Advance Auto Parts Inc (AAP)
NYSE:AAP
Top Page
Advance Auto Parts
(NYSE:AAP)
Select Model
Select Model
Rating:50Neutral
Price Target:
$47.00
▼(-16.09% Downside)
Action:ReiteratedDate:03/12/26
The score is held back primarily by weak financial performance—thin profitability, higher leverage, and negative recent cash flow. Offsetting this is a more optimistic earnings outlook with guidance pointing to meaningful margin improvement and a return to positive free cash flow, while technicals and valuation are mixed (modest trend improvement but high P/E).
Positive Factors
Margin recovery
Sustained margin recovery reflects structural improvements (sourcing, footprint optimization, pricing and lower product costs). If maintained, higher gross and operating margins provide durable operating leverage, improving ability to fund reinvestment and absorb cost variability over the medium term.
Negative Factors
Elevated leverage
Material increase in leverage constrains strategic flexibility and raises fixed interest costs, making the company more sensitive to demand shocks or margin setbacks. Elevated debt reduces capacity for opportunistic investment and heightens refinancing and covenant risk over a multi‑quarter horizon.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin recovery
Sustained margin recovery reflects structural improvements (sourcing, footprint optimization, pricing and lower product costs). If maintained, higher gross and operating margins provide durable operating leverage, improving ability to fund reinvestment and absorb cost variability over the medium term.
Read all positive factors
Advance Auto Parts (AAP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.39B
Dividend Yield2.53%
Average Volume (3M)1.44M
Price to Earnings (P/E)52.9
Beta (1Y)0.57
Revenue Growth-19.41%
EPS Growth-957.94%
CountryUS
Employees33,200
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.86
Shares Outstanding60,100,000
10 Day Avg. Volume1,203,803
30 Day Avg. Volume1,442,894
Financial Highlights & Ratios
PEG Ratio-0.47
Price to Book (P/B)1.06
Price to Sales (P/S)0.27
P/FCF Ratio-7.82
Enterprise Value/Market Cap1.61
Enterprise Value/Revenue0.64
Enterprise Value/Gross Profit1.46
Enterprise Value/Ebitda17.09
Forecast
1Y Price Target
$58.58Price Target Upside4.59% Upside
Rating ConsensusHold
Number of Analyst Covering16
EPS Forecast (FY)2.75
Revenue Forecast (FY)$8.55B
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; be...
How the Company Makes Money
AAP primarily makes money by selling automotive aftermarket products and related services through two main customer channels: (1) DIY retail customers who purchase parts and accessories in stores or via e-commerce, and (2) professional customers (...
Advance Auto Parts Key Performance Indicators (KPIs)
Any
Store Count
Indicates the total number of retail locations, reflecting the company's market presence and potential reach to customers. A growing store count can signal expansion and increased sales opportunities.
Indicates the total number of retail locations, reflecting the company's market presence and potential reach to customers. A growing store count can signal expansion and increased sales opportunities.
Data provided by:
The Fly
The FlyAdvance Auto Parts Earnings Call Summary
Earnings Call Date:Feb 13, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 27, 2026
Earnings Call Sentiment Positive
The call emphasized clear operational progress and material margin recovery: return to positive comparable sales, significant gross- and operating-margin expansion, a return to positive adjusted EPS, major SKU and availability improvements, DC consolidation, and a stronger balance sheet. Management provided concrete 2026 guidance (1%–2% underlying sales growth, 3.8%–4.5% operating margin, ~45% gross margin, $2.40–$3.10 adjusted EPS and ~$100M free cash flow) while acknowledging near-term headwinds — notably a large negative free cash flow in 2025, continued DIY softness, LIFO and markdown pressures, and the early-stage nature of supply chain and store productivity investments. Overall, the positive operational and margin momentum and clearer path to profitability outweigh the near-term cash and top-line challenges, but execution on supply chain and store initiatives remains critical.Positive Updates
Return to Positive Comparable Sales
Comparable sales returned to positive after three years of declines: full-year 2025 comps were just under +1%, and Q4 comparable sales grew +1.1%. Pro channel strengthened throughout the year and grew nearly +4% in Q4, with low single-digit positive comps over the last six months.
Negative Updates
Decline in Reported Net Sales and DIY Weakness
Reported net sales declined: FY2025 net sales from continuing operations fell ~5% (primarily due to store optimization) and Q4 net sales declined ~1% YOY. DIY channel remained volatile and posted a low single-digit comp decline for the year, with top-line momentum lagging management’s earlier expectations.
Read all updates
Q4-2025 Updates
Positive
Negative
Return to Positive Comparable Sales
Comparable sales returned to positive after three years of declines: full-year 2025 comps were just under +1%, and Q4 comparable sales grew +1.1%. Pro channel strengthened throughout the year and grew nearly +4% in Q4, with low single-digit positive comps over the last six months.
Read all positive updates
Company Guidance
The company guided to underlying net sales growth of roughly 1%–2% in 2026 (noting a slight reported sales decline from a $51M liquidation and a $132M extra week that together create a >200‑bp headwind), comparable sales of 1%–2%, same‑SKU inflation of ~2%–3%, and an adjusted operating income margin of 3.8%–4.5% (130–200 bps of year‑over‑year expansion toward a medium‑term 7% goal), with gross margin expanding ~110–150 bps to about 45% (Q1 ~44%–45%), SG&A expected down year‑over‑year (driving ~20–50 bps of leverage and Q1 SG&A down ~3%–4%), adjusted diluted EPS of $2.40–$3.10, pretax interest expense of ~$210M (partially offset by ~$80M interest income), CapEx of ~$300M, free cash flow returning to positive ~ $100M (including $10–20M carryover from store optimization), an expected ~50‑bp LIFO headwind for 2026 (≈$30M LIFO headwind in Q1), plans to open ~40–45 stores and 10–15 market hubs (operate ~15 DCs by year‑end), and a strong balance sheet with >$3B cash, a $1B undrawn revolver and net leverage about 2.4x (target 2.0–2.5x).Advance Auto Parts Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
35
Negative
Cash Flow
28
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.60B | 9.09B | 9.21B | 9.15B | 11.00B |
| Gross Profit | 3.73B | 3.41B | 3.86B | 4.23B | 4.92B |
| EBITDA | 320.00M | -395.00M | 310.00M | 759.36M | 1.08B |
| Net Income | 44.00M | -336.00M | 30.00M | 464.40M | 596.62M |
Balance Sheet | |||||
| Total Assets | 11.83B | 10.80B | 12.28B | 11.99B | 12.19B |
| Cash, Cash Equivalents and Short-Term Investments | 3.12B | 1.87B | 488.05M | 270.81M | 601.43M |
| Total Debt | 5.22B | 3.69B | 3.83B | 3.65B | 3.37B |
| Total Liabilities | 9.63B | 8.63B | 9.76B | 9.39B | 9.07B |
| Stockholders Equity | 2.20B | 2.17B | 2.52B | 2.60B | 3.13B |
Cash Flow | |||||
| Free Cash Flow | -298.00M | -96.17M | 61.70M | 335.91M | 817.38M |
| Operating Cash Flow | -46.00M | 84.63M | 287.38M | 736.57M | 1.11B |
| Investing Cash Flow | -239.00M | 1.35B | -235.49M | -424.45M | -287.31M |
| Financing Cash Flow | 1.54B | -75.01M | 189.27M | -620.70M | -1.06B |
Advance Auto Parts Technical Analysis
Positive
56.01
Price Trends
52.97
Positive
49.17
Positive
52.57
Positive
Market Momentum
1.11
Negative
59.26
Neutral
68.64
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 56.01 is above the 20-day moving average (MA) of 52.22, above the 50-day MA of 52.97, and above the 200-day MA of 52.57, indicating a bullish trend. The MACD of 1.11 indicates Negative momentum. The RSI at 59.26 is Neutral, neither overbought nor oversold. The STOCH value of 68.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AAP.
Advance Auto Parts Risk Analysis
Advance Auto Parts disclosed 24 risk factors in its most recent earnings report. Advance Auto Parts reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Advance Auto Parts Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.79B | 29.01 | 12.82% | ― | 9.24% | 35.68% | |
67 Neutral | $3.68B | 9.73 | 18.07% | 1.04% | -0.65% | -10.35% | |
63 Neutral | $15.27B | 259.07 | 1.44% | 3.33% | 3.26% | -25.41% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $3.69B | 7.11 | -44.22% | 4.16% | -1.04% | -20.88% | |
51 Neutral | $1.98B | 69.37 | 3.47% | ― | -1.58% | 85.04% | |
50 Neutral | $3.39B | 52.94 | 2.00% | 2.53% | -19.41% | -957.94% |
* Consumer Cyclical Sector Average
AAP
Advance Auto Parts
56.01
24.25
76.34%
GPC
Genuine Parts Company
109.90
-0.75
-0.68%
BBWI
Bath & Body Works
18.30
-8.37
-31.38%
EYE
National Vision Holdings
25.37
13.71
117.58%
RVLV
Revolve Group
25.08
4.96
24.65%
ASO
Academy Sports and Outdoors
58.53
22.16
60.92%
Advance Auto Parts Corporate Events
Business Operations and StrategyExecutive/Board Changes
Advance Auto Parts Adds Cynthia Jamison to Board
Positive
Mar 11, 2026
On March 9, 2026, Advance Auto Parts appointed Cynthia T. Jamison as an independent director to its Board of Directors, with the announcement publicly released on March 10, 2026. Jamison will be compensated under the company’s standard polic...
Business Operations and StrategyExecutive/Board Changes
Advance Auto Parts Adds Veteran Retail Leader to Board
Positive
Jan 13, 2026
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, formal...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.