AAP

Advance Auto Parts

Fundamental data last updated:April 13, 2026

company profile

SECTOR

Consumer Cyclical

industry

Auto Parts

Exchange

NYSE

County of HQ

United States

Next Earnings Date

05/28/26

Business Summary

Advance Auto Parts generates cash by distributing automotive replacement parts and accessories through a large retail and commercial footprint, monetizing the non-discretionary nature of vehicle maintenance. Its moat is built on distribution density, inventory breadth, and relationships with professional repair shops that rely on rapid parts availability. Scale purchasing and private-label offerings can enhance gross margin, while store proximity reduces downtime for mechanics, creating sticky commercial demand. Cash flow ultimately depends on inventory turns and working capital discipline, where even small improvements in margin or ROIC can materially impact shareholder returns given the low operating margin base.

VALUATION

P/E

48.3

Market Cap ($M USD)

$3,308

Forward P/E

13.9

PEG

1.9

PRICE TO SALES

0.4

PRICE TO BOOK

1.5

EV / EBITDA

16.9

5-Year Average P/E

DIVIDEND

Yield

1.80%

Annual Payout

$1.00

Payout Ratio

137.00%

Consecutive Years of Dividend Growth

0

5-Year Dividend Growth Rate

0.00%

Financial Health & Profitability

Earnings Per Share

$1.13

Next Year EPS Growth Estimate

$3.93

Next Year Revenue Growth Estimate

2.50%

Return on Equity (ROE)

2.00%

Operating Margin

1.90%

Debt-to-Equity

2.4

Piotroski F-Score

4

Altman Z-Score

1.8

Return on Invested Capital (ROIC)

1.90%%

Current Ratio

1.8

Quick Ratio

Gainseekers Quantitative Analysis

Summary

Advance Auto Parts screens as a statistically cheap but fundamentally fragile turnaround. A Forward P/E of 13.9 versus a trailing P/E of 48.3 implies a dramatic earnings reset, yet the PEG Forward of 1.9 suggests the growth embedded in that multiple is not exactly cheap relative to expectations. The Altman Z-Score of 1.8 places the company in financial distress territory, and when paired with a thin 2.00% operating margin and 2.50% ROE, this is not a high-quality compounder but a balance-sheet-sensitive retailer fighting for stability. The market is not obviously mispricing hyper-growth; it is pricing in operational risk with cautious optimism about earnings normalization.

AI Exposure / Tech Reliance

As an auto parts retailer in the Consumer Cyclical sector, AAP’s exposure to AI is indirect but relevant through supply chain automation, inventory optimization, and predictive demand analytics. The industry’s resilience hinges on vehicle parc aging and repair cycles rather than breakthrough AI innovation, which gives it defensive characteristics but limited technological upside. Tech adoption can improve margins, but with operating margin at 2.00%, execution must materially improve to create real leverage.

The Bull Case

A value-oriented or GARP investor could argue the compression from a 48.3 P/E to a 13.9 Forward P/E signals an earnings trough and potential normalization story. Price/Sales at 0.4 and Price/Book at 1.5 suggest the equity is not expensive relative to its asset base or revenue footprint, while a 2.4 TTM yield offers tangible return during a recovery phase. The Piotroski F-Score of 4 is neutral but not catastrophic, and a current ratio of 1.8 indicates adequate short-term liquidity. If management can lift ROIC from 1.90% and stabilize operating margin above 2.00%, even modest operational improvements could drive disproportionate equity upside given the depressed multiple base and $3,308M market cap.

The Bear Case

The bear case is far more structural than cyclical. Debt/Equity at 1.90% combined with an Altman Z-Score of 1.8 signals balance sheet fragility, and a 2.50% ROE with 1.90% ROIC indicates capital is barely productive. A PEG Forward of 1.9 undermines the idea of a true growth bargain, and EPS Next Year estimated at $1.13 versus current EPS of 16.9 introduces earnings volatility that erodes confidence in forecast visibility. Operating margin at 2.00% leaves no buffer against cost inflation or competitive pricing pressure, and a Piotroski F-Score of 4 reflects middling financial strength rather than a robust turnaround foundation.

Market Sentiment & Smart Money

Short Interest %

29.50%

Analyst Consensus

2.89

Average Analyst Price Target

$57.75

Institutional Ownership %

126.50%

1-Year Beta

1.23

Insider Buying % (6 Mo)

0.80%%

Distance to 52-Week High

78.00%%

Distance to 52-Week Low

179.10%%