ADVANCE AUTO PARTS INC (AAP)
US00751Y1064 - Common Stock
Taking everything into account, AAP scores 3 out of 10 in our fundamental rating. AAP was compared to 126 industry peers in the Specialty Retail industry. AAP has a medium profitability rating, but doesn't score so well on its financial health evaluation. AAP is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AAP was profitable.
In the past year AAP had a positive cash flow from operations.
In the past 5 years AAP has always been profitable.
AAP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 0.45%, AAP perfoms like the industry average, outperforming 50.79% of the companies in the same industry.
The Return On Equity of AAP (2.19%) is comparable to the rest of the industry.
AAP has a Return On Invested Capital of 1.79%. This is comparable to the rest of the industry: AAP outperforms 47.62% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AAP is significantly below the industry average of 13.99%.
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 | 0.45% | ||
| ROE | 2.19% | ||
| 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 has a Profit Margin of 0.49%. This is comparable to the rest of the industry: AAP outperforms 52.38% of its industry peers.
In the last couple of years the Profit Margin of AAP has declined.
AAP has a Operating Margin (1.30%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of AAP has declined.
Looking at the Gross Margin, with a value of 40.34%, AAP is in the better half of the industry, outperforming 60.32% of the companies in the same industry.
In the last couple of years the Gross Margin of AAP has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.3% | ||
| PM (TTM) | 0.49% | ||
| GM | 40.34% |
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.
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 1.86. 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 has a Altman-Z score of 1.86. This is in the lower half of the industry: AAP underperforms 62.70% of its industry peers.
AAP has a debt to FCF ratio of 39.73. This is a negative value and a sign of low solvency as AAP would need 39.73 years to pay back of all of its debts.
AAP has a Debt to FCF ratio (39.73) which is comparable to the rest of the industry.
A Debt/Equity ratio of 0.71 indicates that AAP is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.71, AAP perfoms like the industry average, outperforming 45.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | 39.73 | ||
| Altman-Z | 1.86 |
ROIC/WACC0.2
WACC8.78%
2.3 Liquidity
A Current Ratio of 1.20 indicates that AAP should not have too much problems paying its short term obligations.
AAP has a worse Current ratio (1.20) than 71.43% of its industry peers.
A Quick Ratio of 0.29 indicates that AAP may have some problems paying its short term obligations.
With a Quick ratio value of 0.29, AAP is not doing good in the industry: 76.19% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.2 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
The earnings per share for AAP have decreased strongly by -94.24% 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 -36.26% yearly.
AAP shows a small growth in Revenue. In the last year, the Revenue has grown by 1.19%.
The Revenue has been growing slightly by 3.33% on average over the past years.
EPS 1Y (TTM)-94.24%
EPS 3Y-55.5%
EPS 5Y-36.26%
EPS growth Q2Q-120.49%
Revenue 1Y (TTM)1.19%
Revenue growth 3Y3.75%
Revenue growth 5Y3.33%
Revenue growth Q2Q-0.36%
3.2 Future
AAP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 52.48% yearly.
Based on estimates for the next years, AAP will show a small growth in Revenue. The Revenue will grow by 2.41% on average per year.
EPS Next Y410.73%
EPS Next 2Y145.46%
EPS Next 3Y89.79%
EPS Next 5Y52.48%
Revenue Next Year0.71%
Revenue Next 2Y1.23%
Revenue Next 3Y1.45%
Revenue Next 5Y2.41%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 100.56, AAP can be considered very expensive at the moment.
AAP's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of AAP to the average of the S&P500 Index (25.02), we can say AAP is valued expensively.
A Price/Forward Earnings ratio of 19.69 indicates a rather expensive 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 60.32% of the companies listed in the same industry.
AAP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 100.56 | ||
| Fwd PE | 19.69 |
4.2 Price Multiples
AAP's Enterprise Value to EBITDA is on the same level as the industry average.
AAP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 99.99 | ||
| EV/EBITDA | 12.72 |
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 89.79% in the coming years.
PEG (NY)0.24
PEG (5Y)N/A
EPS Next 2Y145.46%
EPS Next 3Y89.79%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.34%, AAP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.49, AAP pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.40, AAP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.34% |
5.2 History
On average, the dividend of AAP grows each year by 71.07%, which is quite nice.
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
379.34% of the earnings are spent on dividend by AAP. This is not a sustainable payout ratio.
AAP's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP379.34%
EPS Next 2Y145.46%
EPS Next 3Y89.79%
ADVANCE AUTO PARTS INC
NYSE:AAP (4/29/2024, 7:04:00 PM)
After market: 75.42 0 (0%)75.42
+0.28 (+0.37%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
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Inst Owners
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Market Cap4.50B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.34% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 100.56 | ||
| Fwd PE | 19.69 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
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FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.24
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.45% | ||
| ROE | 2.19% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.3% | ||
| PM (TTM) | 0.49% | ||
| GM | 40.34% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
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ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.92
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.71 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.2 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-94.24%
EPS 3Y-55.5%
EPS 5Y
EPS growth Q2Q
EPS Next Y410.73%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)1.19%
Revenue growth 3Y3.75%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
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