Taking everything into account, AAP scores 3 out of 10 in our fundamental rating. AAP was compared to 122 industry peers in the Specialty Retail industry. AAP may be in some trouble as it scores bad on both profitability and health. AAP is valued expensive and it does not seem to be growing.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

AAP had positive earnings in the past year.
AAP had a negative operating cash flow in the past year.
Of the past 5 years AAP 4 years were profitable.
Each year in the past 5 years AAP had a positive operating cash flow.

1.2 Ratios

AAP has a worse Return On Assets (-3.12%) than 63.11% of its industry peers.
Looking at the Return On Equity, with a value of -17.17%, AAP is in line with its industry, outperforming 41.80% of the companies in the same industry.

		Industry Rank	Sector Rank
ROA	-3.12%
ROE	-17.17%
ROIC	N/A

ROA(3y)0.44%

ROA(5y)2.11%

ROE(3y)1.54%

ROE(5y)7.63%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

AAP has a Gross Margin (37.67%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of AAP has declined.
AAP does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.

		Industry Rank	Sector Rank
OM	N/A
PM (TTM)	N/A
GM	37.67%

OM growth 3YN/A

OM growth 5YN/A

PM growth 3YN/A

PM growth 5YN/A

GM growth 3Y-5.8%

GM growth 5Y-3.09%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

AAP does not have a ROIC to compare to the WACC, probably because it is not profitable.
AAP has more shares outstanding than it did 1 year ago.
The number of shares outstanding for AAP has been reduced compared to 5 years ago.
The debt/assets ratio for AAP is higher compared to a year ago.

2.2 Solvency

AAP has an Altman-Z score of 1.59. This is a bad value and indicates that AAP is not financially healthy and even has some risk of bankruptcy.
AAP's Altman-Z score of 1.59 is on the low side compared to the rest of the industry. AAP is outperformed by 63.11% of its industry peers.
AAP has a Debt/Equity ratio of 1.55. This is a high value indicating a heavy dependency on external financing.
AAP has a worse Debt to Equity ratio (1.55) than 64.75% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	1.55
Debt/FCF	N/A
Altman-Z	1.59

ROIC/WACCN/A

WACC8.93%

2.3 Liquidity

A Current Ratio of 1.73 indicates that AAP should not have too much problems paying its short term obligations.
The Current ratio of AAP (1.73) is better than 72.95% of its industry peers.
A Quick Ratio of 0.88 indicates that AAP may have some problems paying its short term obligations.
AAP's Quick ratio of 0.88 is fine compared to the rest of the industry. AAP outperforms 68.03% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.73
Quick Ratio	0.88

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

AAP shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -73.42%.
Measured over the past years, AAP shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -52.42% on average per year.
The Revenue for AAP has decreased by -33.50% in the past year. This is quite bad
The Revenue has been decreasing by -1.30% on average over the past years.

EPS 1Y (TTM)-73.42%

EPS 3Y-74.47%

EPS 5Y-52.42%

EPS Q2Q%2400%

Revenue 1Y (TTM)-33.5%

Revenue growth 3Y-6.14%

Revenue growth 5Y-1.3%

Sales Q2Q%-5.21%

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 92.43% on average per year.
Based on estimates for the next years, AAP will show a small growth in Revenue. The Revenue will grow by 0.72% on average per year.

EPS Next Y810.4%

EPS Next 2Y266.36%

EPS Next 3Y172.1%

EPS Next 5Y92.43%

Revenue Next Year-5.47%

Revenue Next 2Y-2.28%

Revenue Next 3Y-0.69%

Revenue Next 5Y0.72%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 229.14, AAP can be considered very expensive at the moment.
AAP's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of AAP to the average of the S&P500 Index (28.39), we can say AAP is valued expensively.
With a Price/Forward Earnings ratio of 17.93, AAP is valued on the expensive side.
Based on the Price/Forward Earnings ratio, AAP is valued a bit cheaper than 67.21% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of AAP to the average of the S&P500 Index (25.72), we can say AAP is valued slightly cheaper.

		Industry Rank	Sector Rank
PE	229.14
Fwd PE	17.93

4.2 Price Multiples

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	N/A

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as AAP's earnings are expected to grow with 172.10% in the coming years.

PEG (NY)0.28

PEG (5Y)N/A

EPS Next 2Y266.36%

EPS Next 3Y172.1%

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5. Dividend

5.1 Amount

AAP has a Yearly Dividend Yield of 2.18%.
Compared to an average industry Dividend Yield of 2.15, AAP pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 1.82, AAP pays a bit more dividend than the S&P500 average.

		Industry Rank	Sector Rank
Dividend Yield	2.18%

5.2 History

The dividend of AAP is nicely growing with an annual growth rate of 32.92%!
AAP has paid a dividend for at least 10 years, which is a reliable track record.

Dividend Growth(5Y)32.92%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

AAP has negative earnings and hence a negative payout ratio. The dividend may be in danger.
AAP's earnings are growing more than its dividend. This makes the dividend growth sustainable.

DP-15.92%

EPS Next 2Y266.36%

EPS Next 3Y172.1%

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ADVANCE AUTO PARTS INC / AAP FAQ

What is the fundamental rating for AAP stock?

ChartMill assigns a fundamental rating of 3 / 10 to AAP.

Can you provide the valuation status for ADVANCE AUTO PARTS INC?

ChartMill assigns a valuation rating of 3 / 10 to ADVANCE AUTO PARTS INC (AAP). This can be considered as Overvalued.

Can you provide the profitability details for ADVANCE AUTO PARTS INC?

ADVANCE AUTO PARTS INC (AAP) has a profitability rating of 2 / 10.

Can you provide the PE and PB ratios for AAP stock?

The Price/Earnings (PE) ratio for ADVANCE AUTO PARTS INC (AAP) is 229.14 and the Price/Book (PB) ratio is 1.32.

Can you provide the expected EPS growth for AAP stock?

The Earnings per Share (EPS) of ADVANCE AUTO PARTS INC (AAP) is expected to grow by 810.4% in the next year.