ADVANCE AUTO PARTS INC (AAP) Fundamental Analysis & Valuation

NYSE:AAP • US00751Y1064

Current stock price

55.82 USD
-0.78 (-1.38%)
Last:

This AAP fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

3

1. AAP Profitability Analysis

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.
  • Of the past 5 years AAP 4 years had a positive operating cash flow.
AAP Yearly Net Income VS EBIT VS OCF VS FCFAAP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500M 1B

1.2 Ratios

  • AAP's Return On Assets of 0.37% is in line compared to the rest of the industry. AAP outperforms 47.15% of its industry peers.
  • AAP has a Return On Equity of 2.00%. This is comparable to the rest of the industry: AAP outperforms 52.85% of its industry peers.
  • AAP has a Return On Invested Capital (2.22%) which is comparable to the rest of the industry.
Industry RankSector Rank
ROA 0.37%
ROE 2%
ROIC 2.22%
ROA(3y)-0.83%
ROA(5y)1.35%
ROE(3y)-4.1%
ROE(5y)5.26%
ROIC(3y)N/A
ROIC(5y)N/A
AAP Yearly ROA, ROE, ROICAAP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 10 -10

1.3 Margins

  • With a Profit Margin value of 0.51%, AAP perfoms like the industry average, outperforming 48.78% of the companies in the same industry.
  • In the last couple of years the Profit Margin of AAP has declined.
  • AAP has a Operating Margin (2.50%) which is in line with its industry peers.
  • In the last couple of years the Operating Margin of AAP has declined.
  • AAP has a better Gross Margin (43.87%) than 68.29% of its industry peers.
  • AAP's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 2.5%
PM (TTM) 0.51%
GM 43.87%
OM growth 3Y-28.22%
OM growth 5Y-20.59%
PM growth 3Y-51.56%
PM growth 5Y-36.3%
GM growth 3Y-0.48%
GM growth 5Y-0.23%
AAP Yearly Profit, Operating, Gross MarginsAAP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 10 20 30 40

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2

2. AAP Health Analysis

2.1 Basic Checks

  • AAP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
  • Compared to 1 year ago, AAP has more shares outstanding
  • Compared to 5 years ago, AAP has less shares outstanding
  • The debt/assets ratio for AAP is higher compared to a year ago.
AAP Yearly Shares OutstandingAAP Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 20M 40M 60M
AAP Yearly Total Debt VS Total AssetsAAP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B 8B 10B

2.2 Solvency

  • Based on the Altman-Z score of 1.81, we must say that AAP is in the distress zone and has some risk of bankruptcy.
  • AAP's Altman-Z score of 1.81 is in line compared to the rest of the industry. AAP outperforms 41.46% 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.
  • The Debt to Equity ratio of AAP (1.55) is worse than 66.67% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.55
Debt/FCF N/A
Altman-Z 1.81
ROIC/WACC0.36
WACC6.1%
AAP Yearly LT Debt VS Equity VS FCFAAP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 1B 2B 3B

2.3 Liquidity

  • AAP has a Current Ratio of 1.75. 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 better Current ratio (1.75) than 70.73% of its industry peers.
  • AAP has a Quick Ratio of 1.75. This is a bad value and indicates that AAP is not financially healthy enough and could expect problems in meeting its short term obligations.
  • Looking at the Quick ratio, with a value of 0.87, AAP is in the better half of the industry, outperforming 65.85% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 1.75
Quick Ratio 0.87
AAP Yearly Current Assets VS Current LiabilitesAAP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

4

3. AAP Growth Analysis

3.1 Past

  • AAP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 1025.00%, which is quite impressive.
  • The earnings per share for AAP have been decreasing by -23.36% on average. This is quite bad
  • The Revenue for AAP has decreased by -31.19% in the past year. This is quite bad
  • AAP shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.17% yearly.
EPS 1Y (TTM)1025%
EPS 3Y-44.31%
EPS 5Y-23.36%
EPS Q2Q%172.88%
Revenue 1Y (TTM)-31.19%
Revenue growth 3Y-8.3%
Revenue growth 5Y-3.17%
Sales Q2Q%-1.15%

3.2 Future

  • AAP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.68% yearly.
  • The Revenue is expected to grow by 2.06% on average over the next years.
EPS Next Y24.24%
EPS Next 2Y32.98%
EPS Next 3Y28.97%
EPS Next 5Y15.68%
Revenue Next Year-0.43%
Revenue Next 2Y1.03%
Revenue Next 3Y1.48%
Revenue Next 5Y2.06%

3.3 Evolution

  • The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
  • 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.
AAP Yearly Revenue VS EstimatesAAP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2B 4B 6B 8B 10B
AAP Yearly EPS VS EstimatesAAP Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 0 2 4 6 8 10

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3

4. AAP Valuation Analysis

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 24.81, the valuation of AAP can be described as rather expensive.
  • 60.98% of the companies in the same industry are more expensive than AAP, based on the Price/Earnings ratio.
  • AAP's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.91.
  • With a Price/Forward Earnings ratio of 19.97, AAP is valued on the expensive side.
  • AAP's Price/Forward Earnings is on the same level as the industry average.
  • The average S&P500 Price/Forward Earnings ratio is at 21.99. AAP is around the same levels.
Industry RankSector Rank
PE 24.81
Fwd PE 19.97
AAP Price Earnings VS Forward Price EarningsAAP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, AAP is valued a bit cheaper than 68.29% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 7.61
AAP Per share dataAAP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 50 100

4.3 Compensation for Growth

  • AAP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
  • AAP's earnings are expected to grow with 28.97% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.02
PEG (5Y)N/A
EPS Next 2Y32.98%
EPS Next 3Y28.97%

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4

5. AAP Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 1.72%, AAP has a reasonable but not impressive dividend return.
  • AAP's Dividend Yield is a higher than the industry average which is at 3.79.
  • AAP's Dividend Yield is comparable with the S&P500 average which is at 1.82.
Industry RankSector Rank
Dividend Yield 1.72%

5.2 History

  • On average, the dividend of AAP grows each year by 32.92%, which is quite nice.
  • AAP has been paying a dividend for at least 10 years, so it has a reliable track record.
  • AAP has decreased its dividend recently.
Dividend Growth(5Y)32.92%
Div Incr Years0
Div Non Decr Years1
AAP Yearly Dividends per shareAAP Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3 4 5

5.3 Sustainability

  • AAP pays out 136.36% of its income as dividend. This is not a sustainable payout ratio.
  • AAP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP136.36%
EPS Next 2Y32.98%
EPS Next 3Y28.97%
AAP Yearly Income VS Free CF VS DividendAAP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 200M -200M 400M 600M 800M
AAP Dividend Payout.AAP Dividend Payout, showing the Payout Ratio.AAP Dividend Payout.PayoutRetained Earnings

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AAP Fundamentals: All Metrics, Ratios and Statistics

ADVANCE AUTO PARTS INC

NYSE:AAP (4/29/2026, 11:13:52 AM)

55.82

-0.78 (-1.38%)

Chartmill FA Rating
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Industry Strength32.3
Industry Growth54.66
Earnings (Last)02-13
Earnings (Next)05-20
Inst Owners127.17%
Inst Owner Change0.28%
Ins Owners0.68%
Ins Owner Change4.95%
Market Cap3.37B
Revenue(TTM)8.60B
Net Income(TTM)44.00M
Analysts57.14
Price Target57.16 (2.4%)
Short Float %19.24%
Short Ratio7.14
Dividend
Industry RankSector Rank
Dividend Yield 1.72%
Yearly Dividend1
Dividend Growth(5Y)32.92%
DP136.36%
Div Incr Years0
Div Non Decr Years1
Ex-Date04-10
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)62.43%
Min EPS beat(2)21.16%
Max EPS beat(2)103.71%
EPS beat(4)4
Avg EPS beat(4)54.25%
Min EPS beat(4)18.85%
Max EPS beat(4)103.71%
EPS beat(8)5
Avg EPS beat(8)10.85%
EPS beat(12)5
Avg EPS beat(12)-42.94%
EPS beat(16)6
Avg EPS beat(16)-32.17%
Revenue beat(2)1
Avg Revenue beat(2)-0.19%
Min Revenue beat(2)-0.44%
Max Revenue beat(2)0.05%
Revenue beat(4)3
Avg Revenue beat(4)0.64%
Min Revenue beat(4)-0.44%
Max Revenue beat(4)2.34%
Revenue beat(8)4
Avg Revenue beat(8)-2.11%
Revenue beat(12)5
Avg Revenue beat(12)-1.57%
Revenue beat(16)6
Avg Revenue beat(16)-1.5%
PT rev (1m)-0.44%
PT rev (3m)4.87%
EPS NQ rev (1m)2.74%
EPS NQ rev (3m)9.71%
EPS NY rev (1m)0.39%
EPS NY rev (3m)4.14%
Revenue NQ rev (1m)-0.23%
Revenue NQ rev (3m)-0.42%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-1.47%
Valuation
Industry RankSector Rank
PE 24.81
Fwd PE 19.97
P/S 0.39
P/FCF N/A
P/OCF N/A
P/B 1.53
P/tB 2.81
EV/EBITDA 7.61
EPS(TTM)2.25
EY4.03%
EPS(NY)2.8
Fwd EY5.01%
FCF(TTM)-4.94
FCFYN/A
OCF(TTM)-0.76
OCFYN/A
SpS142.58
BVpS36.43
TBVpS19.86
PEG (NY)1.02
PEG (5Y)N/A
Graham Number42.9467 (-23.06%)
Profitability
Industry RankSector Rank
ROA 0.37%
ROE 2%
ROCE 2.81%
ROIC 2.22%
ROICexc 3.75%
ROICexgc 4.82%
OM 2.5%
PM (TTM) 0.51%
GM 43.87%
FCFM N/A
ROA(3y)-0.83%
ROA(5y)1.35%
ROE(3y)-4.1%
ROE(5y)5.26%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3Y-27.34%
ROICexgc growth 5Y-18.96%
ROICexc growth 3Y-26.3%
ROICexc growth 5Y-17.96%
OM growth 3Y-28.22%
OM growth 5Y-20.59%
PM growth 3Y-51.56%
PM growth 5Y-36.3%
GM growth 3Y-0.48%
GM growth 5Y-0.23%
F-Score4
Asset Turnover0.73
Health
Industry RankSector Rank
Debt/Equity 1.55
Debt/FCF N/A
Debt/EBITDA 7.01
Cap/Depr 92.65%
Cap/Sales 2.93%
Interest Coverage 2.83
Cash Conversion N/A
Profit Quality N/A
Current Ratio 1.75
Quick Ratio 0.87
Altman-Z 1.81
F-Score4
WACC6.1%
ROIC/WACC0.36
Cap/Depr(3y)77.89%
Cap/Depr(5y)99.04%
Cap/Sales(3y)2.52%
Cap/Sales(5y)2.8%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)1025%
EPS 3Y-44.31%
EPS 5Y-23.36%
EPS Q2Q%172.88%
EPS Next Y24.24%
EPS Next 2Y32.98%
EPS Next 3Y28.97%
EPS Next 5Y15.68%
Revenue 1Y (TTM)-31.19%
Revenue growth 3Y-8.3%
Revenue growth 5Y-3.17%
Sales Q2Q%-1.15%
Revenue Next Year-0.43%
Revenue Next 2Y1.03%
Revenue Next 3Y1.48%
Revenue Next 5Y2.06%
EBIT growth 1Y167.53%
EBIT growth 3Y-34.18%
EBIT growth 5Y-23.11%
EBIT Next Year196.95%
EBIT Next 3Y49.31%
EBIT Next 5Y26.16%
FCF growth 1Y-209.88%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-154.35%
OCF growth 3YN/A
OCF growth 5YN/A

ADVANCE AUTO PARTS INC / AAP Fundamental Analysis 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.


What is the profitability of AAP stock?

ADVANCE AUTO PARTS INC (AAP) has a profitability rating of 3 / 10.


What is the valuation of ADVANCE AUTO PARTS INC based on its PE and PB ratios?

The Price/Earnings (PE) ratio for ADVANCE AUTO PARTS INC (AAP) is 24.81 and the Price/Book (PB) ratio is 1.53.


Is the dividend of ADVANCE AUTO PARTS INC sustainable?

The dividend rating of ADVANCE AUTO PARTS INC (AAP) is 4 / 10 and the dividend payout ratio is 136.36%.