NYSE:AAP

Stock Analysis Report

Executive Summary

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.

Snowflake

Fundamentals

Flawless balance sheet with limited growth.


Similar Companies

Share Price & News

How has Advance Auto Parts's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

3.1%

AAP

3.9%

US Specialty Retail

1.8%

US Market


1 Year Return

-0.5%

AAP

7.1%

US Specialty Retail

7.3%

US Market

Return vs Industry: AAP underperformed the US Specialty Retail industry which returned 7.1% over the past year.

Return vs Market: AAP underperformed the US Market which returned 7.3% over the past year.


Shareholder returns

AAPIndustryMarket
7 Day3.1%3.9%1.8%
30 Day6.3%3.0%-0.7%
90 Day4.2%4.7%0.06%
1 Year-0.4%-0.5%8.9%7.1%9.7%7.3%
3 Year15.8%15.2%43.0%35.7%46.3%36.9%
5 Year16.1%15.1%57.7%43.8%64.5%46.5%

Price Volatility Vs. Market

How volatile is Advance Auto Parts's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Advance Auto Parts undervalued compared to its fair value and its price relative to the market?

27.19x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: AAP ($163.75) is trading above our estimate of fair value ($131.45)

Significantly Undervalued: AAP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: AAP is poor value based on its PE Ratio (27.2x) compared to the Specialty Retail industry average (15.2x).

PE vs Market: AAP is poor value based on its PE Ratio (27.2x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: AAP is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: AAP is overvalued based on its PB Ratio (3.2x) compared to the US Specialty Retail industry average (1.3x).


Next Steps

Future Growth

How is Advance Auto Parts forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

17.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AAP's forecast earnings growth (17.6% per year) is above the savings rate (2.7%).

Earnings vs Market: AAP's earnings (17.6% per year) are forecast to grow faster than the US market (14.6% per year).

High Growth Earnings: AAP's earnings are forecast to grow, but not significantly.

Revenue vs Market: AAP's revenue (2.2% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: AAP's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: AAP's Return on Equity is forecast to be low in 3 years time (15.4%).


Next Steps

Past Performance

How has Advance Auto Parts performed over the past 5 years?

-0.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: AAP's earnings have declined by -0.9% per year over the past 5 years.

Accelerating Growth: AAP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AAP had negative earnings growth (-18.3%) over the past year, making it difficult to compare to the Specialty Retail industry average (8.3%).


Return on Equity

High ROE: AAP's Return on Equity (11.9%) is considered low.


Return on Assets

ROA vs Industry: AAP's Return on Assets is below or equal to the Specialty Retail industry average last year.


Return on Capital Employed

ROCE Improving: AAP's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Advance Auto Parts's financial position?


Financial Position Analysis

Short Term Liabilities: AAP's short term assets ($6.0B) exceeds its short term liabilities ($4.4B)

Long Term Liabilities: AAP's short term assets (6.0B) exceeds its long term liabilities (3.2B)


Debt to Equity History and Analysis

Debt Level: AAP's debt to equity ratio (20.3%) is considered satisfactory

Reducing Debt: AAP's debt to equity ratio has reduced from 102.7% to 20.3% over the past 5 years.

Debt Coverage: AAP's debt is well covered by operating cash flow (115%).

Interest Coverage: AAP's interest payments on its debt are well covered by EBIT (14.4x coverage).


Balance Sheet

Inventory Level: AAP has a high level of physical assets or inventory.

Debt Coverage by Assets: AAP's debt is covered by short term assets (assets are 7.982410x debt).


Next Steps

Dividend

What is Advance Auto Parts's current dividend yield, its reliability and sustainability?

0.15%

Current Dividend Yield


Dividend Yield vs Market

company0.1%marketbottom25%1.5%markettop25%3.7%industryaverage2.0%forecastin3Years0.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: AAP's dividend (0.15%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: AAP's dividend (0.15%) is low compared to the top 25% of dividend payers in the US market (3.72%).

Stable Dividend: AAP is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: AAP is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: AAP is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AAP's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Advance Auto Parts's salary, the management and board of directors tenure and is there insider trading?

1.9yrs

Average management tenure


CEO

Tom Greco (61yo)

3.5yrs

Tenure

US$8,856,135

Compensation

Mr. Thomas R. Greco, also known as Tom, has been the Chief Executive Officer of Advance Auto Parts, Inc. since April 11, 2016 and has been its President since August 14, 2016. Mr. Greco served as the Chief ...


CEO Compensation Analysis

Compensation vs. Market: Tom's total compensation ($USD8.86M) is about average for companies of similar size in the US market ($USD11.21M).

Compensation vs Earnings: Tom's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

1.9yrs

Average Tenure

54yo

Average Age

Experienced Management: AAP's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Age and Tenure

3.5yrs

Average Tenure

59yo

Average Age

Experienced Board: AAP's board of directors are considered experienced (3.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$186,06619 Nov 18
Fiona Dias
EntityIndividual
Shares1,048
Max PriceUS$177.54

Ownership Breakdown


Management Team

  • Reuben Slone (56yo)

    Executive Vice President of Supply Chain

    • Tenure: 1yrs
    • Compensation: US$2.19m
  • Carlos Saladrigas (70yo)

    Co-Founder and Chief Executive Officer of Regis HR

    • Tenure: 0yrs
  • Tom Greco (61yo)

    President

    • Tenure: 3.5yrs
    • Compensation: US$8.86m
  • Bob Cushing (65yo)

    Executive Vice President of Professional

    • Tenure: 0yrs
    • Compensation: US$1.89m
  • Tammy Finley (52yo)

    Executive VP

    • Tenure: 4.8yrs
    • Compensation: US$1.02m
  • Mike Broderick (50yo)

    Executive VP of Merchandising & Store Operations Support

    • Tenure: 2.3yrs
    • Compensation: US$1.73m
  • Jeff Shepherd (46yo)

    Executive VP & CFO

    • Tenure: 1.5yrs
    • Compensation: US$1.97m
  • Prabhakar Vaidyanathan

    VP of Finance & Investor Relations and Corporate Treasurer

    • Tenure: 2.3yrs
  • - Donthi

    Executive VP & CTO

    • Tenure: 1.5yrs
  • Andrew Page (49yo)

    Senior VP

    • Tenure: 0.4yrs

Board Members

  • Nigel Travis (69yo)

    Director

    • Tenure: 1.2yrs
    • Compensation: US$122.22k
  • Doug Pertz (65yo)

    • Tenure: 1.8yrs
    • Compensation: US$197.50k
  • Gene Lee (57yo)

    Independent Director

    • Tenure: 3.9yrs
    • Compensation: US$240.00k
  • John Bergstrom (73yo)

    Independent Director

    • Tenure: 11.4yrs
    • Compensation: US$255.00k
  • Brad Buss (55yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: US$260.00k
  • John Ferraro (63yo)

    Independent Director

    • Tenure: 4.7yrs
    • Compensation: US$250.00k
  • Jeff Smith (47yo)

    Independent Chairman

    • Tenure: 3.4yrs
    • Compensation: US$340.00k
  • Jeff Jones (51yo)

    Independent Director

    • Tenure: 0.7yrs
  • Tom Greco (61yo)

    President

    • Tenure: 3.5yrs
    • Compensation: US$8.86m
  • Andi Karaboutis (56yo)

    Independent Director

    • Tenure: 4.7yrs
    • Compensation: US$240.00k

Company Information

Advance Auto Parts, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Advance Auto Parts, Inc.
  • Ticker: AAP
  • Exchange: NYSE
  • Founded: 1929
  • Industry: Automotive Retail
  • Sector: Retail
  • Market Cap: US$11.605b
  • Shares outstanding: 70.98m
  • Website: https://www.advanceautoparts.com

Number of Employees


Location

  • Advance Auto Parts, Inc.
  • 2635 East Millbrook Road
  • Raleigh
  • North Carolina
  • 27604
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AAPNYSE (New York Stock Exchange)YesCommon SharesUSUSDNov 2001
AWNDB (Deutsche Boerse AG)YesCommon SharesDEEURNov 2001
0H9GLSE (London Stock Exchange)YesCommon SharesGBUSDNov 2001
AAP *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNNov 2001

Biography

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.  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 23:31
End of Day Share Price2019/10/18 00:00
Earnings2019/07/13
Annual Earnings2018/12/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.