet — it is still real debt in a business with ~4.4% GAAP net margin FY2025.
if growth stays muted, capital returns compete with debt service and operating needs.
combined, these risks hit the same weak point: ~$13.7B revenue with ~4.4% GAAP net margin FY2025 — thin cushion if organic growth and tariffs stay hostile.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
organic sales growth
FY2025 organic parts & services was ~−2.7%; Q4 organic was ~−1.7%. 2026 guide is roughly flat to slightly up — execution vs that band is the tell.
risk
net margin pressure
~4.4% GAAP net margin FY2025 is workable, not forgiving. watch tariffs, mix, and whether adjusted earnings hold inside the 2026 guide.
calendar
next earnings report
you want adjusted EPS to track the 2026 outlook (~$2.90–$3.20) and organic trends to improve — not just a strategic-review headline.
trend
institutional flow
lkq has seen net institutional selling for 3 straight quarters. 202 buyers versus 260 sellers in 4q2025 is not a vote of confidence.
Analyst rankings
short-term outlook
average
timeliness score 3. in human-speak, analysts do not see a strong short-term edge here.
risk profile
average
stability score 3 means typical stock risk, not a bunker and not a rollercoaster.
chart momentum
average
technical score 3 says the chart is not leading the story. fundamentals still have to do the heavy lifting.
earnings predictability
80 / 100
management's numbers tend to land close to expectations. that makes estimate cuts more meaningful when they show up.
source: institutional data
Institutional activity
institutions have been net selling for 3 consecutive quarters — 202 buyers vs. 260 sellers in 4q2025. total institutional holdings: 0.3B shares.
source: institutional data
Price targets
3-5 year target range
$27
$50
$33.29
current price
$39
target midpoint · +17% from current · range high: $50 (~+50% from current)
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