LKQ Corporation (LKQ)
NASDAQConsumer DiscretionaryAuto - PartsSnapshot 2026-09-09
$24.19-2.85%
Close 2026-09-09 · 1-day change
NASDAQConsumer DiscretionaryAuto - PartsSnapshot 2026-09-09
Broken: Primary pillar broken — Revenue growth at or above 2% annually: Q2 FY26 rev -3.0% vs 2% target.
LKQ grows revenue steadily, with $3.47B in Q1 2026. Gross profit rose $132M to $1.33B. The company raised 2026 EPS guidance to $2.21 per share. Its valuation is cheap with a PE of 8.8 versus peers at 17.3.
Operating income fell from $267M to $217M in Q1 2026. Guidance is soft amid sector headwinds. The stock is down 17% from highs and EPS estimates have recently been cut.
The price is about 37% below our fair value near $42. The market expects modest 2% revenue growth. Our view sees risk from margin pressure and execution challenges.
Breaks if: EPS guidance falls below $2.16 for FY26
Breaks if: Gross profit falls below $1.2B in any quarter of FY26
Breaks if: Operating income remains below $217M in FY26
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on operational improvements and shareholder returns. The current thesis state is intact, despite recent earnings misses and mixed management execution.
The market appears to price LKQ as cheap compared to its peers, with a slight expectations gap indicating that some caution is already reflected in the valuation. The fragility in earnings quality suggests that the market is aware of potential risks but does not fully price in severe negative outcomes.
Fundamentals may face headwinds due to recent earnings misses and declining operating income, reflecting ongoing market challenges. However, management's focus on returning capital to shareholders and improving operations could provide some stability in the multi-year view.
Key factors include management's ability to execute on their strategic review and potential sale of the Specialty segment, as well as external pressures like inflation and sector performance. Monitoring sector bellwethers for positive momentum will be crucial.
The most important moves since the prior daily snapshot.
Yes, our read has weakened. The company cut its 2026 outlook after a Q2 earnings miss. This indicates concerns about revenue growth.
as of 2026-09-09
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: YoY revenue growth falls below 2% in FY26
Focus on increasing revenue growth across the company.
Over the next 1 to 3 years, LKQ's performance will depend on management execution and external economic factors. Not investment advice.