LKQ (NASDAQ:LKQ – Get Free Report) and Alliance Entertainment (NASDAQ:AENT – Get Free Report) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, dividends, valuation and risk.
Profitability
This table compares LKQ and Alliance Entertainment’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LKQ | 1.89% | 9.57% | 4.11% |
| Alliance Entertainment | 1.14% | 20.29% | 5.86% |
Risk and Volatility
LKQ has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, Alliance Entertainment has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500.
Earnings and Valuation
This table compares LKQ and Alliance Entertainment”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| LKQ | $13.65 billion | 0.36 | $607.00 million | $1.00 | 19.71 |
| Alliance Entertainment | $1.15 billion | 0.23 | $13.06 million | $0.26 | 20.00 |
LKQ has higher revenue and earnings than Alliance Entertainment. LKQ is trading at a lower price-to-earnings ratio than Alliance Entertainment, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
95.6% of LKQ shares are owned by institutional investors. Comparatively, 0.3% of Alliance Entertainment shares are owned by institutional investors. 0.4% of LKQ shares are owned by company insiders. Comparatively, 77.5% of Alliance Entertainment shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for LKQ and Alliance Entertainment, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LKQ | 2 | 2 | 5 | 0 | 2.33 |
| Alliance Entertainment | 0 | 2 | 0 | 0 | 2.00 |
LKQ currently has a consensus target price of $26.07, suggesting a potential upside of 32.28%. Alliance Entertainment has a consensus target price of $8.00, suggesting a potential upside of 53.85%. Given Alliance Entertainment’s higher possible upside, analysts clearly believe Alliance Entertainment is more favorable than LKQ.
Summary
LKQ beats Alliance Entertainment on 9 of the 14 factors compared between the two stocks.
About LKQ
LKQ Corporation (NASDAQ: LKQ) distributes replacement parts, components and related products for vehicle repair and maintenance. Its offerings include recycled and refurbished parts, aftermarket products and original equipment manufacturer (OEM) parts, serving collision repair shops, mechanical repair businesses and other customers. The company also supplies specialty automotive parts and accessories, including products for vehicle customization and performance. LKQ operates across North America and Europe, as well as in Taiwan.
About Alliance Entertainment
Alliance Entertainment is a distributor and wholesaler of physical entertainment products, including vinyl records, CDs, DVDs, Blu-ray discs, video games, toys, collectibles, books and consumer electronics. The company supplies products from a broad range of studios, record labels, publishers and manufacturers. Its customers include retailers, e-commerce businesses and specialty stores. Alliance Entertainment also provides distribution and fulfillment services, helping businesses source and deliver entertainment products to consumers.
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