Why the shares fell
LKQ Corp shares fell 22.5% on 23 October, closing at $17.42 from a previous close of $22.47. According to a news report, the drop followed preliminary third-quarter results the report described as weak, alongside news of a change at the top of the company. A separate report said LKQ had named Salvatore A. Abbate as its new President and Chief Executive Officer, and a third report covered the company’s own preliminary-results announcement, which referred to accompanying leadership and operational actions. LKQ has not issued a statement to Fundamentalytics confirming which of these items, or what combination of them, explains the scale of the reaction; the figures behind the preliminary results themselves sit outside the data checked for this article.
How large the move was
A 22.5% single-day fall is well outside LKQ’s normal range. Over the past year the stock’s typical daily move has been 2.2%, so the decline was 10.0 times that typical swing. It was the biggest move in this direction since 24 October 2019. Trading volume was 6.8 times the stock’s 30-day average, consistent with a reaction to new information rather than routine trading.
Market-wide or specific to LKQ
The decline was not part of a broader sell-off. The S&P 500 fell 0.5% in the same session, and the median move among other covered wholesale motor-vehicle-parts and supplies companies was 0%. The size and direction of LKQ’s move, against a flat peer group and a broadly steady index, points to news specific to the company rather than sector or market conditions.
What the fundamentals show
| Metric (TTM) | Value | Change YoY |
|---|---|---|
| Revenue | $13.7 billion | rose 1.3% |
| Operating margin | 6.3% | down 2.0 percentage points |
| Net margin | 3.4% | n/a |
| Free cash flow | $625 million | fell 7.5% |
| Net income | $461 million | fell 35.2% |
LKQ’s trailing twelve-month revenue rose 1.3% to $13.7 billion, but profitability has narrowed. Operating margin stands at 6.3%, down 2.0 percentage points year over year, and net margin is 3.4%. Free cash flow fell 7.5% to $625 million over the period, a smaller decline than the 35.2% drop in net income to $461 million.
What it means for value
Fundamentalytics’ two-stage discounted cash flow model, built on a 2.00% stage-one growth assumption, puts base-case value per share at $27.00. These are model values under stated assumptions, not a comparison with the share price.
Until then, the only account of what drove the reported preliminary third-quarter numbers and the leadership change comes from the reports cited above; none of them is a statement from LKQ itself as checked against this article.