Advance Auto Parts (AAP) AI Stock Analysis

• Market Cap: $2.88B
• Dividend Yield: 2.53%
• Average Volume (3M): 1.78M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.62
• Revenue Growth: -19.41%
• EPS Growth: -957.94%
• Country: US
• Employees: 33,200
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.92
• Shares Outstanding: 60,022,243
• 10 Day Avg. Volume: 1,877,846
• 30 Day Avg. Volume: 1,782,167
• PEG Ratio: <0.01
• Price to Book (P/B): 1.21
• Price to Sales (P/S): 0.29
• P/FCF Ratio: -27.33
• Enterprise Value/Market Cap: 1.72
• Enterprise Value/Revenue: 0.58
• Enterprise Value/Gross Profit: 1.56
• Enterprise Value/Ebitda: -12.49
• 1Y Price Target: $48.13
• Price Target Upside: 0.25% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: $48.00 ▼(-0.02% Downside)

The score is held down primarily by weak financial performance (negative profitability and cash flow, increasing leverage). Technicals remain generally bearish with the stock below key longer-term moving averages. Offsetting support comes from a moderately positive earnings call (margin improvement, reaffirmed guidance, and stronger liquidity) and a modest dividend, with the board appointment providing a small positive signal.

Positive Factors

Market-leading retail footprint

A large, national store and distribution network supports durable competitive advantages: scale in purchasing, faster replenishment for pros and DIY, and brand recognition. Physical reach plus DCs underpins omni-channel sales and resilience versus smaller regional rivals over the medium term.

Comparable sales and margin recovery

Simultaneous comparable-sales growth and meaningful margin expansion indicate improving execution on pricing, cost control, and product mix. If sustained, higher margins translate to stronger operating leverage, improved cash generation and reinvestment capacity, strengthening long-term profitability.

Material liquidity and debt actions

Raising substantial cash and reshaping the capital structure reduces near-term refinancing risk and creates runway for strategic investments. A path toward investment-grade status, if achieved, would lower long-term funding costs and increase flexibility for capex, hub expansion and reshoring inventory.

Negative Factors

Weak profitability and rising leverage

Negative operating and net margins coupled with higher leverage undermine financial resilience. Persistent weak profitability limits internal funding for growth, risks covenant pressure, and reduces strategic optionality versus competitors with stronger margins and balance sheets over the medium term.

Negative operating and free cash flow

Sustained negative operating and free cash flow constrains the company’s ability to deleverage, fund store investments or expand e-commerce without external financing. Reliance on capital markets raises cost and execution risk, and limits durable reinvestment into merchandising and service capabilities.

Sales headwinds and supplier-credit risk

Store optimization trimming footprint has reduced reported sales and creates execution risk in restoring same-store volumes. Concurrent supplier bankruptcy exposure signals vendor-credit and supply-chain risks that can disrupt assortment, inflate costs, and impair margins across future quarters.

Advance Auto Parts Business Overview & Revenue Model

Company Description

Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The company offers battery accessories; belts and hoses; brakes and brake pads; chassis and climate control parts; clutches and drive shafts; engines and engine parts; exhaust systems and parts; hub assemblies; ignition components and wires; radiators and cooling parts; starters and alternators; and steering and alignment parts. It also offers air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluids; electrical wires and fuses; electronics; floor mats, seat covers, and interior accessories; hand and specialty tools; lighting products; performance parts; sealants, adhesives and compounds; tire repair accessories; vent shades, mirrors and exterior accessories; washes, waxes and cleaning supplies; and wiper blades. In addition, the company offers air filters; fuel and oil additives; fuel filters; grease and lubricants; motor oils; oil filters, part cleaners and treatments; and transmission fluids for engine maintenance. Further, it offers battery and wiper installation; engine light scanning and checking; electrical system testing; video clinic; oil and battery recycling; and loaner tool program services. Additionally, the company sells its products through its website. It serves professional installers and do-it-yourself customers. The company operates stores under the Advance Auto Parts, Autopart International, and Carquest brands, as well as branches under the Worldpac name. As of April 23, 2022, it operated 4,687 stores and 311 branches in the United States, Puerto Rico, the U.S. Virgin Islands, and Canada; and served 1,318 independently owned Carquest branded stores in Mexico, Grand Cayman, the Bahamas, Turks and Caicos, and the British Virgin Islands. The company was founded in 1929 and is based in Raleigh, North Carolina.

How the Company Makes Money

Advance Auto Parts generates revenue primarily through the sale of automotive parts and accessories in its retail stores and online platforms. The company's revenue model is based on a combination of direct sales to consumers and professional installers, where it sells products like replacement parts, tools, and maintenance items. Key revenue streams include in-store sales, e-commerce sales, and professional services. Additionally, Advance Auto Parts has established partnerships with various automotive suppliers and manufacturers, which help ensure a broad product offering and competitive pricing. Factors contributing to its earnings include the growing demand for vehicle maintenance, the increasing complexity of automotive technology that necessitates professional repairs, and strong brand recognition among consumers.

Advance Auto Parts Financial Statement Overview

Summary

Weak fundamentals: declining revenue/profitability with negative EBIT and net margins, rising leverage (higher debt-to-equity) and negative ROE, plus negative operating and free cash flow in the TTM period.

Income Statement

Advance Auto Parts has experienced declining revenue growth and profitability over the recent periods. The TTM data shows negative EBIT and net profit margins, indicating operational challenges. The gross profit margin has also decreased over time, reflecting potential cost management issues.

Balance Sheet

The company's debt-to-equity ratio has increased significantly, indicating higher leverage and potential financial risk. Return on equity has turned negative in the TTM period, reflecting poor profitability. The equity ratio remains moderate, but the increasing debt levels are concerning.

Cash Flow

Cash flow metrics show a concerning trend with negative operating and free cash flows in the TTM period. The free cash flow growth rate is positive, but this is due to a less negative figure compared to the previous period. The operating cash flow to net income ratio is negative, indicating cash flow issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.59B	9.09B	9.21B	9.15B	11.00B	10.11B
Gross Profit	3.18B	3.41B	3.86B	4.23B	4.92B	4.48B
EBITDA	-397.75M	-395.08M	310.24M	759.36M	1.08B	947.98M
Net Income	-376.78M	-335.79M	29.73M	464.40M	596.62M	493.02M
Balance Sheet
Total Assets	12.06B	10.80B	12.28B	11.99B	12.19B	11.84B
Cash, Cash Equivalents and Short-Term Investments	3.17B	1.87B	503.47M	270.81M	601.43M	834.99M
Total Debt	5.26B	3.69B	3.83B	3.65B	3.37B	3.05B
Total Liabilities	9.86B	8.63B	9.76B	9.39B	9.07B	8.28B
Stockholders Equity	2.19B	2.17B	2.52B	2.60B	3.13B	3.56B
Cash Flow
Free Cash Flow	-401.39M	-96.17M	61.70M	335.91M	817.38M	701.88M
Operating Cash Flow	-191.30M	84.63M	287.38M	736.57M	1.11B	969.69M
Investing Cash Flow	1.34B	1.35B	-235.49M	-424.45M	-287.31M	-266.90M
Financing Cash Flow	1.54B	-75.01M	189.27M	-620.70M	-1.06B	-286.00M

Advance Auto Parts Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 48.01
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAP, the sentiment is Positive. The current price of 48.01 is above the 20-day moving average (MA) of 44.07, above the 50-day MA of 45.58, and below the 200-day MA of 49.59, indicating a neutral trend. The MACD of 1.23 indicates Negative momentum. The RSI at 60.51 is Neutral, neither overbought nor oversold. The STOCH value of 79.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AAP.

Advance Auto Parts Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RVLV	77 Outperform	$1.97B	35.91	12.19%	―	9.24%	35.68%
GPC	69 Neutral	$19.33B	23.94	17.05%	3.33%	3.26%	-25.41%
ASO	67 Neutral	$3.67B	10.05	18.34%	1.04%	-0.65%	-10.35%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
EYE	57 Neutral	$2.09B	-784.23	-0.37%	―	-1.58%	85.04%
BBWI	53 Neutral	$4.46B	6.70	―	4.16%	-1.04%	-20.88%
AAP	48 Neutral	$2.88B	-7.61	-23.85%	2.53%	-19.41%	-957.94%

Advance Auto Parts Corporate Events

Advance Auto Parts Adds Veteran Retail Leader to Board

On January 12, 2026, Advance Auto Parts appointed Richard “Dick” A. Johnson, the retired chief executive, president and chairman of Foot Locker, as an independent director to its board and a member of its compensation committee, formalizing the move in a January 13, 2026 press release. The addition of Johnson, who also chairs H & R Block’s board and holds multiple other directorships, brings nearly three decades of retail and customer-service experience to Advance as it executes a strategic plan aimed at reinforcing its position as a consistent, reliable auto-parts provider, underscoring the company’s focus on strengthening governance and retail execution in a competitive aftermarket industry.

The most recent analyst rating on (AAP) stock is a Hold with a $42.00 price target. To see the full list of analyst forecasts on Advance Auto Parts stock, see the AAP Stock Forecast page.