AI Models Rate LKQ “Attractive” Prior To Earnings Announcement
LKQ Corp LKQ is the largest aftermarket, specialty, and used auto parts distributor in both the United States and Europe. The company boasts an impressive market capitalization over $9 billion and has seen continual growth several years running.
However, unless you’re in the auto industry, you’ve likely never heard of LKQ.
This under-the-radar stock tends to fly low while boosting profits, making it an excellent stock for long-term investors interested in diversifying their portfolio into the auto market.
But is it worth the price?
LKQ and the Pandemic
LKQ Corp has experienced a choppy last six months.
The company was already on a slight downtrend when the pandemic market bottomed out in March. Since then, the stock has crawled back up the charts, although it has some distance to cover yet before it catches up with pre-pandemic highs.
However, the company’s prospects may change this week, as LKQ Corp is set to release their Q3 results on Thursday before market open.
And its investors are waiting with bated breath to see how the company has held up.
A Quarter Full of Surprises
It’s no secret that the automotive industry has suffered throughout the pandemic. The fact is that most families can’t afford to purchase brand new cars – or parts – in the current economy. Overall, both vehicle and component demand (and resultantly, their prices) have tanked since the onset of coronavirus.
This bodes poorly for LKQ – maybe.
But the auto parts distributor still has a chance to surprise investors. As a primary supplier of aftermarket and used parts for mechanical repairs, the company has a leg up in the automotive industry, as their parts and prices are more affordable for individuals who have been negatively impacted by the virus.
Not to mention, the company’s prospects are bolstered by their history of solid performance in turbulent markets.
For instance, although their revenue took a $2 billion hit in the last quarter, overall the company saw increased growth of 21% over the last three fiscal years from $9.74 billion to over $12.5 billion.
Their operating income has increased more gradually, up to $984 million in the last fiscal year for a three-year increase of 6.7%.
LKQ has also seen solid EPS growth of 4.5% in the last year, bringing their per-share earnings to $1.74.
But, Once Again: Is it Worth the Price?
That’s why Q.ai’s deep learning AI (artificial intelligence) is here. We provide an in-depth look at a company’s fundamentals and financials to give you an accurate portrayal of their investment-worthiness.
Without further ado, let’s take another look at LKQ’s performance.
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LKQ Corp (LKQ) By the Numbers
LKQ Corp closed down 5.5% on Tuesday, ending the day at $31.72 on the back of 1.85 million shares. Although the company has seen a choppy quarter, their prices have teetered around the $31 for the bulk of October, as evidenced in their 10- and 22-day price averages ($31.81 and $30.30, respectively).
Overall, LKQ’s stock is down 11.4% for the year. The company is currently trading with a forward 12-month P/E of 12.86, and their revenue is expected to grow by about 4% over the next year.
So, What’s the Verdict?
LKQ Corp is in a unique position in the pandemic because of their product and market base. We won’t know how their last quarter went until October 29 – but our AI believes that their prospects are good regardless of their performance.
For every stock on our roster, our artificial intelligence grades it according to Q.ai’s in-house metrics. LKQ has rated above-average overall in this process, coming out with an A in Technicals, a B in Quality Value, and C in both Growth and Low Volatility Momentum.
Between a bright future ahead and solid past performance, as well as an excellent Technicals rating, our AI has rated LKQ Corp Attractive for the month of October.
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