"Private equity firms are sitting on a record amount of dry powder, and leveraged buyout financing has improved as interest rates stabilize. Mid-cap public companies with strong brands and cash flows are trading at multi-year lows, creating conditions that analysts associate with increased take-private activity. These five stocks, four of which just reported Q4 results, combine depressed valuations, manageable market caps, and characteristics that make them attractive LBO candidates in 2026."
"After its Q4 report, the online home goods retailer traded at $81.35, down 72% from its five-year high of $292.73. The $11.9 billion market cap pushes the upper limits of typical PE deals, but the operational turnaround is compelling. In Q3 2025, Wayfair delivered $3.3 billion in revenue, as well as adjusted EBITDA of $224 million, a 133% year-over-year increase. The 6.8% EBITDA margin was the highest outside the pandemic period."
"LKQ ( NASDAQ: LKQ) operates in the unglamorous but essential alternative auto parts business. Trading at $33.22, down 13% over the past year, the company's $8.5 billion market cap and EV/EBITDA of 9x offer classic LBO economics. LKQ generated $387 million in free cash flow in Q3 2025, providing ample debt servicing capacity, and holds $15.6 billion in total assets against $6.5 billion in shareholders' equity."
Record private equity dry powder and improved leveraged buyout financing amid stabilizing interest rates increase take-private opportunities. Mid-cap public companies with strong brands and reliable cash flows are trading at multi-year lows, creating favorable conditions for buyouts. Five stocks combine depressed valuations, manageable market caps, and attributes attractive to private equity sponsors in 2026. Wayfair represents a high-risk, high-reward target with $11.9 billion market cap, sizable revenue and adjusted EBITDA growth, but lingering GAAP losses and insider share sales. LKQ shows classic LBO metrics with an $8.5 billion market cap, 9x EV/EBITDA, and robust free cash flow.
Read at 24/7 Wall St.
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