ADVANCE AUTO PARTS INC (AAP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AAP - US00751Y1064 - Common Stock
46.77 USD
+0.98 (+2.14%)
46.77 USD
0 (0%)
We assign a fundamental rating of 3 out of 10 to AAP. AAP was compared to 121 industry peers in the Specialty Retail industry. Both the profitability and financial health of AAP have multiple concerns. AAP does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
- In the past year AAP was profitable.
- In the past year AAP has reported a negative cash flow from operations.
- Of the past 5 years AAP 4 years were profitable.
- AAP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- AAP has a Return On Assets of -3.12%. This is in the lower half of the industry: AAP underperforms 62.81% of its industry peers.
- AAP's Return On Equity of -17.17% is in line compared to the rest of the industry. AAP outperforms 42.15% of its industry peers.
| 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
- The Gross Margin of AAP (37.67%) is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of AAP has declined.
- The Profit Margin and Operating Margin are not available for AAP so they could not be analyzed.
| 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%
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.
- AAP has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for AAP is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 1.58, we must say that AAP is in the distress zone and has some risk of bankruptcy.
- AAP has a Altman-Z score of 1.58. This is in the lower half of the industry: AAP underperforms 63.64% of its industry peers.
- A Debt/Equity ratio of 1.55 is on the high side and indicates that AAP has dependencies on debt financing.
- AAP has a Debt to Equity ratio of 1.55. This is in the lower half of the industry: AAP underperforms 64.46% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.55 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.58 |
ROIC/WACCN/A
WACC8.95%
2.3 Liquidity
- AAP has a Current Ratio of 1.73. This is a normal value and indicates that AAP is financially healthy and should not expect problems in meeting its short term obligations.
- AAP has a Current ratio of 1.73. This is in the better half of the industry: AAP outperforms 73.55% of its industry peers.
- A Quick Ratio of 0.88 indicates that AAP may have some problems paying its short term obligations.
- AAP has a better Quick ratio (0.88) than 68.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.73 | ||
| Quick Ratio | 0.88 |
3. Growth
3.1 Past
- The earnings per share for AAP have decreased strongly by -73.42% in the last year.
- AAP shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -52.42% yearly.
- AAP shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -33.50%.
- 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
- The Earnings Per Share is expected to grow by 92.43% on average over the next years. This is a very strong growth
- AAP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.72% yearly.
EPS Next Y815.17%
EPS Next 2Y269.57%
EPS Next 3Y173.67%
EPS Next 5Y92.43%
Revenue Next Year-5.47%
Revenue Next 2Y-2.28%
Revenue Next 3Y-0.75%
Revenue Next 5Y0.72%
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 accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 222.71, the valuation of AAP can be described as expensive.
- The rest of the industry has a similar Price/Earnings ratio as AAP.
- Compared to an average S&P500 Price/Earnings ratio of 27.21, AAP is valued quite expensively.
- With a Price/Forward Earnings ratio of 17.12, AAP is valued on the expensive side.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of AAP indicates a somewhat cheap valuation: AAP is cheaper than 71.90% of the companies listed in the same industry.
- AAP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 222.71 | ||
| Fwd PE | 17.12 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- AAP's 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 173.67% in the coming years.
PEG (NY)0.27
PEG (5Y)N/A
EPS Next 2Y269.57%
EPS Next 3Y173.67%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.18%, AAP has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.08, AAP pays a better dividend. On top of this AAP pays more dividend than 80.17% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, AAP has a dividend comparable with the average S&P500 company.
| 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
- The earnings of AAP are negative and hence is the payout ratio. AAP will probably not be able to sustain this dividend level.
- AAP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-15.92%
EPS Next 2Y269.57%
EPS Next 3Y173.67%
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 222.71 and the Price/Book (PB) ratio is 1.28.
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 815.17% in the next year.