LKQ Corporation is a leading provider of alternative and specialty parts to repair and accessorize automobiles and other vehicles. The company was founded in 1998 and is based in Chicago, Illinois.
LKQ Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Lkq Corp. To summarize, we found that Lkq Corp ranked in the 76th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 393.67%. The most interesting components of our discounted cash flow analysis for Lkq Corp ended up being:
The company has produced more trailing twelve month cash flow than 89.44% of its sector Consumer Cyclical.
Lkq Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 7.64% of tickers in our DCF set.
LKQ's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 7.64% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Lkq Corp? See MLR, MPAA, HOFT, SALM, and PRTY.
LKQ Corporation (LKQ) second-quarter results came in better than expected. The company’s cost alignment strategy, which began even before COVID-19, is paying dividends, as profit margins remain strong even in light of a 19% decline in sales for the quarter. The company also generated an impressive amount of FCF during...
At this time, I would like to welcome everyone to the LKQ Corporation's Second Quarter 2020 Earnings Conference Call. With us today are Nick Zarcone, LKQ's President and Chief Executive Officer; and Varun Laroyia, Executive Vice President and Chief Financial Officer.