Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0801
    +0.0008 (+0.08%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2634
    +0.0011 (+0.09%)
     
  • USD/JPY

    151.2040
    -0.1680 (-0.11%)
     
  • Bitcoin USD

    70,096.55
    -622.99 (-0.88%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,369.44
    +201.37 (+0.50%)
     

What Does LKQ Corporation’s (LKQ) Share Price Indicate?

LKQ Corporation (NASDAQ:LKQ) received a lot of attention from a substantial price movement on the NasdaqGS in the over the last few months, increasing to $37.74 at one point, and dropping to the lows of $33.92. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether LKQ’s current trading price of $37.15 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at LKQ’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for LKQ

What’s the opportunity in LKQ?

LKQ appears to be overvalued by 58% at the moment, based on my discounted cash flow valuation. The stock is currently priced at $37.15 on the market compared to my intrinsic value of $23.56. Not the best news for investors looking to buy! Furthermore, LKQ’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of LKQ look like?

NasdaqGS:LKQ Future Profit Nov 17th 17
NasdaqGS:LKQ Future Profit Nov 17th 17

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. LKQ’s earnings over the next few years are expected to increase by 37.47%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? LKQ’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe LKQ should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on LKQ for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for LKQ, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on LKQ. You can find everything you need to know about LKQ in the latest infographic research report. If you are no longer interested in LKQ, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

Advertisement