Valvoline (VVV) AI Stock Analysis

• Market Cap: $4.45B
• Dividend Yield: N/A
• Average Volume (3M): 1.80M
• Price to Earnings (P/E): 17.0
• Beta (1Y): 0.80
• Revenue Growth: 9.56%
• EPS Growth: 64.10%
• Country: US
• Employees: 10,500
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 0.34
• Shares Outstanding: 127,111,680
• 10 Day Avg. Volume: 1,747,813
• 30 Day Avg. Volume: 1,798,434
• PEG Ratio: -3.28
• Price to Book (P/B): 19.29
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 210.49
• Enterprise Value/Market Cap: 1.36
• Enterprise Value/Revenue: 0.93
• Enterprise Value/Gross Profit: 9.45
• Enterprise Value/Ebitda: 2.99
• 1Y Price Target: $43.60
• Price Target Upside: 23.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 71 Outperform
• Price Target: $39.00 ▲(10.64%Upside)

Valvoline's strong financial performance and positive earnings call insights are key strengths. Technical indicators suggest cautious sentiment, while reasonable valuation and strategic corporate events support moderate confidence in future prospects.

Positive Factors

Company Operations

Valvoline's shares are gaining momentum after a positive intra-quarter HQ visit and catch-up call, indicating favorable developments.

Growth Potential

Valvoline has room for further expansion into attractive markets, with overall market growth suggesting long-term secular tailwinds.

Market Position

Analyst's Buy rating reflects the view that Valvoline is a best-in-class operator in a highly-fragmented market benefiting from non-discretionary, needs-based demand.

Negative Factors

Financial Performance

Margins came in softer and will remain pressured, with adjusted EBITDA margin missing expectations and showing a year-over-year decline.

Investor Sentiment

Short interest in VVV is ticking up to 8%, indicating growing skepticism among some investors.

Market Challenges

Uncertainty around gross margin due to crude oil volatility and competitive concerns is contributing to increased short interest.

Valvoline Business Overview & Revenue Model

Company Description

Valvoline Inc. manufactures, markets, and supplies, engine and automotive maintenance products and services. It operates through two segments, Retail Services and Global Products. The company offers lubricants for passenger car, light duty, and heavy duty; antifreeze/coolants for original equipment manufacturers; functional and maintenance chemicals, such as brake fluids and power steering fluids, as well as specialty coatings for automotive and industrial applications; and oil and air filters for light-duty vehicles. It also provides batteries, windshield wiper blades, light bulbs, serpentine belts, and drain plugs. In addition, the company operates Valvoline instant oil change service centers. As of September 30, 2021, it operated and franchised approximately 1,594 quick-lube locations under the Valvoline Instant Oil Change brand in the United States and the Great Canadian Oil Change brand in Canada. The company also serves car dealers, general repair shops, and third-party quick lube locations, as well as through distributors and licensees. It has operations in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company was founded in 1866 and is headquartered in Lexington, Kentucky.

How the Company Makes Money

Valvoline makes money through multiple revenue streams, primarily from the sale of lubricants and related automotive products. The company operates a network of quick-lube service centers, branded as Valvoline Instant Oil Change, which provides oil change and preventive maintenance services. Revenue is generated through direct sales to consumers at these service locations as well as through retail and wholesale distribution channels where Valvoline products are sold to do-it-yourself consumers and professional installers. Additionally, Valvoline engages in strategic partnerships with automotive service providers and retailers to expand its market presence and drive sales growth.

Valvoline Financial Statement Overview

Summary

Valvoline's financials reflect strong revenue and profit growth, supported by efficient operations and robust profitability margins. However, high leverage and limited equity buffer pose potential risks, while free cash flow constraints may impact flexibility. Overall, the company demonstrates solid financial health with areas for improvement in balance sheet resilience and cash flow optimization.

Income Statement

Valvoline exhibits a strong income statement with consistent revenue growth reaching 1674 million in TTM (Trailing-Twelve-Months), a significant increase from 1619 million in the previous year. Gross profit margin stands at 38.3%, indicating efficient cost management. The net profit margin improved to 13.4% in TTM, showcasing enhanced profitability. EBIT and EBITDA margins are robust at 26.2% and 33.4%, respectively, reflecting strong operational efficiency.

Balance Sheet

The balance sheet indicates moderate leverage with a debt-to-equity ratio of 5.51 as of TTM, which is high but common in the industry. Return on equity is solid at 90.1%, highlighting effective use of equity to generate profits. However, the equity ratio is relatively low at 10.1%, suggesting limited equity buffer against liabilities.

Cash Flow

Cash flows are stable with an operating cash flow to net income ratio of 1.18, indicating strong cash generation relative to profits. However, free cash flow growth is negative, decreasing from 40.7 million to 22.7 million in TTM, driven by increased capital expenditures. The free cash flow to net income ratio is low at 0.10, suggesting limited free cash availability for debt servicing and investments.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	1.62B	1.44B	1.24B	1.04B	727.00M
Gross Profit	618.80M	544.50M	476.40M	432.30M	301.00M
EBITDA	367.20M	363.60M	284.70M	430.40M	591.00M
Net Income	211.50M	1.42B	424.30M	420.30M	316.60M
Balance Sheet
Total Assets	2.44B	2.89B	3.42B	3.19B	3.05B
Cash, Cash Equivalents and Short-Term Investments	68.30M	756.60M	23.40M	122.60M	760.00M
Total Debt	1.37B	1.83B	1.92B	1.86B	2.19B
Total Liabilities	2.25B	2.69B	3.11B	3.06B	3.13B
Stockholders Equity	185.60M	203.20M	306.60M	134.50M	-76.00M
Cash Flow
Free Cash Flow	40.70M	-221.30M	152.20M	300.80M	277.70M
Operating Cash Flow	265.10M	-40.80M	284.20M	403.90M	371.70M
Investing Cash Flow	136.80M	2.04B	-207.60M	-399.90M	-222.60M
Financing Cash Flow	-746.30M	-1.67B	-218.90M	-535.50M	450.30M

Valvoline Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 35.25
• 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 VVV, the sentiment is Negative. The current price of 35.25 is below the 20-day moving average (MA) of 37.10, below the 50-day MA of 36.55, and below the 200-day MA of 37.06, indicating a bearish trend. The MACD of -0.45 indicates Positive momentum. The RSI at 40.16 is Neutral, neither overbought nor oversold. The STOCH value of 11.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VVV.

Valvoline Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UGP	72 Outperform	$3.34B	8.43	14.87%	4.01%	-4.58%	-23.80%
VVV	71 Outperform	$4.45B	16.99	174.55%	―	9.56%	64.10%
DINO	70 Outperform	$8.28B	35.13	-0.93%	4.72%	-14.58%	-107.33%
Sector *	62 Neutral	$16.51B	10.46	-8.28%	3.32%	1.44%	-22.58%
CSAN	57 Neutral	$1.98B	5.14	-69.81%	7.43%	-2.76%	-628.74%
CVI	52 Neutral	$2.69B	268.82	-50.65%	10.31%	-15.98%	-160.88%
PBF	49 Neutral	$2.61B	―	-17.30%	4.76%	-18.73%	-236.79%

Valvoline Corporate Events

Valvoline Appoints New CFO Amidst Financial Growth

On May 8, 2025, Valvoline announced the appointment of J. Kevin Willis as the new Chief Financial Officer, effective May 19, 2025, succeeding Mary E. Meixelsperger, who is retiring. The company also reported its second-quarter financial results, with a 4% increase in sales to $403 million and system-wide store sales growth of 11%. Despite a decline in income from continuing operations and EPS, Valvoline remains optimistic about its growth prospects, including the acquisition of Breeze Autocare to accelerate growth and earnings potential.