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LKQ (LKQ) Could Be 40% Undervalued On Its Recent Share Price Slide

Simply Wall St · 2d ago

LKQ (LKQ) has drawn fresh attention after a stretch of weaker share performance, with the stock down over the past month and past 3 months, even as annual revenue and net income figures remain in positive territory.

With LKQ now trading at US$22.03, the recent stretch of weakness is clear: the share price has fallen 13.7% over the past month and is down 26.6% year to date, while the 1 year total shareholder return has declined 22.6% and the 5 year total shareholder return is lower by 52.7%. This points to fading momentum as investors reassess both growth prospects and risk.

Compare how LKQ stacks up against other lagging shares that still report positive revenue and net income figures by reviewing the curated 29 high quality undervalued stocks list.

LKQ has slumped while still reporting positive revenue and net income, which raises a blunt question: Does the current price compensate you enough for the recent drawdown, or is the risk side of the ledger doing more of the talking?

Most Popular Narrative: 40% Undervalued

The prevailing LKQ narrative pegs fair value at $36.42, which sits well above the last close at $22.03. This frames the recent drawdown as a valuation gap rather than just sentiment damage.

Growth in miles driven increases the wear and tear on vehicles, requiring more maintenance and repair work to keep them on the road, benefiting LKQ.

LKQ’s collision business could see rising demand from increasing auto claims as more drivers return to the road following the COVID-19 pandemic.

See why 30 investors see LKQ as 40% undervalued.

Result: Fair Value of $36.42 (UNDERVALUED)

Still, the LKQ story can change quickly if ADAS reduces accident volumes, or if European integration and freight bottlenecks weigh on parts availability and repair demand.

Find out about the key risks to this LKQ narrative.

Next Steps

Sentiment on LKQ is split, with fresh price weakness on one side and a fair value gap on the other. Move quickly to review the underlying data and weigh both the potential upside and the pressure points outlined in the 4 key rewards and 2 important warning signs.

Looking for more LKQ sized investment ideas?

LKQ might be front of mind today, but your next strong idea could come from broad, data driven stock lists that highlight very different strengths and trade offs.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.