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Why Is LKQ (LKQ) Up 12.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for LKQ (LKQ - Free Report) . Shares have added about 12.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is LKQ due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
LKQ's Q4 Earnings Up Y/Y, Sales Down Y/Y
LKQ reported adjusted earnings of 69 cents per share in fourth-quarter 2020, surpassing the Zacks Consensus Estimate of 59 cents. This outperformance was driven by the higher-than-anticipated EBITDA from the parts and services segment in North America. EBITDA from the North American market came in at $212.6 million, beating the Zacks Consensus Estimate of $167 million.
Moreover, the bottom line comes in higher than the year-ago quarter’s profit of 54 cents per share, up 27.8% year on year.
This aftermarket auto parts distributor registered quarterly revenues of $2,953.9 million, topping the Zacks Consensus Estimate of $2,880 million. However, the top-line figure edged down 1.9% from the year-ago level of $3,009.9 million. Parts and services organic growth also declined 5.2% year over year.
Segment Highlights
For the December-end quarter, revenues from the North American segment totaled $1,166.5 million, down from the $1,283.1 million reported in the prior-year period. The reported figure, however, exceeded the consensus mark of $1,014 million. Moreover, EBITDA from the segment came in at $212.6 million, increasing 18.1% year over year.
Revenues from the European segment summed $1,433.3 million for the reported quarter, up from the $1,424.9 million recorded in the year-earlier quarter. The reported figure also beat the consensus mark of $1,421 million. The segment’s EBITDA came in at $123.8 million, climbing 14.7% year over year. The reported EBITDA figure is at par with the consensus mark.
For the October-December period, revenues and EBITDA from the Specialty segment came in at $355.1 million and $29.9 million, higher than the year-ago respective figure of $303.4 million and $25.4 million. While the revenue figure topped the consensus mark of $32 million, the EBITDA marginally missed the consensus mark of $30.3 million.
Financial Position
LKQ Corp had cash and cash equivalents of $312.2 million as of Dec 31, 2020, down from the $523 million recorded as of Dec 31, 2019. Long-term debt (excluding current portion) amounted to $2,812.6 million as on Dec 31, 2020, down from the $3,715.4 million recorded as of Dec 31, 2019.
During the fourth quarter, the company generated net cash of $309.2 million from operations, skyrocketing 212.8% from the year-ago period. It generated free cash flow of $246.5 million in the quarter compared with the negative free cash flow of $1.3 million witnessed in the prior-year quarter.
During the reported quarter, the company repurchased roughly $29 million of its common stock. Since the inception of its repurchase program, the company has repurchased 17.3 million shares for a total of $469 million.
2021 Outlook
For 2021, the company projects EPS in the range of $2.40-$2.60 per share and adjusted EPS of $2.65-$2.85 per share. The company envisions generating free cash flow of minimum $800 million. The company is targeting free cash flow conversion of EBITDA at 55-60%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, LKQ has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, LKQ has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is LKQ (LKQ) Up 12.4% Since Last Earnings Report?
A month has gone by since the last earnings report for LKQ (LKQ - Free Report) . Shares have added about 12.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is LKQ due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
LKQ's Q4 Earnings Up Y/Y, Sales Down Y/Y
LKQ reported adjusted earnings of 69 cents per share in fourth-quarter 2020, surpassing the Zacks Consensus Estimate of 59 cents. This outperformance was driven by the higher-than-anticipated EBITDA from the parts and services segment in North America. EBITDA from the North American market came in at $212.6 million, beating the Zacks Consensus Estimate of $167 million.
Moreover, the bottom line comes in higher than the year-ago quarter’s profit of 54 cents per share, up 27.8% year on year.
This aftermarket auto parts distributor registered quarterly revenues of $2,953.9 million, topping the Zacks Consensus Estimate of $2,880 million. However, the top-line figure edged down 1.9% from the year-ago level of $3,009.9 million. Parts and services organic growth also declined 5.2% year over year.
Segment Highlights
For the December-end quarter, revenues from the North American segment totaled $1,166.5 million, down from the $1,283.1 million reported in the prior-year period. The reported figure, however, exceeded the consensus mark of $1,014 million. Moreover, EBITDA from the segment came in at $212.6 million, increasing 18.1% year over year.
Revenues from the European segment summed $1,433.3 million for the reported quarter, up from the $1,424.9 million recorded in the year-earlier quarter. The reported figure also beat the consensus mark of $1,421 million. The segment’s EBITDA came in at $123.8 million, climbing 14.7% year over year. The reported EBITDA figure is at par with the consensus mark.
For the October-December period, revenues and EBITDA from the Specialty segment came in at $355.1 million and $29.9 million, higher than the year-ago respective figure of $303.4 million and $25.4 million. While the revenue figure topped the consensus mark of $32 million, the EBITDA marginally missed the consensus mark of $30.3 million.
Financial Position
LKQ Corp had cash and cash equivalents of $312.2 million as of Dec 31, 2020, down from the $523 million recorded as of Dec 31, 2019. Long-term debt (excluding current portion) amounted to $2,812.6 million as on Dec 31, 2020, down from the $3,715.4 million recorded as of Dec 31, 2019.
During the fourth quarter, the company generated net cash of $309.2 million from operations, skyrocketing 212.8% from the year-ago period. It generated free cash flow of $246.5 million in the quarter compared with the negative free cash flow of $1.3 million witnessed in the prior-year quarter.
During the reported quarter, the company repurchased roughly $29 million of its common stock. Since the inception of its repurchase program, the company has repurchased 17.3 million shares for a total of $469 million.
2021 Outlook
For 2021, the company projects EPS in the range of $2.40-$2.60 per share and adjusted EPS of $2.65-$2.85 per share. The company envisions generating free cash flow of minimum $800 million. The company is targeting free cash flow conversion of EBITDA at 55-60%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, LKQ has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, LKQ has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.