AZO vs LKQ: Which Is the Better Buy in 2026?
Last updated September 2026
Short answer
AZO and LKQ are similarly sized, but LKQ trades noticeably cheaper on forward earnings (7.99x vs 16.94x): the market is paying up for AZO's profile and pricing LKQ more conservatively, or for faster growth. Which you prefer comes down to the drivers you believe, and whether adding either over-concentrates what you already own.
AZO vs LKQ: the tie-breaker metrics
Same yardstick, side by side (as of September 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | AZO | LKQ | What it tells you |
|---|---|---|---|
| Forward P/E | 16.94 | 7.99 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 20.41 | 13.73 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 0.34 | 0.83 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 4% of range | 22% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
Reading it: LKQ is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.
Before you buy: how AZO and LKQ affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. AZO and LKQ share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined AZO and LKQ exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does AutoZone (AZO) do?
AutoZone is the largest retailer and distributor of automotive replacement parts and accessories in the United States, with more than 7,000 stores across the US, Mexico, and Brazil. It sells hard parts, maintenance items, tools, and accessories to both do-it-yourself (DIY) retail customers and, increasingly, to professional repair shops through its commercial (do-it-for-me, or DIFM) program. Demand is relatively defensive because people keep older cars on the road longer during uncertain economies, and parts eventually fail regardless of the cycle.
What does LKQ Corporation sources (LKQ) do?
LKQ Corporation sources, distributes and sells replacement parts, components and systems used to repair and maintain vehicles, spanning recycled and aftermarket collision parts, salvage vehicles, remanufactured engines and mechanical components, and specialty accessories for trucks, RVs and marine. It operates primarily through its Wholesale North America and Europe segments plus a Specialty segment, serving body shops, mechanical repair shops and retail customers, and its scale in salvage and aftermarket sourcing is its core competitive moat.
AZO vs LKQ: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- AZO drivers: Professional (DIFM) expansion; Aggressive share buybacks.
- LKQ drivers: Structural demand for alternative parts; Portfolio simplification and strategic review.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: AutoZone's DIY comparable sales grow only in the low single digits and DIY customer traffic has at times declined, so much of the per-share growth depends on buybacks rather than underlying volume. For LKQ, lKQ's revenue is tied to accident frequency, collision-claim volumes and miles driven, all of which have been soft, pressuring organic growth and margins.
AZO or LKQ: which should you pick?
AZO vs LKQ: the full fundamentals
AZO. As of July 2026, AutoZone traded around a mid-20s trailing price-to-earnings multiple with a market cap near $50 billion. Fiscal third-quarter 2026 net sales rose about 8.4% to roughly $4.8 billion with EPS near $38, though gross margin was dented by a non-cash LIFO charge. Growth was led by the commercial segment while DIY comps stayed in the low single digits.
LKQ. LKQ trades around a low-double-digit trailing earnings multiple, reflecting a mature distributor with soft organic growth and margin pressure rather than a premium grower. Enterprise value sits near $11 billion to $12 billion once roughly $5 billion of net debt is added, and the low multiple plus a sizable dividend are central to the value framing.
Headline figures (approximate, JULY 2026): AZO shows revenue (ttm) ~$19.6B, q3 fy2026 net sales ~$4.8B (up ~8.4% YoY), q3 fy2026 eps ~$38.07 (up ~7.7%), domestic same-store sales (q3) ~4.1%; LKQ shows revenue (ttm) ~$13.6B, market cap ~$6.7B, trailing p/e ~13x, q1 2026 revenue ~$3.47B (up ~4.3% YoY).
The bottom line: AZO vs LKQ
AZO and LKQ are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined AZO and LKQ exposure against your real portfolio. It is not an investment adviser.
Wondering how AZO or LKQ fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in AutoZone with AI
Connect the broker you already use and ask Walnut's AI how AZO fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between AZO and LKQ?
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AutoZone is the largest retailer and distributor of automotive replacement parts and accessories in the United States, with more than 7,000 stores across the US, Mexico, and Brazil. LKQ Corporation sources, distributes and sells replacement parts, components and systems used to repair and maintain vehicles, spanning recycled and aftermarket collision parts, salvage vehicles, remanufactured engines and mechanical components, and specialty accessories for trucks, RVs and marine. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is AZO or LKQ the better stock?
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Neither is universally better; they suit different views and risk levels. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, AZO or LKQ?
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On forward P/E (as of September 2026), AZO trades at 16.94x and LKQ at 7.99x, so LKQ is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both AZO and LKQ?
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Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of AZO vs LKQ?
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AZO: AutoZone's DIY comparable sales grow only in the low single digits and DIY customer traffic has at times declined, so much of the per-share growth depends on buybacks rather than underlying volume. Gross and operating margins have faced pressure from investment in the commercial build-out and from inflation-related accounting charges (such as a non-cash LIFO charge in Q3 2026). Competition from O'Reilly and Genuine Parts in the professional segment is intense. The company also carries significant debt used partly to fund buybacks, and a shift toward electric vehicles, which have fewer wear parts, is a long-term structural question for the aftermarket. LKQ: LKQ's revenue is tied to accident frequency, collision-claim volumes and miles driven, all of which have been soft, pressuring organic growth and margins. It carries meaningful debt (roughly $5 billion) against modest cash, so higher rates and weak cash generation raise leverage risk. Its closest comp, Genuine Parts, reported disappointing results that dragged LKQ shares, underlining shared industry headwinds. Foreign-exchange swings and European economic weakness affect a large slice of revenue, and the strategic review may not produce a sale or the value investors hope for. Longer term, changing vehicle technology, ADAS-driven fewer accidents and EV parts mix could reshape repair demand.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell AZO or LKQ; figures are approximate and dated (as of September 2026). Verify current data before investing.