Advance Auto Parts Inc

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AAP : NYSE : Services
$149.00 -2.01 | -1.33%
Today's Range: 148.69 - 151.34
Avg. Daily Volume: 1,032,500
09/28/16 - 4:02 PM ET

Financial Analysis


ADVANCE AUTO PARTS INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. ADVANCE AUTO PARTS INC has very weak liquidity. Currently, the Quick Ratio is 0.20 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 20.08% 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 Q2 FY16 Q2 FY15
Net Sales ($mil)2256.162370.04
EBITDA ($mil)293.63338.25
EBIT ($mil)233.69275.64
Net Income ($mil)124.6150.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)104.83114.54
Total Assets ($mil)8437.538167.88
Total Debt ($mil)1170.111453.64
Equity ($mil)2748.92289.13


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin47.4348.52
EBITDA Margin13.0114.27
Operating Margin10.3611.63
Sales Turnover1.131.22
Return on Assets5.436.17
Return on Equity16.6822.04
Debt Q2 FY16 Q2 FY15
Current Ratio1.371.28
Debt/Capital0.30.39
Interest Expense14.0215.44
Interest Coverage16.6717.85


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)73.6173.2
Div / share0.060.06
EPS1.682.03
Book value / share37.3431.27
Institutional Own % n/a n/a
Avg Daily Volume1068180.01014522.0

Valuation


BUY. The current P/E ratio indicates a premium compared to an average of 21.96 for the Specialty Retail industry and a value on par with the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 3.99 indicates a premium versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 12.35. 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 24.10 Peers 21.96   AAP 19.87 Peers 14.09

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 significant 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 18.22 Peers 19.56   AAP 1.62 Peers 1.91

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 discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
AAP 3.99 Peers 12.35   AAP -9.51 Peers 0.78

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 1.15 Peers 1.48   AAP -3.73 Peers 7.28

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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