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Advance Auto Parts
(NYSE:AAP)
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Rating:58Neutral
Price Target:
$61.00
▲(6.11% Upside)
Action:Reiterated
Date:05/23/26
The score is held back primarily by weak cash flow and a leveraged balance sheet despite improving revenue and margins. Offsetting this, the latest earnings call reinforced a credible near-term margin improvement plan with reaffirmed guidance, and the stock’s trend is generally positive above key moving averages, though momentum signals are not fully supportive. Valuation is only partially assessable due to the unavailable/meaningless P/E input.
Positive Factors
Revenue & Gross Margin Recovery
A durable top-line rebound and materially improved gross margins indicate sustained pricing/mix recovery and operational execution. Higher gross margin provides structural room to absorb SG&A and fund reinvestment, supporting lasting earnings power if maintained across cycles.
Negative Factors
Negative Free Cash Flow
Persistent negative free cash flow constrains the company's ability to self-fund growth and deleveraging. Ongoing cash burn increases dependence on balance sheet liquidity or external financing, making recovery outcomes more execution-dependent and sensitive to demand volatility.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue & Gross Margin Recovery
A durable top-line rebound and materially improved gross margins indicate sustained pricing/mix recovery and operational execution. Higher gross margin provides structural room to absorb SG&A and fund reinvestment, supporting lasting earnings power if maintained across cycles.
Read all positive factors
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 (AAP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.71B
Dividend Yield2.53%
Average Volume (3M)2.29M
Price to Earnings (P/E)83.9
Beta (1Y)0.73
Revenue Growth-8.26%
EPS GrowthN/A
CountryUS
Employees33,200
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.73
Shares Outstanding60,300,000
10 Day Avg. Volume1,610,630
30 Day Avg. Volume2,288,587
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 Cap1.56
Enterprise Value/Revenue0.67
Enterprise Value/Gross Profit1.52
Enterprise Value/Ebitda11.35
Forecast
1Y Price Target
$60.13Price Target Upside4.60% Upside
Rating ConsensusHold
Number of Analyst Covering18
EPS Forecast (FY)2.92
Revenue Forecast (FY)$8.58B
Advance Auto Parts Business Overview & Revenue Model
Company Description
Advance Auto Parts, Inc. operates as a leading retailer and supplier of a comprehensive array of automotive replacement components, accessories, batteries, and essential maintenance supplies. Its extensive inventory caters to a wide spectrum of ve...
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 Earnings Call Summary
Earnings Call Date:May 21, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 25, 2026
Earnings Call Sentiment Positive
The call conveyed constructive operational momentum and a clear path to improved profitability: comparable sales accelerated (3.5% in Q1), gross margin and adjusted operating margin expanded materially, EPS turned positive, and strategic initiatives (ARGOS brand, Advance Rewards, assortment framework, market hubs, DC standardization) are showing early traction. Management reaffirmed full-year guidance and maintained a strong cash and leverage position. Key risks include modest top-line growth, near-term consumer pressure (inflation and elevated gas prices), temporary headwinds from national Pro account optimization, and the fact that significant supply chain productivity benefits are expected in 2027 and beyond. Overall, positive execution on merchandising and service improvements appears to outweigh the near-term uncertainties.Positive Updates
Comparable Sales Growth — Best in Five Years
Comparable sales grew 3.5% in Q1 — the company's strongest quarter of growth in five years, driven primarily by the Pro channel (mid-single-digit monthly growth) and a rebound in DIY (low single-digit growth).
Negative Updates
Modest Top-Line Growth
Net sales growth was modest at only +1% year-over-year despite a stronger comp; full-year comparable sales guidance is only +1% to +2%, reflecting cautious outlook amid consumer pressure.
Read all updates
Q1-2026 Updates
Positive
Negative
Comparable Sales Growth — Best in Five Years
Comparable sales grew 3.5% in Q1 — the company's strongest quarter of growth in five years, driven primarily by the Pro channel (mid-single-digit monthly growth) and a rebound in DIY (low single-digit growth).
Read all positive updates
Company Guidance
Management reaffirmed full‑year 2026 guidance calling for about $8.5 billion of net sales with comparable‑store sales growth of 1%–2% (each quarter positive, first half stronger), same‑SKU inflation of 2%–3%, adjusted operating income margin of 3.8%–4.5% (130–200 bps YoY improvement) and gross margin expansion of 110–150 bps to roughly 45%, driving adjusted diluted EPS of $2.40–$3.10; they expect reported SG&A to provide 20–50 bps of leverage (adjusted SG&A up low single digits excluding ~$90M of 2025 nonrecurring items), capex of ~ $300M, 40–45 new stores and 10–15 market hubs, and full‑year free cash flow of ~ $100M (Q1 outflow was $75M). Balance sheet targets include about $3.0 billion of cash and net debt leverage near 2.4x (target 2.0–2.5x). Management noted Q2/Q3 are seasonally higher margin periods (with Q2 comps expected to moderate from Q1), gross margin to finish around ~45% (mix pressure in Q4), merchandising as the primary near‑term margin driver, and supply‑chain productivity contributing more meaningfully in 2027 and beyond.Advance Auto Parts Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
34
Negative
Cash Flow
22
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.63B | 8.60B | 9.09B | 9.21B | 9.15B | 11.00B |
| Gross Profit | 3.80B | 3.73B | 3.41B | 3.86B | 4.23B | 4.92B |
| EBITDA | 509.00M | 320.00M | -395.00M | 310.00M | 759.36M | 1.08B |
| Net Income | 44.00M | 44.00M | -336.00M | 30.00M | 464.40M | 596.62M |
Balance Sheet | ||||||
| Total Assets | 11.80B | 11.83B | 10.80B | 12.28B | 11.99B | 12.19B |
| Cash, Cash Equivalents and Short-Term Investments | 2.96B | 3.12B | 1.87B | 488.05M | 270.81M | 601.43M |
| Total Debt | 5.23B | 5.22B | 3.69B | 3.83B | 3.65B | 3.37B |
| Total Liabilities | 9.59B | 9.63B | 8.63B | 9.76B | 9.39B | 9.07B |
| Stockholders Equity | 2.21B | 2.20B | 2.17B | 2.52B | 2.60B | 3.13B |
Cash Flow | ||||||
| Free Cash Flow | -175.00M | -298.00M | -96.17M | 61.70M | 335.91M | 817.38M |
| Operating Cash Flow | 91.00M | -46.00M | 84.63M | 287.38M | 736.57M | 1.11B |
| Investing Cash Flow | -324.00M | -239.00M | 1.35B | -235.49M | -424.45M | -287.31M |
| Financing Cash Flow | 1.52B | 1.54B | -75.01M | 189.27M | -620.70M | -1.06B |
Advance Auto Parts Technical Analysis
Positive
57.49
Price Trends
57.32
Positive
55.40
Positive
52.56
Positive
Market Momentum
1.32
Negative
56.31
Neutral
89.93
Negative
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 57.49 is below the 20-day moving average (MA) of 59.47, above the 50-day MA of 57.32, and above the 200-day MA of 52.56, indicating a bullish trend. The MACD of 1.32 indicates Negative momentum. The RSI at 56.31 is Neutral, neither overbought nor oversold. The STOCH value of 89.93 is Negative, 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.62B | 25.13 | 12.85% | ― | 10.02% | 26.46% | |
65 Neutral | $2.97B | 8.25 | 18.01% | 1.04% | 3.77% | 4.71% | |
63 Neutral | $4.43B | 6.33 | -52.38% | 4.16% | -1.40% | -4.34% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $3.71B | 83.91 | 2.00% | 2.53% | -8.26% | ― | |
58 Neutral | $1.58B | 33.81 | 5.36% | ― | 9.20% | ― | |
51 Neutral | $18.24B | 301.30 | 1.31% | 3.33% | 4.79% | -92.77% |
* Consumer Cyclical Sector Average
AAP
Advance Auto Parts
61.53
8.36
15.72%
GPC
Genuine Parts Company
132.57
11.38
9.39%
BBWI
Bath & Body Works
21.96
-9.58
-30.38%
EYE
National Vision Holdings
19.76
-3.57
-15.30%
RVLV
Revolve Group
22.62
2.25
11.05%
ASO
Academy Sports and Outdoors
47.84
0.56
1.19%
Advance Auto Parts Corporate Events
Executive/Board ChangesShareholder Meetings
Advance Auto Parts Shareholders Approve Directors and Governance Matters
Positive
May 22, 2026
Advance Auto Parts, Inc. held its 2026 Annual Meeting of Stockholders on May 20, 2026, where shareholders voted on board elections, executive pay and auditor ratification. All 10 director nominees, including CEO Shane M. O’Kelly and other in...
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...
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.