# Advance Auto Parts (AAP.US)

Canonical: https://gigainvestors.com/s/AAP

Analysis as of: 2026-10-16T07:26:06.375Z. Financial observations: FY1998–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $43.92 per share; close as of 2026-10-15.

Estimated value: low $61.23 per share, central $62.94 per share, high $65.22 per share. Buy at or below the central value $62.94 per share. Valuation as of 2026-10-16T07:26:06.375Z; scenarios are not confidence intervals.

## Checklist

### understandable: fail

- 5 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 5

- Years with a net loss: 1

- Operating margin variation: 0.83×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.08×

- FY2017: 0.06×

- FY2018: 0.06×

- FY2019: 0.07×

- FY2020: 0.07×

- FY2021: 0.07×

- FY2022: 0.06×

- FY2023: 0.01×

- FY2024: -0.04×

- FY2025: 0.02×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 11.2%

- ROIC, second-lowest year: 0.8%

- Typical minus recent gross margin: 2.0 pp

- Typical gross margin (annual median): 43.9%

- Recent gross margin (lower of latest and 3-year median): 41.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.6%

- ROIC including acquisitions, ten-year median: 6.5%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 18.1%

- FY2017: 17.9%

- FY2018: 17.0%

- FY2019: 10.5%

- FY2020: 11.9%

- FY2021: 12.8%

- FY2022: 8.2%

- FY2023: 0.8%

- FY2024: -9.4%

- FY2025: 3.4%

### economics: fail

- incremental invested capital return below threshold

- Owner earnings / net income, 5-yr: 1.00×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $796M

- Net income, five-year total: $799M

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: -1.2 pp

- Working capital / revenue, change between three-year averages: -9.2 pp

- Working capital / revenue, final three-year average: 10.3%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 0.62×

- FY2023: 2.44×

- FY2024: 0.67×

- FY2025: 1.45×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 17.9% vs 0.8%

- Per-share earnings: 6.42 to 0.50 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -1.9%

- Ordinary dilution, 5-year annual growth: -2.6%

- Market cap gain: -$10B

- Cumulative retained earnings: $1.7B

- Diluted shares, 10-year annual growth: -1.9%

- Diluted shares, 5-year annual growth: -2.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: -27.3%

- Per-share value change: -$5.91

- Per-share value, starting three-year median: $6.42

- Per-share value, ending three-year median: $0.50

- Buybacks concentrated in cheaper years (correlation): 0.28

- Average buyback yield: 2.8%

- Buyback history: 9 years

- Debt-funded buybacks: Yes

- Acquisition spending: $161M

- Cumulative net income, 10 years: $3.1B

- ROIC, first three-year median: 17.9%

- ROIC, last three-year median: 0.8%

Chart: Earnings per share; fiscal year observations.

- FY2016: $6.22

- FY2017: $6.42

- FY2018: $5.73

- FY2019: $6.84

- FY2020: $7.14

- FY2021: $9.25

- FY2022: $7.65

- FY2023: $0.50

- FY2024: -$5.61

- FY2025: $0.73

### accounting: fail

- earnings not backed by cash

- Sloan accruals: 0.8%

- Receivables to sales index (DSRI): 0.74×

- Restructuring years, last five: 0

- Earnings backed by cash: No

- Operating cash / earnings: -1.05×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.45×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -0.8%

- FY2017: -1.5%

- FY2018: -4.3%

- FY2019: -3.4%

- FY2020: -4.0%

- FY2021: -4.2%

- FY2022: -2.2%

- FY2023: -2.1%

- FY2024: -3.9%

- FY2025: 0.8%

## Holders

- [Richard Pzena](https://gigainvestors.com/PIM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [William Browne](https://gigainvestors.com/TB): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 82% since Dec 2021 · "Advance Auto Parts Records Surprise Decline in Quarterly Comparable Sales Amid DIY Weakness" (finance.yahoo.com, Aug 2026) · sales -5.4%

Story as of 2026-10-16T09:58:12.571Z; price observation 2026-10-15.

- 2025-05-22: Advance Auto Parts Stock Soars as Firm Backs Forecast Amid Tariff Pressure ([finance.yahoo.com](https://finance.yahoo.com/news/advance-auto-parts-stock-soars-135415179.html))

- 2025-07-24: Advance Auto stock higher on FQ2 revenue estimate above consensus, $1.5B private notes offering ([seekingalpha.com](https://seekingalpha.com/news/4471365-advance-auto-stock-higher-on-fq2-revenue-estimate-above-consensus-15b-private-notes-offering?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-11-03: Advance Auto Beats Q3 Earnings Estimates, Narrows 2025 Sales Outlook ([finance.yahoo.com](https://finance.yahoo.com/news/advance-auto-beats-q3-earnings-165200402.html))

- 2026-02-13: Advance Auto Parts beats Q4 estimates, guides for sales growth in 2026 ([finance.yahoo.com](https://finance.yahoo.com/news/advance-auto-parts-beats-q4-121305553.html))

- 2026-05-21: Advance Auto Parts falls on weak full-year guidance ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/advance-auto-parts-falls-weak-111114941.html))

- 2026-08-20: Advance Auto Parts (NYSE:AAP) Misses Q2 CY2026 Revenue Estimates, Stock Drops 16% ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/advance-auto-parts-nyse-aap-104118638.html))

### Sales · FY2024–2025

sales -5.4%; source https://www.sec.gov/Archives/edgar/data/1158449/000119312526051305/aap-20260103.htm; observed 2026-02-13.

- FY2016: $9.6B 

- FY2017: $9.4B 

- FY2018: $9.6B 

- FY2019: $9.7B 

- FY2020: $10B 

- FY2021: $11B 

- FY2022: $9.1B 

- FY2023: $9.2B 

- FY2024: $9.1B 

- FY2025: $8.6B 

### Gross margin · FY2025

gross margin 43.4%; source https://www.sec.gov/Archives/edgar/data/1158449/000119312526051305/aap-20260103.htm; observed 2026-02-13.

- FY2016: 44.5% 

- FY2017: 43.6% 

- FY2018: 44.0% 

- FY2019: 43.8% 

- FY2020: 44.3% 

- FY2021: 44.8% 

- FY2022: 46.3% 

- FY2023: 41.9% 

- FY2024: 37.5% 

- FY2025: 43.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in auto parts; annual sales are USD 8.6 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1158449/000119312526051305/aap-20260103.htm (filed 2026-02-13); FY2025: revenue 8601000000; grossProfit 3733000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); AAP.US: Advance Auto Parts, Inc. provides automotive aftermarket parts. The company offers batteries and battery accessories; belts and hoses; brakes and brake pads; chassis parts; climate control parts; clutches and drive shafts; engines and engine parts; exhaust systems and parts; hub assemblies; ignition components and wires; radiators and cooling parts; starters and alternators; and steering and alignment parts. It also provides air conditioning chemicals and accessories; air fresheners; antifreeze and washer fluid; electrical wire and fuses; electronics; floor mats, seat covers, and interior accessories; hand and specialty tools; lighting products; performance parts; sealants, adhesives, and compounds; tire repair accessories; vent shades, mirrors, and exterior accessories; washes, waxes, and cleaning supplies; and wiper blades. In addition, the company offers air filters; fuel and oil additives; fuel filters; grease and lubricants; motor oil; oil filters; part cleaners and treatments; and transmission fluid. Further, it provides battery and wiper installation; engine light scanning; electrical system testing, including batteries, starters, and alternators; oil and battery recycling; and loaner tool program services. The company serves professional installers and do-it-yourself customers. It operates stores and independently owned branded stores in the United States, Canada, Puerto Rico, the U.S. Virgin Islands, Mexico, and various Caribbean islands primarily under the Advance Auto Parts and Carquest trade brands. The company also offers its products online. The company was founded in 1929 and is based in Raleigh, North Carolina.

### Why customers stay

Margins ranged from 37.5% to 43.4% during 2023–25; it earns 11.2% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2023: grossProfit / revenue = 41.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2024: grossProfit / revenue = 37.5%.

- Source: https://www.sec.gov/Archives/edgar/data/1158449/000119312526051305/aap-20260103.htm (filed 2026-02-13); FY2025: grossProfit / revenue = 43.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); 10-year return on capital observations [[2016,0.1806805059095247],[2017,0.17856274855150991],[2018,0.17020734516286962],[2019,0.10545356188468408],[2020,0.1188497157223044],[2021,0.12782957500787698],[2022,0.08237776802286531],[2023,0.008265502001316774],[2024,-0.09417527294187075],[2025,0.03438496891051636]]; median 0.11215163880349424. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2016: growth capex 0; upkeep 259559000; owner earnings 458450000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2017: growth capex 0; upkeep 189758000; owner earnings 535007000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2018: growth capex 0; upkeep 193715000; owner earnings 468316000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2019: growth capex 25210936.134203196; upkeep 446437063.8657968; owner earnings 278829936.1342032. Growth capex / owner earnings = 0.09041689168579431.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2020: growth capex 17725000; upkeep 250081000; owner earnings 493021000. Growth capex / owner earnings = 0.035951815439910266.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2021: growth capex 29706000; upkeep 259933000; owner earnings 596615000. Growth capex / owner earnings = 0.049790903681603715.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2022: growth capex 0; upkeep 425961000; owner earnings 286768000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); FY2023: growth capex 0; upkeep 225672000; owner earnings 73328000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1158449/000119312526051305/aap-20260103.htm (filed 2026-02-13); FY2025: growth capex 0; upkeep 252000000; owner earnings 64000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); Dividend observations: [[2016,17738000],[2017,17854000],[2018,17819000],[2019,17185000],[2020,56347000],[2021,160925000],[2022,336230000],[2023,209293000],[2024,59855000],[2025,60000000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 0.7% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); AAP.US SharesStats.PercentInsiders = 0.745 percentage points; cache date 2026-10-15.

### What could break it

US import tariffs could raise product costs.

- Source: https://www.sec.gov/Archives/edgar/data/1158449/000119312526051305/aap-20260103.htm (filed 2026-02-13); mprove product lifecycle management and address slower-moving inventory in its network. The Company’s investments in supply chain may not provide the anticipated benefits, and experiencing sub-optimal inventory levels, inventory availability or increases in its costs could adversely affect its business, financial condition, results of operations and cash flows.

An unstable global economic and geopolitical landscape increases uncertainty about key areas of doing business internationally and may have a negative impact on our business.

8

Table of Contents

During fiscal 2025, new global trade tariffs were imposed on imports to the U.S., including tariffs on imports from various countries from which the Company directly or indirectly imports and/or sources merchandise, including Canada, China and Mexico, among others. In response, several countries imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other measures. Various modifications and delays to the U.S. tariffs have been announced and further changes are expected to be made in the future, which may include additional sector-based tariffs or other measures. Additionally, the current administration has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, enforcement priorities, sanctions, treaties and tariffs. Significant uncertainty continues to exist about the future economic and political relationship between the U.S. and other countries. The ultimate impact of tariffs on the Company’s business will depend on several factors, including whether additional or incremental U.S. tariffs or other measures are announced, revised, or rescinded, to what extent other countries implement tariffs or other measures in response, and the overall magnitude and duration of these items. These developments, or the perception that any of them could occur, may have a material effect on global economic conditions, the stability of global financial markets, or global trade, and may impact the Company’s product cost, pricing, or competitive conditions, disrupt supply chains, impact the broader macroeconomic environment and consumer sentiment or otherwise negatively impact the Company’s business, financial condition and results of operations.



### What the price says

The price is 0.3 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-13); Closing price 43.92 USD; reporting-to-trading FX 1; FY2025 annual sales per share 141.93069306930693; price multiple 0.3094468085106383. FY2025 cash earnings/share 1.056105610561056. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $140.08 per share

- 2016-11: $169.72 per share

- 2016-12: $169.12 per share

- 2017-01: $164.24 per share

- 2017-02: $156.61 per share

- 2017-03: $148.26 per share

- 2017-04: $142.14 per share

- 2017-05: $133.63 per share

- 2017-06: $116.59 per share

- 2017-07: $112.01 per share

- 2017-08: $97.90 per share

- 2017-09: $99.20 per share

- 2017-10: $81.74 per share

- 2017-11: $101.00 per share

- 2017-12: $99.69 per share

- 2018-01: $116.99 per share

- 2018-02: $114.25 per share

- 2018-03: $118.55 per share

- 2018-04: $114.45 per share

- 2018-05: $128.62 per share

- 2018-06: $135.70 per share

- 2018-07: $141.23 per share

- 2018-08: $164.03 per share

- 2018-09: $168.33 per share

- 2018-10: $159.76 per share

- 2018-11: $177.71 per share

- 2018-12: $157.46 per share

- 2019-01: $159.20 per share

- 2019-02: $161.78 per share

- 2019-03: $170.53 per share

- 2019-04: $166.32 per share

- 2019-05: $155.00 per share

- 2019-06: $154.14 per share

- 2019-07: $150.64 per share

- 2019-08: $137.95 per share

- 2019-09: $165.40 per share

- 2019-10: $162.48 per share

- 2019-11: $157.08 per share

- 2019-12: $160.16 per share

- 2020-01: $131.75 per share

- 2020-02: $132.98 per share

- 2020-03: $93.32 per share

- 2020-04: $120.91 per share

- 2020-05: $139.32 per share

- 2020-06: $142.45 per share

- 2020-07: $150.14 per share

- 2020-08: $156.31 per share

- 2020-09: $153.50 per share

- 2020-10: $147.28 per share

- 2020-11: $147.70 per share

- 2020-12: $157.51 per share

- 2021-01: $149.14 per share

- 2021-02: $160.35 per share

- 2021-03: $183.49 per share

- 2021-04: $200.16 per share

- 2021-05: $189.73 per share

- 2021-06: $205.14 per share

- 2021-07: $212.06 per share

- 2021-08: $202.85 per share

- 2021-09: $208.89 per share

- 2021-10: $225.52 per share

- 2021-11: $220.72 per share

- 2021-12: $239.88 per share

- 2022-01: $231.51 per share

- 2022-02: $204.48 per share

- 2022-03: $206.96 per share

- 2022-04: $199.63 per share

- 2022-05: $189.86 per share

- 2022-06: $173.09 per share

- 2022-07: $193.62 per share

- 2022-08: $168.64 per share

- 2022-09: $156.34 per share

- 2022-10: $189.92 per share

- 2022-11: $150.99 per share

- 2022-12: $147.03 per share

- 2023-01: $152.28 per share

- 2023-02: $144.96 per share

- 2023-03: $121.61 per share

- 2023-04: $125.53 per share

- 2023-05: $72.89 per share

- 2023-06: $70.30 per share

- 2023-07: $74.39 per share

- 2023-08: $68.82 per share

- 2023-09: $55.93 per share

- 2023-10: $52.03 per share

- 2023-11: $50.79 per share

- 2023-12: $61.03 per share

- 2024-01: $66.85 per share

- 2024-02: $67.54 per share

- 2024-03: $85.09 per share

- 2024-04: $72.98 per share

- 2024-05: $70.64 per share

- 2024-06: $63.33 per share

- 2024-07: $63.33 per share

- 2024-08: $45.31 per share

- 2024-09: $38.99 per share

- 2024-10: $35.69 per share

- 2024-11: $41.35 per share

- 2024-12: $47.29 per share

- 2025-01: $48.50 per share

- 2025-02: $36.90 per share

- 2025-03: $39.21 per share

- 2025-04: $32.72 per share

- 2025-05: $47.93 per share

- 2025-06: $46.49 per share

- 2025-07: $53.07 per share

- 2025-08: $60.99 per share

- 2025-09: $61.40 per share

- 2025-10: $47.13 per share

- 2025-11: $51.88 per share

- 2025-12: $39.30 per share

- 2026-01: $48.01 per share

- 2026-02: $53.17 per share

- 2026-03: $52.75 per share

- 2026-04: $59.51 per share

- 2026-05: $60.24 per share

- 2026-06: $62.22 per share

- 2026-07: $55.54 per share

- 2026-08: $42.18 per share

- 2026-09: $38.91 per share

- 2026-10: $43.92 per share

## Annual estimated value (USD per share)

- FY2016: low $98.16 per share, central $143.20 per share, high $168.32 per share

- FY2017: low $82.10 per share, central $92.76 per share, high $106.94 per share

- FY2018: low $86.57 per share, central $97.35 per share, high $111.70 per share

- FY2019: low $82.84 per share, central $102.72 per share, high $119.36 per share

- FY2020: low $95.78 per share, central $119.02 per share, high $137.47 per share

- FY2021: low $106.92 per share, central $134.02 per share, high $155.55 per share

- FY2022: low $81.79 per share, central $92.87 per share, high $107.62 per share

- FY2023: low $58.04 per share, central $65.33 per share, high $75.05 per share

- FY2024: low $80.18 per share, central $87.35 per share, high $96.90 per share

- FY2025: low $61.05 per share, central $62.75 per share, high $65.02 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1158449/000119312526051305/aap-20260103.htm); period 2026-01-03, filed 2026-02-13.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.