MeritValue

LKQ CORP

LKQdata completeness 88%18 fiscal years on file
The thesis, from the filings

LKQ CORP earns about 15% on invested capital, comfortably above its ~9% cost of capital, and has bought back 13% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $37.7 and $48.18 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$13.1B1$12.8B2$13.3B3$13.8B3$13.7B3
Net income$1.09B4$1.15B5$938M6$693M6$608M6
Operating cash flow$1.37B7$1.25B8$1.36B9$1.12B9$1.06B9
Capital expenditure$293M10$222M11$358M12$311M12$216M12
Free cash flow (derived)$1.07B7$1.03B8$998M9$810M9$847M9
Total debt—————
Cash & equivalents$274M13$278M14$299M15$234M16$319M16
Diluted shares297.7M278.0M268.3M263.9M257.8M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$253.57
your share of equity
Profit it earned you last year
$23.58
Free cash flow it threw off
$32.85
Debt you’d be carrying
—

10 shares is a claim on $253.57 of net worth that earned you $23.58 and generated $32.85 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
15% avg · 5y
FY21 18%FY22 21%FY23 13%FY24 11%FY25 10%

It earned about 15% on invested capital against a ~9% cost of capital — comfortably above the cost of funding, a moderate advantage.

seeing a moat in the numbers →
Management signal · capital allocation
−13% shares · 5y

Share count is down 13% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $37.7 and $48.18 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$44.65
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$847M
DCF · Growth Exit 5Y
$48.18
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$847M
Earnings Power Value
$37.7
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$938M
  • growthAssumed0.0%
Graham Number
$36.62
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $48.18
The three cases
Bear0.0%$48.18
Base0.0%$48.18
Bull5.0%$59.54

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001065696-24-000009 (Revenues)
  2. 10-K · period ending 2022-12-31 · accession 0001065696-25-000015 (Revenues)
  3. 10-K · period ending 2023-12-31 · accession 0001065696-26-000012 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0001065696-24-000009 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001065696-25-000015 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001065696-26-000012 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001065696-24-000009 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001065696-25-000015 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001065696-26-000012 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001065696-24-000009 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-12-31 · accession 0001065696-25-000015 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-12-31 · accession 0001065696-26-000012 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-12-31 · accession 0001065696-23-000008 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001065696-24-000009 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001065696-25-000015 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001065696-26-000012 (CashAndCashEquivalentsAtCarryingValue)