Advance Auto Parts (AAP) AI Stock Analysis

• Market Cap: $3.54B
• Dividend Yield: 1.62%
• Average Volume (3M): 2.34M
• Price to Earnings (P/E): 59.6
• Beta (1Y): 0.68
• Revenue Growth: -16.55%
• EPS Growth: -941.57%
• Country: US
• Employees: 33,200
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Specialty Retail
• EPS (TTM): 0.69
• Shares Outstanding: 59,925,636
• 10 Day Avg. Volume: 1,940,895
• 30 Day Avg. Volume: 2,343,085
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 0.42
• Enterprise Value/Gross Profit: 1.13
• Enterprise Value/Ebitda: -8.71
• 1Y Price Target: $51.44
• Price Target Upside: -16.78% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 21

• Rating: 46 Neutral
• Price Target: $52.00 ▼(-15.87% Downside)

Advance Auto Parts is currently facing significant financial hurdles, with operational inefficiencies and cash flow constraints weighing heavily on its overall performance. While there are signs of strategic growth and some technical recovery, the ongoing financial and valuation challenges significantly impact the stock's attractiveness.

Positive Factors

Liquidity Improvement

The proposed debt offering will improve AAP’s liquidity position.

Management Execution

Management continues to execute turnaround.

Strategic Initiatives

Strategic initiatives are starting to show initial results, including market hubs, new assortment framework, and optimizing labor and vehicle schedules.

Negative Factors

Credit Rating

AAP has fallen out of investment grade status and to ensure continued partnership with vendors, AAP needs to have a stable supply chain financing program.

Earnings Per Share

The downside is the cost of capital is high and will likely be dilutive to EPS.

Market Share

Recent data suggests Advance Auto Parts could be losing market share.

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. The company operates on a multi-channel retail model, allowing it to reach customers through brick-and-mortar locations as well as digital platforms. Key revenue streams include sales from over 4,800 stores across the United States, Canada, and Puerto Rico, as well as online sales through its website and mobile app. Additionally, Advance Auto Parts benefits from partnerships with major automotive manufacturers and suppliers, which help to ensure a diverse and reliable product inventory. The company also generates income through its professional sales business, which serves automotive repair shops and commercial accounts, further diversifying its revenue base.

Advance Auto Parts Financial Statement Overview

Summary

Advance Auto Parts is facing severe financial challenges with negative net profit margins and operational inefficiencies. High leverage and negative free cash flow indicate potential financial risks and constraints in managing obligations and growth.

Income Statement

The income statement of Advance Auto Parts shows a challenging period with declining revenue and profitability. Gross Profit Margin for TTM is 36.96%, which demonstrates some strength in cost management. However, the Net Profit Margin is negative at -3.74%, indicating losses. Revenue growth has been negative over the past years, with a significant decline from 2023 to 2024. The company also faces negative EBIT and EBITDA margins at -9.34% and -4.78% respectively, pointing to operational inefficiencies.

Balance Sheet

Advance Auto Parts' balance sheet reveals a moderately leveraged position with a Debt-to-Equity Ratio of 1.67 in TTM. The Return on Equity is negative due to net losses, reflecting poor returns to shareholders. The Equity Ratio stands at 20.69%, which shows a reasonable proportion of equity financing but might be insufficient given the current financial strain. Overall, the balance sheet suggests potential financial risk due to high leverage and declining equity.

Cash Flow

The cash flow situation appears strained, with negative Free Cash Flow and a declining trend in Operating Cash Flow. The Operating Cash Flow to Net Income Ratio is negative, indicating operational cash flow is not sufficient to cover losses. Free Cash Flow to Net Income Ratio is also negative, highlighting cash constraints. This suggests the company might struggle to fund operations and growth without external financing.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.09B	9.21B	11.15B	11.00B	10.11B
Gross Profit	3.41B	3.86B	4.96B	4.93B	4.48B
EBITDA	-395.08M	310.24M	939.22M	1.10B	947.98M
Net Income	-335.79M	29.73M	464.40M	596.62M	493.02M
Balance Sheet
Total Assets	10.80B	12.28B	11.99B	12.19B	11.84B
Cash, Cash Equivalents and Short-Term Investments	1.87B	503.47M	270.81M	601.43M	834.99M
Total Debt	3.69B	3.83B	3.65B	3.37B	3.05B
Total Liabilities	8.63B	9.76B	9.39B	9.07B	8.28B
Stockholders Equity	2.17B	2.52B	2.60B	3.13B	3.56B
Cash Flow
Free Cash Flow	-96.17M	44.96M	296.26M	822.62M	701.88M
Operating Cash Flow	84.63M	287.38M	722.22M	1.11B	969.69M
Investing Cash Flow	1.35B	-235.49M	-424.45M	-287.31M	-266.90M
Financing Cash Flow	-75.01M	189.27M	-620.70M	-1.06B	-286.00M

Advance Auto Parts Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 61.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

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 61.81 is above the 20-day moving average (MA) of 59.00, above the 50-day MA of 54.94, and above the 200-day MA of 43.67, indicating a bullish trend. The MACD of 1.22 indicates Positive momentum. The RSI at 60.65 is Neutral, neither overbought nor oversold. The STOCH value of 83.16 is Negative, 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
AZO	73 Outperform	$66.93B	27.08	-14.95%	―	5.15%	1.99%
MELI	73 Outperform	$119.18B	57.47	43.83%	―	38.27%	46.21%
GPC	72 Outperform	$18.74B	23.21	17.50%	2.94%	2.65%	-32.91%
ORLY	70 Outperform	$86.45B	36.71	-174.09%	―	5.15%	5.33%
BBWI	62 Neutral	$6.04B	7.62	-52.83%	2.70%	-0.93%	-4.07%
Sector *	61 Neutral	$17.22B	11.53	-5.99%	3.08%	1.40%	-15.51%
AAP	46 Neutral	$3.54B	59.62	-23.77%	1.62%	-16.55%	-941.57%

Advance Auto Parts Corporate Events

Advance Auto Parts Issues $1.95 Billion in Senior Notes

On August 4, 2025, Advance Auto Parts, Inc. completed a significant financial transaction by issuing $1.95 billion in senior notes, split equally between 2030 and 2033 maturities, with interest rates of 7.000% and 7.375%, respectively. The proceeds will be used to redeem existing debt and support general corporate purposes, including a new asset-based loan facility, enhancing the company’s financial flexibility and positioning in the market.

The most recent analyst rating on (AAP) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on Advance Auto Parts stock, see the AAP Stock Forecast page.

Advance Auto Parts Announces Credit Agreement Amendment

On July 24, 2025, Advance Auto Parts, Inc. announced Amendment No. 7 to its Credit Agreement, facilitating the issuance of senior notes due in 2030 and 2033. This move is part of the company’s strategic initiatives to optimize assets and improve profitability, following the sale of its Worldpac business in November 2024 for $1.47 billion. The restructuring plan aims to streamline operations, which includes store closures and workforce realignment, reflecting a strategic shift towards the Advance blended-box model.

The most recent analyst rating on (AAP) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on Advance Auto Parts stock, see the AAP Stock Forecast page.

Advance Auto Parts Holds Annual Stockholders Meeting

On May 15, 2025, Advance Auto Parts held its Annual Meeting of Stockholders, where several key decisions were made. The stockholders elected nine nominees to the Board of Directors, approved an amendment to increase shares in the Omnibus Incentive Compensation Plan, and ratified Deloitte and Touche LLP as the independent accounting firm for 2025. Additionally, a non-binding advisory vote approved executive compensation, while a shareholder proposal for additional executive stock retention requirements was rejected.

The most recent analyst rating on (AAP) stock is a Buy with a $55.00 price target. To see the full list of analyst forecasts on Advance Auto Parts stock, see the AAP Stock Forecast page.