ADVANCE AUTO PARTS INC (AAP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AAP - US00751Y1064 - Common Stock
46.1559 USD
+0.37 (+0.8%)
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 has a valuation in line with the averages, but it does not seem to be growing.
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.
- AAP had positive earnings in 4 of the past 5 years.
- Each year in the past 5 years AAP had a positive operating cash flow.
1.2 Ratios
- AAP's Return On Assets of -3.12% is on the low side compared to the rest of the industry. AAP is outperformed by 62.81% of its industry peers.
- AAP has a Return On Equity (-17.17%) which is comparable to the rest of the 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
- Looking at the Gross Margin, with a value of 37.67%, AAP is in line with its industry, outperforming 54.55% of the companies in the same industry.
- AAP's Gross Margin has declined in the last couple of years.
- 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.
- AAP has a worse debt/assets ratio than last year.
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.
- Looking at the Altman-Z score, with a value of 1.58, AAP is doing worse than 63.64% of the companies in the same industry.
- AAP has a Debt/Equity ratio of 1.55. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of AAP (1.55) is worse than 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
- 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 73.55% of its industry peers.
- A Quick Ratio of 0.88 indicates that AAP may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.88, AAP is in the better half of the industry, outperforming 68.59% of the companies in the same industry.
| 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.
- 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.
- AAP shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -33.50%.
- AAP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.30% yearly.
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
- AAP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 92.43% yearly.
- The Revenue is expected to grow by 0.72% on average over the next years.
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 219.79, the valuation of AAP can be described as expensive.
- AAP's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.30. AAP is valued rather expensively when compared to this.
- A Price/Forward Earnings ratio of 16.90 indicates a correct valuation of AAP.
- 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.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, AAP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 219.79 | ||
| Fwd PE | 16.9 |
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 2.34%, 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 pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.34% |
5.2 History
- The dividend of AAP is nicely growing with an annual growth rate of 32.92%!
- AAP has been paying a dividend for at least 10 years, so it has 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.
- The dividend of AAP is growing, but earnings are growing more, so the dividend growth is 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 4 / 10 to ADVANCE AUTO PARTS INC (AAP). This can be considered as Fairly Valued.
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 219.79 and the Price/Book (PB) ratio is 1.26.
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.