What Happened:
Shares of automotive parts company LKQ (NASDAQ:LKQ) fell 14.8% in the morning session after the company reported first-quarter results with organic revenue, reported revenue, and EPS all falling below Wall Street's estimates. However, full-year guidance was maintained for adjusted EPS and free cash flow.
The company stated that "despite the revenue headwinds we encountered in the first quarter, we are maintaining our adjusted earnings per share and free cash flow guidance. We have confidence in our team's abilities and their track record of swiftly and effectively implementing action plans to address our cost structure, and have already made meaningful changes to reflect current levels of demand." Overall, the results could have been better.
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What is the market telling us:
LKQ's shares are not very volatile than the market average and over the last year have had only 1 moves greater than 5%. Moves this big are very rare for LKQ and that is indicating to us that this news had a significant impact on the market's perception of the business.
LKQ is down 11.5% since the beginning of the year, and at $41.78 per share it is trading 29.2% below its 52-week high of $59.01 from July 2023. Investors who bought $1,000 worth of LKQ's shares 5 years ago would now be looking at an investment worth $1,334.
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