Advance Auto Parts Inc

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AAP : NYSE : Services
$171.28 up 6.60 | 4.00%
Today's Range: 164.41 - 172.87
Avg. Daily Volume: 1,123,700
07/28/16 - 2:50 PM ET

Financial Analysis


ADVANCE AUTO PARTS INC's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. ADVANCE AUTO PARTS INC has very weak liquidity. Currently, the Quick Ratio is 0.19 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 22.47% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)2979.783038.23
EBITDA ($mil)381.72378.48
EBIT ($mil)302.4295.23
Net Income ($mil)158.81148.11


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)103.71123.82
Total Assets ($mil)8438.968146.7
Total Debt ($mil)1230.491610.27
Equity ($mil)2629.142146.59


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin47.9648.62
EBITDA Margin12.8112.45
Operating Margin10.159.72
Sales Turnover1.151.22
Return on Assets5.736.06
Return on Equity18.4123.02
Debt Q1 FY16 Q1 FY15
Current Ratio1.351.29
Debt/Capital0.320.43
Interest Expense18.9421.78
Interest Coverage15.9613.56


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)73.5473.17
Div / share0.060.06
EPS2.142.0
Book value / share35.7529.34
Institutional Own % n/a n/a
Avg Daily Volume1090803.0874329.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 24.35 for the Specialty Retail industry and a value on par with the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 4.59 indicates a significant premium versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 13.96. The current price-to-sales ratio is well below the S&P 500 average and is also below the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
AAP 25.09 Peers 24.35   AAP 18.16 Peers 15.74

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

AAP is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

AAP is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
AAP 18.80 Peers 20.26   AAP 1.12 Peers 2.04

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

AAP is trading at a valuation on par with its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

AAP trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AAP 4.59 Peers 13.96   AAP -2.39 Peers -3.13

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

AAP is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, AAP is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
AAP 1.25 Peers 1.56   AAP -2.37 Peers 8.06

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

AAP is trading at a discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

AAP significantly trails its peers on the basis of sales growth

 

 

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