TacticScaleWhat LKQ Does & How It Makes Money (LKQ)
Updated October 2026 · reflects LKQ's latest reported financials
Distributor of replacement and recycled auto parts and vehicle accessories. It earns money by distributing new aftermarket, recycled, and specialty parts to collision and mechanical repair shops, dealerships, and retail customers, and also sells scrap metal and precious metals such as catalytic converters to recyclers.
How LKQ makes money
It earns money by distributing new aftermarket, recycled, and specialty parts to collision and mechanical repair shops, dealerships, and retail customers, and also sells scrap metal and precious metals such as catalytic converters to recyclers.
What LKQ does
LKQ Corporation is a large distributor of vehicle replacement parts, serving collision and mechanical repair shops, new and used car dealerships, and retail customers. It operates through four segments: Wholesale-North America, Europe, Specialty, and Self Service. Its range covers aftermarket collision parts like bumper covers, body panels, and lights; paint and refinishing supplies; mechanical parts like brakes, clutches, steering, suspension, filters, fluids, spark plugs, and batteries; and recycled parts salvaged from vehicles, such as engines, transmissions, and sheet metal. Besides selling parts, LKQ sells scrap metal and precious metals from catalytic converters to recyclers. Its Specialty segment distributes RV appliances and air conditioners, towing hitches, truck bed covers, marine electronics, wheels, and tires. The company was incorporated in 1998 and is headquartered in Antioch, Tennessee. It operates in the United States, Canada, and many European countries, including Germany, the UK, the Benelux countries, Italy, France, and parts of Central Europe.
Products & services
- Collision parts (bumper covers, body panels, lights)
- Recycled/salvage OEM parts (engines, transmissions, door assemblies)
- Mechanical parts (brake pads, clutches, suspension, filters)
- Paint and refinishing consumables
- RV appliances, towing hitches and truck bed covers
- Self-service salvage yards and scrap metal recycling
What is LKQ worth?
On an owner-earnings DCF, LKQ's most-likely value is about $32 versus a recent price near $22 (47% below fair value). But TacticScale only calls a stock undervalued when the price sits below its conservative no-growth floor (~$23) with a margin of safety — so the honest verdict here is “Fairly priced — no edge.” Fair value earns its keep only at the extremes, not in the wide middle.
Price sits in the normal range — fair value isn't actionable here; it earns its keep only when price drops below the no-growth floor, or runs to roughly double the optimistic case.
⚠ High leverage — net debt is 7.0× annual cash flow. Net debt is subtracted from this fair value, but refinancing at higher rates, principal timing, and share dilution aren’t modeled — the equity can be worth far less if cash flow weakens.
Analysis, not advice. Fair value is a margin-of-safety estimate from a deterministic owner-earnings DCF, not a price target or recommendation. See the full breakdown →
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