Last Updated: 16 Sep 2024
Executive Summary
Advance Auto Parts Inc. (AAP) is a leading automotive aftermarket parts provider with a market capitalization of $24.72 billion. Despite facing challenges in the current economic environment, the company's strong fundamentals and growth potential make it an attractive investment opportunity.
Company Overview
Advance Auto Parts serves both professional installers and do-it-yourself (DIY) customers with a wide range of automotive parts and accessories. The company operates over 4,900 stores in the United States, Canada, and Puerto Rico. Advance Auto Parts also has a strong e-commerce presence, offering a convenient shopping experience for customers.
Fundamental Analysis
Revenue: AAP's revenue for the trailing twelve months (TTM) was $11.27 billion, showing a slight decline of 0.001% year-over-year.
Earnings: The company reported a diluted EPS of -$0.21 for the TTM, indicating a significant loss.
Profitability: Advance Auto Parts has a low profit margin of -0.0011% and an operating margin of 0.0267% TTM.
Valuation: AAP is currently trading at a forward PE ratio of 12.36, which is below the industry average. The company's price-to-sales ratio of 0.219 is also attractive.
Technical Analysis
Price Action: AAP's stock price has been trending downwards in recent months. The stock is currently trading below its 50-day and 200-day moving averages.
Support and Resistance: The stock has strong support at $37.51, which represents the 52-week low. Resistance is present at $52.74, which is the analyst target price.
Short Term Outlook
In the short term, AAP's stock price is likely to remain under pressure due to the challenging economic environment. The company's weak earnings and low profitability are also concerns. However, the stock's attractive valuation and analyst target price suggest that there is potential for a rebound.
Long Term Outlook
Advance Auto Parts has a strong brand and a loyal customer base. The company is also well-positioned to benefit from the growing demand for automotive parts and accessories. Over the long term, AAP's stock price is expected to appreciate as the company recovers from its current challenges.
Analyst Recommendations
Analysts have a mixed view on AAP's stock. One analyst has a strong buy rating, while 24 have a hold rating. Three analysts have a sell rating, and one has a strong sell rating. The average analyst target price is $52.74.
