What Happened?

Shares of automotive parts company LKQ (NASDAQ:LKQ) fell 11.9% in the afternoon session after the company reported disappointing first quarter 2025 results which included a significant miss on full-year EBITDA guidance and revenue that fell short of expectations. Total revenue declined 6.5% year on year, with each business segment posting declines between 5% and 7%, driven by softer demand and limited pricing power. Even self-service, typically more stable, contracted nearly 6%. Overall, this was a softer quarter.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy LKQ? Access our full analysis report here, it’s free.

What The Market Is Telling Us

LKQ’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. Moves this big are rare for LKQ and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 9 months ago when the stock dropped 15.2% on the news that the company reported weak second-quarter earnings results, with its revenue, organic revenue, and EPS falling short of Wall Street's estimates. On top of that, it significantly lowered its full-year organic revenue and EPS guidance. The company attributed the weakness to "lower repairable claims in North America and difficult macroeconomic conditions in Europe." While the headwinds were considered temporary, they were expected to persist till the end of the year, potentially dampening the market's optimism towards the stock, at least in the near term. Overall, this quarter could have been better.

LKQ is up 2.1% since the beginning of the year, but at $37.00 per share, it is still trading 19.6% below its 52-week high of $46.03 from July 2024. Investors who bought $1,000 worth of LKQ’s shares 5 years ago would now be looking at an investment worth $1,735.

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