Subject: Re: LKQ
Does anyone have any further thoughts?

I don't know anything about LKQ. I'm just checking the accounting to see what's going on.

Their revenue has been rising over the last quarters at their typically healthy rate, though cost of goods sold has also been rising so it is a wash.

Not bad, but for the last 4 quarters their EPS has been caving in, so I presume that is where the price action has come from. Investors like to treat the temporary as permanent (though sometimes, more rarely, it really is permanent).

The per-share earnings the last 4 quarters:
$1.05, $0.78, $0.65, $0.59

Where's the problem? Shares outstanding unchanged, gross profit unchanged.

The line that has been changing is their operating expenses - not by much, but it gas been creeping and and responsible for taking their earnings down. There is no single one-off quarter that is the culprit but a gradual creeping down (which is usually more ominous).

Anyway margins are around to where they were in 2015 - not bad. There were just temporarily really high in 2022, so again investors were probably assuming that is permanent when it wasn't. So much of the price fall could just be investors working that fact out. They have a ~75% total return over the last 5 years so it is not as the price has really underperformed their rising value. Sales per share grew only 40% over that period.

- Manlobbi