Valvoline (VVV) AI Stock Analysis

• Market Cap: $5.00B
• Dividend Yield: N/A
• Average Volume (3M): 1.66M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.82
• Revenue Growth: 7.53%
• EPS Growth: 74.04%
• Country: US
• Employees: 10,500
• Sector: Consumer Cyclical
• Sector Strength: 81
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 0.47
• Shares Outstanding: 127,114,820
• 10 Day Avg. Volume: 1,501,469
• 30 Day Avg. Volume: 1,661,810
• PEG Ratio: -0.32
• Price to Book (P/B): 29.34
• Price to Sales (P/S): 3.36
• P/FCF Ratio: 133.78
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 3.65
• Enterprise Value/Gross Profit: 9.49
• Enterprise Value/Ebitda: 10.89
• 1Y Price Target: $44.33
• Price Target Upside: 12.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 77 Outperform
• Price Target: $45.00 ▲(14.30% Upside)

Valvoline's strong financial performance, positive technical indicators, and optimistic earnings call contribute to a favorable stock outlook. The company's high leverage and moderate valuation slightly temper the overall score. Continued focus on reducing debt and maintaining operational efficiency will be key to sustaining growth.

Positive Factors

Revenue Growth

Consistent revenue growth demonstrates expanding market reach and product adoption, supporting long-term business sustainability.

Store Expansion

Effective network growth through new store additions enhances market presence and potential revenue streams, strengthening competitive positioning.

Cash Flow Improvement

Significant improvement in cash flow generation enhances financial flexibility, enabling strategic investments and debt reduction.

Negative Factors

High Leverage

High leverage poses risks to financial stability, potentially limiting the company's ability to invest in growth opportunities and weather economic downturns.

SG&A Cost Increase

Rising SG&A costs can pressure margins and profitability, potentially impacting long-term financial performance if not managed effectively.

Merger Uncertainty

Regulatory scrutiny and delays in the Breeze transaction could hinder strategic growth plans and create uncertainty in future business operations.

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 generates revenue primarily through the sale of its lubricants and automotive products across its Consumer Products and Quick Lubes segments. The Consumer Products segment includes retail sales of motor oils and automotive chemicals through various distribution channels, including mass retailers, automotive supply stores, and online platforms. The Quick Lubes segment consists of revenue from its Valvoline Instant Oil Change service centers, which offer oil changes and other automotive maintenance services. Key revenue streams include product sales, service fees from oil changes, and franchise fees from its network of oil change centers. Additionally, Valvoline benefits from strategic partnerships with automotive manufacturers and retailers, enhancing its distribution and brand presence in the market.

Valvoline Financial Statement Overview

Summary

Valvoline's financials show 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.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.69B	1.62B	1.44B	1.24B	1.04B	727.00M
Gross Profit	651.30M	618.80M	544.50M	476.40M	432.30M	301.00M
EBITDA	567.10M	367.20M	363.60M	284.70M	430.40M	591.00M
Net Income	234.60M	211.50M	1.42B	424.30M	420.30M	316.60M
Balance Sheet
Total Assets	2.56B	2.44B	2.89B	3.42B	3.19B	3.05B
Cash, Cash Equivalents and Short-Term Investments	68.30M	68.30M	756.60M	23.40M	122.60M	760.00M
Total Debt	1.39B	1.63B	1.83B	1.92B	1.86B	2.19B
Total Liabilities	2.25B	2.25B	2.69B	3.11B	3.06B	3.13B
Stockholders Equity	313.60M	185.60M	203.20M	306.60M	134.50M	-76.00M
Cash Flow
Free Cash Flow	44.90M	40.70M	-221.30M	152.20M	300.80M	277.70M
Operating Cash Flow	276.60M	265.10M	-40.80M	284.20M	403.90M	371.70M
Investing Cash Flow	-96.50M	136.80M	2.04B	-207.60M	-399.90M	-222.60M
Financing Cash Flow	-177.50M	-746.30M	-1.67B	-218.90M	-535.50M	450.30M

Valvoline Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.37
• 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 VVV, the sentiment is Positive. The current price of 39.37 is above the 20-day moving average (MA) of 39.25, above the 50-day MA of 38.08, and above the 200-day MA of 36.64, indicating a bullish trend. The MACD of 0.43 indicates Positive momentum. The RSI at 55.69 is Neutral, neither overbought nor oversold. The STOCH value of 84.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VVV.

Valvoline Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VVV	77 Outperform	$5.00B	18.31	132.49%	―	7.53%	74.04%
VLO	73 Outperform	$49.24B	65.72	3.07%	2.81%	-11.72%	-86.21%
PSX	69 Neutral	$52.62B	31.34	6.00%	3.58%	-12.80%	-64.40%
SUN	66 Neutral	$7.73B	24.82	6.62%	7.06%	-8.65%	-73.25%
DINO	65 Neutral	$9.56B	35.13	-0.93%	3.91%	-14.58%	-107.50%
MPC	65 Neutral	$55.24B	26.92	11.24%	2.00%	-10.03%	-64.63%
Sector *	61 Neutral	$17.83B	12.89	-1.60%	3.03%	1.39%	-14.45%

Valvoline Corporate Events

Valvoline Extends Merger Termination Date Amid Scrutiny

On February 17, 2025, Valvoline Inc. entered into a merger agreement with OC IntermediateCo, a subsidiary of HoldCo, to acquire the Breeze Autocare business. The merger process faced scrutiny from the U.S. Federal Trade Commission, leading to a request for additional information on April 9, 2025. To accommodate this, Valvoline and its partners extended the merger’s termination date to November 15, 2025, or the date of closing, whichever is later, to ensure all conditions are met.

Valvoline Reports Strong Q3 2025 Financial Results

On August 6, 2025, Valvoline Inc. reported its third-quarter results for the period ending June 30, 2025, showcasing a 4% increase in sales to $439 million and a significant profit growth, with income from continuing operations rising by 18%. The company added 46 new stores, contributing to a 10% growth in system-wide store sales. Despite a decrease in miles driven and a slow start to summer holidays, Valvoline demonstrated resilience with positive same-store sales growth. The company also updated its fiscal 2025 guidance, reflecting strong performance expectations and long-term shareholder value.