Advance Auto Parts, Inc. (AAP) AI Stock Analysis

Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance products for domestic and imported vehicles. Its inventory includes battery accessories, brakes, engines, exhaust systems, steering components, chemicals, electronics, tools, and cleaning supplies. The company also offers services such as battery and wiper installation, engine light scanning, electrical system testing, oil and battery recycling programs, and a loaner tool program. Advance Auto Parts operates retail stores and branches under the Advance Auto Parts, Autopart International, Carquest, and Worldpac brands across the United States, Puerto Rico, the U.S. Virgin Islands, and Canada, alongside independently owned Carquest stores in Mexico and the Caribbean.

Advance Auto Parts generated $8.60B in revenue in FY2025, representing a decline of 5.4% following sales of $9.09B in FY2024 and $9.21B in FY2023. Operating margin improved to 1.9% in FY2025 from -4.4% in FY2024, helping net income return to positive territory at $44.0M compared to -$336.0M in FY2024. Over five years from FY2020 to FY2025, revenue contracted at a CAGR of -3.2%. For the trailing twelve months ended June 30, 2026, revenue stood at $8.62B with an operating margin of 5.5% and a net profit margin of 1.0%. In the latest quarter ended June 30, 2026, quarterly revenue fell 0.5% year-over-year, while quarterly earnings grew 260.0%.

As of June 30, 2026, Advance Auto Parts held $3.12B in cash and short-term investments against total debt of $5.21B, resulting in net debt of $2.09B. Shareholders' equity was $2.26B, yielding a debt-to-equity ratio of 2.31 and a current ratio of 1.75. In FY2025, operating cash flow was -$46.0M and capital expenditures totaled $252.0M, generating free cash flow of -$298.0M. During FY2025, the company paid $60.0M in dividends, while its 5-year share count change was -2.9%.

Advance Auto Parts trades at a trailing P/E of 24.7x, which sits above the 18.0x median of its US-listed Consumer Cyclical peers. However, its forward P/E of 10.8x and EV to EBITDA of 7.7x are lower than the peer group medians of 14.1x and 11.1x, respectively. The stock trades at a price-to-sales multiple of 0.3x compared to the peer median of 0.7x. Over the past year, the stock fell 15.3%, trailing the S&P 500 (SPY) return of 16.8%, and its 5-year return of -76.7% substantially lagged the index return of 83.0%.

Advance Auto Parts pays an annual forward dividend of $1.00 per share, delivering a dividend yield of 2.25%. The dividend payout ratio stands at 27.9%, and the company distributes payments on a quarterly schedule. Advance Auto Parts has maintained consecutive dividend payments for 21 years, though its 5-year annualized dividend growth rate is 0.0%. Its most recent ex-dividend date was October 9, 2026.

Wall Street analysts hold 2 Strong Buy, 0 Buy, 20 Hold, 2 Sell, and 1 Strong Sell ratings on the stock. The mean price target is $49.95, which is 12.4% above the last close of $44.45. For the current fiscal year ending December 31, 2026, consensus estimates project EPS of $2.99, an increase of 32.3%, on revenue of $8.53B. The company has beaten EPS expectations in each of the last 4 quarters, and its next earnings date is November 5, 2026.

This page is an AI-written research summary of Advance Auto Parts, Inc. (AAP). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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