Advance Auto Parts (AAP) AI Stock Analysis

• Market Cap: $2.89B
• Dividend Yield: 1.97%
• Average Volume (3M): 1.89M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.73
• 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: 2,389,529
• 30 Day Avg. Volume: 1,890,779
• 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: 2.00
• Enterprise Value/Revenue: 0.87
• Enterprise Value/Gross Profit: 2.04
• Enterprise Value/Ebitda: 17.27
• 1Y Price Target: $57.74
• Price Target Upside: 21.63% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 22
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 41 Neutral
• Price Target: $45.00 ▼(-5.20% Downside)

Advance Auto Parts is currently facing significant financial and operational challenges, reflected in its low financial performance score. The technical analysis indicates a bearish trend, and the valuation metrics are unfavorable with a negative P/E ratio. Despite some positive strategic initiatives highlighted in the earnings call, the overall outlook remains cautious due to financial constraints and market pressures.

Positive Factors

Comparable Sales Growth

Sustained growth in comparable sales indicates strong demand in both Pro and DIY channels, reflecting effective market strategies and customer engagement.

Operating Margin Expansion

Significant margin expansion demonstrates improved operational efficiency and cost management, enhancing long-term profitability potential.

Debt Reorganization

Proactive debt reorganization strengthens the balance sheet, providing financial flexibility and aiming for an investment-grade credit rating.

Negative Factors

Declining Revenue

A decline in net sales reflects challenges in maintaining revenue growth, potentially impacting long-term market position and financial health.

Negative Free Cash Flow

Negative free cash flow indicates cash constraints, which could limit the company's ability to fund operations and invest in growth initiatives.

Supplier Bankruptcy Risk

Supplier bankruptcy risk poses potential future credit losses, affecting supply chain stability and financial performance.

Advance Auto Parts Business Overview & Revenue Model

Company Description

Advance Auto Parts, Inc. is a leading retailer and distributor of automotive aftermarket parts, accessories, and maintenance items in North America. The company operates both physical stores and an online platform, providing a wide range of products including batteries, brake parts, engine components, and performance accessories. Advance Auto Parts serves both professional installers and do-it-yourself customers, positioning itself in the automotive sector as a one-stop shop for all automotive needs.

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 significant financial challenges, with declining revenues, operational inefficiencies, and net losses impacting profitability. The high leverage and weakened equity position further exacerbate financial risk. Cash flow constraints could hinder the company's ability to manage its financial obligations and invest in growth. Overall, the financial statements indicate a need for strategic adjustments to improve stability and financial health.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2019	Dec 2018
Income Statement
Total Revenue	6.60B	9.09B	9.21B	9.15B	9.71B	9.58B
Gross Profit	2.83B	3.41B	3.86B	4.23B	4.25B	4.22B
EBITDA	334.00M	-395.08M	310.24M	759.36M	916.01M	850.04M
Net Income	38.00M	-335.79M	29.73M	464.40M	486.90M	423.85M
Balance Sheet
Total Assets	12.06B	10.80B	12.28B	11.99B	11.25B	9.04B
Cash, Cash Equivalents and Short-Term Investments	3.17B	1.87B	503.47M	270.81M	418.67M	896.53M
Total Debt	5.26B	3.69B	3.83B	3.65B	2.76B	1.05B
Total Liabilities	9.86B	8.63B	9.76B	9.39B	7.70B	5.49B
Stockholders Equity	2.19B	2.17B	2.52B	2.60B	3.55B	3.55B
Cash Flow
Free Cash Flow	-277.00M	-96.17M	61.70M	335.91M	395.26M	617.31M
Operating Cash Flow	-118.00M	84.63M	287.38M	736.57M	866.91M	811.03M
Investing Cash Flow	-137.00M	1.35B	-235.49M	-424.45M	-462.94M	-191.83M
Financing Cash Flow	1.56B	-75.01M	189.27M	-620.70M	-882.15M	-263.92M

Advance Auto Parts Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 47.47
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AAP, the sentiment is Negative. The current price of 47.47 is below the 20-day moving average (MA) of 52.56, below the 50-day MA of 56.89, and below the 200-day MA of 48.09, indicating a bearish trend. The MACD of -2.41 indicates Positive momentum. The RSI at 34.48 is Neutral, neither overbought nor oversold. The STOCH value of 16.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AAP.

Advance Auto Parts Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MELI	78 Outperform	$116.89B	56.19	40.65%	―	38.01%	44.52%
GPC	64 Neutral	$17.33B	21.46	17.05%	3.27%	3.26%	-25.41%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ORLY	60 Neutral	$79.46B	32.90	―	―	6.19%	6.98%
BBWI	59 Neutral	$4.88B	7.03	―	3.53%	-0.18%	-18.95%
AZO	58 Neutral	$61.14B	25.27	―	―	2.43%	-3.34%
AAP	41 Neutral	$2.89B	―	-23.85%	1.97%	-19.41%	-957.94%

Advance Auto Parts Corporate Events

Advance Auto Parts Q3 Earnings: Strategic Gains Amid Challenges

Advance Auto Parts Inc’s recent earnings call presented a mixed sentiment, highlighting both strategic successes and ongoing challenges. While the company celebrated achievements in sales growth and margin expansion, it also faced hurdles such as a decline in net sales and negative free cash flow. The management remains optimistic about future growth, despite short-term consumer spending pressures and supplier-related risks.

Advance Auto Parts Reports Strong Q3 2025 Performance

Advance Auto Parts, Inc. is a prominent provider of automotive aftermarket parts in North America, catering to both professional installers and do-it-yourself customers through its extensive network of stores across the United States, Canada, Puerto Rico, and the U.S. Virgin Islands.

Advance Auto Parts Director Announces Retirement

On October 27, 2025, Jeffrey J. Jones II announced his intention to retire from the Board of Directors of Advance Auto Parts, Inc. at the end of the year. His departure will coincide with his planned retirement as President and CEO of H&R Block, Inc., and will result in the reduction of the company’s board size to eight directors.

The most recent analyst rating on (AAP) stock is a Hold with a $60.00 price target. To see the full list of analyst forecasts on Advance Auto Parts stock, see the AAP Stock Forecast page.

Advance Auto Parts Earnings Call Highlights Profitability and Challenges

Advance Auto Parts Inc. recently held its earnings call, revealing a mixed sentiment. The company celebrated a return to profitability and growth in its Pro business, alongside strategic initiatives in SKU expansion and supply chain management. However, challenges were noted, including a decline in net sales, underperformance in the DIY channel, tariff impacts, and stagnant SG&A and gross margin improvements.

Advance Auto Parts Returns to Profitability in Q2 2025

Advance Auto Parts, Inc. is a prominent provider of automotive aftermarket parts in North America, catering to both professional installers and do-it-yourself customers. The company operates thousands of stores across the United States, Canada, Puerto Rico, and the U.S. Virgin Islands, with additional locations in Mexico and the Caribbean.

Advance Auto Parts Secures New $1 Billion Credit Facility

On August 12, 2025, Advance Auto Parts, Inc. entered into a new five-year senior secured first lien asset-based revolving credit facility with Bank of America, N.A., providing up to $1.0 billion in credit. This move is part of their strategic financial management, replacing a prior facility and supporting their operational liquidity. The company reported its second quarter 2025 results, highlighting a return to profitability with net sales of $2.0 billion and a slight increase in comparable store sales. Despite a decrease in net sales compared to the previous year, the company achieved margin expansion due to cost savings from footprint optimization. Advance Auto Parts reaffirmed its full-year sales, operating margin, and free cash flow guidance, indicating confidence in its strategic direction and commitment to shareholder value.

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 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.