ADVANCE AUTO PARTS INC (AAP) Stock Fundamental Analysis
NYSE:AAP - New York Stock Exchange, Inc. - US00751Y1064 - Common Stock - Currency: USD
Overall AAP gets a fundamental rating of 4 out of 10. We evaluated AAP against 120 industry peers in the Specialty Retail industry. There are concerns on the financial health of AAP while its profitability can be described as average. AAP has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year AAP was profitable.
AAP had a positive operating cash flow in the past year.
AAP had positive earnings in each of the past 5 years.
In the past 5 years AAP always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.67%, AAP is in line with its industry, outperforming 50.43% of the companies in the same industry.
AAP has a Return On Equity (3.23%) which is in line with its industry peers.
AAP has a Return On Invested Capital of 1.79%. This is comparable to the rest of the industry: AAP outperforms 43.59% of its industry peers.
AAP had an Average Return On Invested Capital over the past 3 years of 7.36%. This is below the industry average of 12.30%.
The 3 year average ROIC (7.36%) for AAP is well above the current ROIC(1.79%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.67% | ||
| ROE | 3.23% | ||
| ROIC | 1.79% |
ROA(3y)3.16%
ROA(5y)3.59%
ROE(3y)13.26%
ROE(5y)13.47%
ROIC(3y)7.36%
ROIC(5y)8.24%
1.3 Margins
AAP's Profit Margin of 0.65% is in line compared to the rest of the industry. AAP outperforms 50.43% of its industry peers.
In the last couple of years the Profit Margin of AAP has declined.
Looking at the Operating Margin, with a value of 1.11%, AAP is in line with its industry, outperforming 41.88% of the companies in the same industry.
In the last couple of years the Operating Margin of AAP has declined.
AAP's Gross Margin of 41.95% is fine compared to the rest of the industry. AAP outperforms 64.10% of its industry peers.
AAP's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.11% | ||
| PM (TTM) | 0.65% | ||
| GM | 41.96% |
OM growth 3Y-49.6%
OM growth 5Y-31.76%
PM growth 3Y-62.2%
PM growth 5Y-43.12%
GM growth 3Y-3.34%
GM growth 5Y-1.9%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AAP is destroying value.
The number of shares outstanding for AAP has been increased compared to 1 year ago.
The number of shares outstanding for AAP has been reduced compared to 5 years ago.
Compared to 1 year ago, AAP has a worse debt to assets ratio.
2.2 Solvency
AAP has an Altman-Z score of 1.94. This is not the best score and indicates that AAP is in the grey zone with still only limited risk for bankruptcy at the moment.
AAP's Altman-Z score of 1.94 is in line compared to the rest of the industry. AAP outperforms 43.59% of its industry peers.
The Debt to FCF ratio of AAP is 7.78, which is on the high side as it means it would take AAP, 7.78 years of fcf income to pay off all of its debts.
AAP has a Debt to FCF ratio of 7.78. This is comparable to the rest of the industry: AAP outperforms 54.70% of its industry peers.
A Debt/Equity ratio of 0.69 indicates that AAP is somewhat dependend on debt financing.
AAP has a Debt to Equity ratio (0.69) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 7.78 | ||
| Altman-Z | 1.94 |
ROIC/WACC0.18
WACC9.78%
2.3 Liquidity
AAP has a Current Ratio of 1.34. This is a normal value and indicates that AAP is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.34, AAP perfoms like the industry average, outperforming 45.30% of the companies in the same industry.
AAP has a Quick Ratio of 1.34. This is a bad value and indicates that AAP is not financially healthy enough and could expect problems in meeting its short term obligations.
AAP has a better Quick ratio (0.62) than 62.39% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
The earnings per share for AAP have decreased strongly by -81.28% in the last year.
The earnings per share for AAP have been decreasing by -36.26% on average. This is quite bad
AAP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.81%.
Measured over the past years, AAP shows a small growth in Revenue. The Revenue has been growing by 3.33% on average per year.
EPS 1Y (TTM)-81.28%
EPS 3Y-55.5%
EPS 5Y-36.26%
EPS Q2Q%95.12%
Revenue 1Y (TTM)14.81%
Revenue growth 3Y3.75%
Revenue growth 5Y3.33%
Sales Q2Q%-21%
3.2 Future
Based on estimates for the next years, AAP will show a very strong growth in Earnings Per Share. The EPS will grow by 50.35% on average per year.
Based on estimates for the next years, AAP will show a decrease in Revenue. The Revenue will decrease by -4.46% on average per year.
EPS Next Y-141.1%
EPS Next 2Y44.73%
EPS Next 3Y59.31%
EPS Next 5Y50.35%
Revenue Next Year-19.55%
Revenue Next 2Y-13.14%
Revenue Next 3Y-8.26%
Revenue Next 5Y-4.46%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 54.99 indicates a quite expensive valuation of AAP.
AAP's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.63, AAP is valued quite expensively.
A Price/Forward Earnings ratio of 27.65 indicates a quite expensive valuation of AAP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AAP is on the same level as its industry peers.
AAP's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.99 | ||
| Fwd PE | 27.65 |
4.2 Price Multiples
64.10% of the companies in the same industry are more expensive than AAP, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, AAP is valued cheaply inside the industry as 82.05% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.28 | ||
| EV/EBITDA | 9.18 |
4.3 Compensation for Growth
A more expensive valuation may be justified as AAP's earnings are expected to grow with 59.31% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y44.73%
EPS Next 3Y59.31%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.26%, AAP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.01, AAP pays a better dividend. On top of this AAP pays more dividend than 80.34% of the companies listed in the same industry.
AAP's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
5.2 History
The dividend of AAP is nicely growing with an annual growth rate of 71.07%!
AAP has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)71.07%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
71.39% of the earnings are spent on dividend by AAP. This is not a sustainable payout ratio.
The dividend of AAP is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP71.39%
EPS Next 2Y44.73%
EPS Next 3Y59.31%
43.44
-0.9 (-2.03%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners123.16%
Inst Owner Change10.98%
Ins Owners0.66%
Ins Owner Change0.04%
Market Cap2.59B
Analysts56.67
Price Target44.73 (2.97%)
Short Float %16.96%
Short Ratio5.68
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
Yearly Dividend3.53
Dividend Growth(5Y)71.07%
DP71.39%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-64.41%
Min EPS beat(2)-108.05%
Max EPS beat(2)-20.77%
EPS beat(4)0
Avg EPS beat(4)-122.72%
Min EPS beat(4)-359.69%
Max EPS beat(4)-2.39%
EPS beat(8)1
Avg EPS beat(8)-89.25%
EPS beat(12)2
Avg EPS beat(12)-60.73%
EPS beat(16)5
Avg EPS beat(16)-44.14%
Revenue beat(2)0
Avg Revenue beat(2)-10.12%
Min Revenue beat(2)-19.64%
Max Revenue beat(2)-0.59%
Revenue beat(4)0
Avg Revenue beat(4)-5.69%
Min Revenue beat(4)-19.64%
Max Revenue beat(4)-0.59%
Revenue beat(8)2
Avg Revenue beat(8)-2.82%
Revenue beat(12)3
Avg Revenue beat(12)-2.4%
Revenue beat(16)5
Avg Revenue beat(16)-1.84%
PT rev (1m)0.11%
PT rev (3m)-11.62%
EPS NQ rev (1m)-3.43%
EPS NQ rev (3m)-263.81%
EPS NY rev (1m)-1078.34%
EPS NY rev (3m)-113.98%
Revenue NQ rev (1m)-2.45%
Revenue NQ rev (3m)-22.84%
Revenue NY rev (1m)-0.5%
Revenue NY rev (3m)-18.71%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.99 | ||
| Fwd PE | 27.65 | ||
| P/S | 0.2 | ||
| P/FCF | 11.28 | ||
| P/OCF | 6.25 | ||
| P/B | 1 | ||
| P/tB | 1.63 | ||
| EV/EBITDA | 9.18 |
EPS(TTM)0.79
EY1.82%
EPS(NY)1.57
Fwd EY3.62%
FCF(TTM)3.85
FCFY8.86%
OCF(TTM)6.95
OCFY15.99%
SpS217.13
BVpS43.49
TBVpS26.59
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.67% | ||
| ROE | 3.23% | ||
| ROCE | 2.1% | ||
| ROIC | 1.79% | ||
| ROICexc | 1.92% | ||
| ROICexgc | 2.28% | ||
| OM | 1.11% | ||
| PM (TTM) | 0.65% | ||
| GM | 41.96% | ||
| FCFM | 1.77% |
ROA(3y)3.16%
ROA(5y)3.59%
ROE(3y)13.26%
ROE(5y)13.47%
ROIC(3y)7.36%
ROIC(5y)8.24%
ROICexc(3y)7.88%
ROICexc(5y)8.94%
ROICexgc(3y)10.57%
ROICexgc(5y)12.09%
ROCE(3y)8.63%
ROCE(5y)9.66%
ROICexcg growth 3Y-48.78%
ROICexcg growth 5Y-37.28%
ROICexc growth 3Y-48.27%
ROICexc growth 5Y-35.14%
OM growth 3Y-49.6%
OM growth 5Y-31.76%
PM growth 3Y-62.2%
PM growth 5Y-43.12%
GM growth 3Y-3.34%
GM growth 5Y-1.9%
F-Score8
Asset Turnover1.04
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.69 | ||
| Debt/FCF | 7.78 | ||
| Debt/EBITDA | 4.13 | ||
| Cap/Depr | 64.07% | ||
| Cap/Sales | 1.43% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 95.87% | ||
| Profit Quality | 274.2% | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z | 1.94 |
F-Score8
WACC9.78%
ROIC/WACC0.18
Cap/Depr(3y)113.55%
Cap/Depr(5y)129.11%
Cap/Sales(3y)2.87%
Cap/Sales(5y)3.22%
Profit Quality(3y)114.59%
Profit Quality(5y)113.46%
High Growth Momentum
Growth
EPS 1Y (TTM)-81.28%
EPS 3Y-55.5%
EPS 5Y-36.26%
EPS Q2Q%95.12%
EPS Next Y-141.1%
EPS Next 2Y44.73%
EPS Next 3Y59.31%
EPS Next 5Y50.35%
Revenue 1Y (TTM)14.81%
Revenue growth 3Y3.75%
Revenue growth 5Y3.33%
Sales Q2Q%-21%
Revenue Next Year-19.55%
Revenue Next 2Y-13.14%
Revenue Next 3Y-8.26%
Revenue Next 5Y-4.46%
EBIT growth 1Y-57.14%
EBIT growth 3Y-47.71%
EBIT growth 5Y-29.48%
EBIT Next Year51.67%
EBIT Next 3Y35.39%
EBIT Next 5Y23.14%
FCF growth 1Y-3.49%
FCF growth 3Y-59.99%
FCF growth 5Y-40.78%
OCF growth 1Y-38.12%
OCF growth 3Y-33.33%
OCF growth 5Y-18.74%