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Valvoline Inc (VVV)
NYSE:VVV
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Valvoline (VVV) AI Stock Analysis

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VVV

Valvoline

(NYSE:VVV)

Rating:70Outperform
Price Target:
$40.00
▲(2.88% Upside)
Valvoline's overall stock score is driven by strong financial performance and positive earnings call sentiment, despite high leverage and mixed technical indicators. The company's strategic initiatives and fair valuation further support its investment potential.
Positive Factors
Financial Performance
Better-than-expected GM%/SG&A driving Adj EBITDA +5.2% above Consensus.
Growth Potential
Accelerating franchise unit growth, sustainable share/traffic gains, limited tariff risk, and a likely return to SG&A leverage in FY26.
Negative Factors
Market Sentiment
Short interest in VVV is ticking up to 8%, indicating growing skepticism among some investors.
Operational Uncertainty
The Breeze acquisition remains tied up at the FTC, which is slowing progress.

Valvoline (VVV) vs. SPDR S&P 500 ETF (SPY)

Valvoline Business Overview & Revenue Model

Company DescriptionValvoline 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 MoneyValvoline 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 Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q3-2025)
|
% Change Since: 7.26%|
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
Valvoline's earnings call presented a positive outlook with strong sales and profit growth, successful store expansion, and effective premiumization strategies. However, some challenges such as a slow start to the summer season, increased SG&A costs, and uncertainties with the Breeze transaction were noted. Overall, the highlights significantly outweighed the minor lowlights, leading to a positive sentiment for the earnings call.
Q3-2025 Updates
Positive Updates
Impressive Sales and Profit Growth
System-wide sales increased 10% to $890 million, and adjusted EBITDA grew by 12%, demonstrating strong financial performance for the quarter.
Store Expansion Success
Valvoline added 46 new stores in the quarter, bringing the year-to-date total for gross store additions to 116, indicating effective network growth.
Strong Same-Store Sales
Same-store sales comps increased by 4.9%, with transaction growth in both the same-store and mature store bases contributing to this positive trend.
Premium Product Usage Increase
The percentage of customers using premium products grew both sequentially and year-over-year, highlighting successful premiumization strategies.
Labor Management Improvements
Labor improvements contributed to an 80 basis point increase in gross margin rate, showcasing effective labor management practices.
Positive Financial Drivers
Adjusted EBITDA margin increased 30 basis points to 29.5%, with adjusted net income of $61 million, and adjusted EPS of $0.47 up by 18%.
Negative Updates
Slow Start to Summer
June experienced a slower-than-normal start to the summer holidays, impacting same-store sales growth expectations.
SG&A Increase
SG&A as a percentage of sales increased 80 basis points year-over-year to 18.5%, mainly due to investments in technology infrastructure.
Breeze Transaction Uncertainty
There is uncertainty regarding the timing of the Breeze transaction closure, with potential divestitures required to gain FTC approval.
Franchise Pricing Adjustments
A large franchisee made significant price adjustments, contributing to differences in pricing and impacting same-store sales comparisons.
Company Guidance
In Valvoline's third-quarter earnings call for fiscal 2025, the company reported strong growth across several key metrics, reflecting robust operational performance. System-wide sales experienced a 10% increase, reaching $890 million, while adjusted EBITDA grew by 12%, despite refranchising impacts. Same-store sales comps rose by 4.9%, including an 80 basis point Easter impact, and the company added 46 new stores during the quarter. Valvoline narrowed its full-year same-store sales growth guidance to a range of 5.8% to 6.4%. The gross margin rate expanded by 80 basis points to 40.5%, driven by labor improvements, while SG&A as a percentage of sales rose by 80 basis points to 18.5%, reflecting technology investments. Adjusted EBITDA margin increased by 30 basis points to 29.5%, with adjusted net income reaching $61 million and adjusted EPS climbing 18% to $0.47. The company ended the quarter with $68 million in cash and a leverage ratio of 3.3x. The guidance for the year remains strong, with tightened ranges for sales and EPS, and an increased low end of the adjusted EBITDA range based on year-to-date performance.

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
85
Very Positive
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
60
Neutral
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
75
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.67B1.62B1.44B1.24B1.04B727.00M
Gross Profit641.20M618.80M544.50M476.40M432.30M301.00M
EBITDA558.70M367.20M363.60M284.70M430.40M591.00M
Net Income224.00M211.50M1.42B424.30M420.30M316.60M
Balance Sheet
Total Assets2.45B2.44B2.89B3.42B3.19B3.05B
Cash, Cash Equivalents and Short-Term Investments61.90M68.30M756.60M23.40M122.60M760.00M
Total Debt1.37B1.37B1.83B1.92B1.86B2.19B
Total Liabilities2.20B2.25B2.69B3.11B3.06B3.13B
Stockholders Equity248.70M185.60M203.20M306.60M134.50M-76.00M
Cash Flow
Free Cash Flow22.70M40.70M-221.30M152.20M300.80M277.70M
Operating Cash Flow265.30M265.10M-40.80M284.20M403.90M371.70M
Investing Cash Flow-83.50M136.80M2.04B-207.60M-399.90M-222.60M
Financing Cash Flow-613.10M-746.30M-1.67B-218.90M-535.50M450.30M

Valvoline Technical Analysis

Technical Analysis Sentiment
Positive
Last Price38.88
Price Trends
50DMA
37.42
Positive
100DMA
35.93
Positive
200DMA
36.83
Positive
Market Momentum
MACD
0.70
Negative
RSI
57.94
Neutral
STOCH
64.03
Neutral
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 38.88 is above the 20-day moving average (MA) of 37.43, above the 50-day MA of 37.42, and above the 200-day MA of 36.83, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 57.94 is Neutral, neither overbought nor oversold. The STOCH value of 64.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VVV.

Valvoline Risk Analysis

Valvoline disclosed 26 risk factors in its most recent earnings report. Valvoline 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

Valvoline Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$3.54B7.0518.65%3.73%-6.18%-9.87%
70
Outperform
$8.52B35.13-0.93%4.29%-14.58%-107.50%
70
Outperform
$4.97B18.10132.49%7.53%74.04%
57
Neutral
HK$25.94B4.53-4.73%5.53%-0.79%-51.25%
54
Neutral
$1.84B5.14-83.87%7.38%-5.62%-486.38%
51
Neutral
$2.72B268.82-50.65%9.55%-15.98%-160.88%
50
Neutral
$2.72B-17.30%4.66%-18.73%-236.79%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VVV
Valvoline
38.90
-2.86
-6.85%
CVI
CVR Energy
26.84
2.03
8.18%
DINO
HF Sinclair Corporation
46.05
-0.43
-0.93%
UGP
Ultrapar Participacoes SA
3.29
-0.94
-22.22%
PBF
PBF Energy
22.19
-10.48
-32.08%
CSAN
Cosan
3.81
-6.34
-62.46%

Valvoline Corporate Events

M&A TransactionsRegulatory Filings and Compliance
Valvoline Extends Merger Termination Date Amid Scrutiny
Neutral
Aug 12, 2025

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.

The most recent analyst rating on (VVV) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on Valvoline stock, see the VVV Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Valvoline Reports Strong Q3 2025 Financial Results
Positive
Aug 6, 2025

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.

The most recent analyst rating on (VVV) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on Valvoline stock, see the VVV Stock Forecast page.

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.Date of analysis: Aug 06, 2025