How does LKQ Corporation (LKQ) change from a tortoise to a hare?

LKQ Corporation (NASDAQ: LKQ) stock fell -1.75% on Friday to $48.33 against a previous-day closing price of $49.19. With 1.68 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.44 million shares. During the session, the Auto Parts company that operates in wider Consumer Cyclical sector, reached to the highest price of $49.94 whereas the lowest price it dropped to was $48.32. The 52-week range on LKQ shows that it touched its highest point at $60.43 and its lowest point at $42.36 during that stretch. It currently has a 1-year price target of $64.44. With its current market cap of 13.30 billion, LKQ has annualized dividend of $1.00 while the current yield stands at 2.07%. Beta for the stock currently stands at 1.40.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of LKQ was down-trending over the past week, with a drop of -2.52%, but this was down by -11.17% over a month. Three-month performance surged to 0.29% while six-month performance rose 3.56%. The stock lost -2.44% in the past year, while it has lost -19.49% so far this year. A look at the trailing 12-month EPS for LKQ yields 4.20 with Next year EPS estimates of 4.27. For the next quarter, that number is 0.97. This implies an EPS growth rate of 74.90% for this year and 8.01% for next year. EPS is expected to grow by 33.50% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 20.00%.

Float and Shares Shorts:

At present, 281.40 million LKQ shares are outstanding with a float of 273.15 million shares on hand for trading. On Aug 30, 2022, short shares totaled 4.23 million, which was 1.54% higher than short shares on Jul 28, 2022. In addition to Mr. Dominick P. Zarcone as the firm’s Pres, CEO & Director, Mr. Varun Laroyia serves as its CEO & MD of LKQ Europe.

Institutional Ownership:

Through their ownership of 100.28% of LKQ’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 56.51% of LKQ, in contrast to 43.21% held by mutual funds. Shares owned by individuals account for 16.13%. As the largest shareholder in LKQ with 9.54% of the stake, The Vanguard Group, Inc. holds 26,188,099 shares worth 26,188,099. A second-largest stockholder of LKQ, Massachusetts Financial Services, holds 14,508,584 shares, controlling over 5.29% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in LKQ, holding 13,584,319 shares or 4.95% stake. With a 2.63% stake in LKQ, the Allspring Special Mid Cap Value F is the largest stakeholder. A total of 7,205,400 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.60% of LKQ stock, is the second-largest Mutual Fund holder. It holds 7,127,832 shares valued at 379.34 million. Vanguard 500 Index Fund holds 2.12% of the stake in LKQ, owning 5,807,552 shares worth 309.08 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, LKQ reported revenue of $3.34B and operating income of $408.00M. Over the past year, revenue came in at $13.17B while operating income stood at $1.59B. It generated $420.00M net income for the quarter, which came to $1.21B over the last twelve months. The EBITDA in the recently reported quarter was $474.00M and diluted EPS was $1.49. EBITDA for the full year was $1.73B.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for LKQ since 13 analysts follow the stock currently. There are 7 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With LKQ analysts setting a high price target of $70.00 and a low target of $52.00, the average target price over the next 12 months is $63.56. Based on these targets, LKQ could surge 44.84% to reach the target high and rise by 7.59% to reach the target low. Reaching the average price target will result in a growth of 31.51% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. LKQ will report FY 2022 earnings on 02/23/2023. Analysts have provided yearly estimates in a range of $4.01 being high and $3.84 being low. For LKQ, this leads to a yearly average estimate of $3.95. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. LKQ Corporation surprised analysts by $0.07 when it reported $1.09 EPS against a consensus estimate of $1.02. The surprise factor in the prior quarter was $0.09. Based on analyst estimates, the high estimate for the next quarter is $1.00 and the low estimate is $0.91. The average estimate for the next quarter is thus $0.97.

Dividends & Yield:

In terms of dividends, LKQ has a current ratio of $1.0, which is $1.0 over the trailing 12-months. Dividend yield is another indicator that appeals to many investors, and LKQ currently yields $2.07. In the past year, LKQ’s dividend yield has been $2.07. Accordingly, LKQ has a current buyback yield of $8.0. This was $8.0 for the TTM.

Summary of Insider Activity:

Insiders traded LKQ stock several times over the past three months with 0 Buys and 14 Sells. In these transactions, 0 shares were bought while 98,445 shares were sold. The number of buy transactions has increased to 26 while that of sell transactions has risen to 41 over the past year. The total number of shares bought during that period was 289,923 while 9,200,897 shares were sold.

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