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Advance Auto Parts (AAP) Gains But Lags Market: What You Should Know

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In the latest trading session, Advance Auto Parts (AAP - Free Report) closed at $146.31, marking a +0.7% move from the previous day. This change lagged the S&P 500's 1.75% gain on the day. Elsewhere, the Dow gained 1.05%, while the tech-heavy Nasdaq added 7.84%.

Prior to today's trading, shares of the auto parts retailer had lost 3.77% over the past month. This has was narrower than the Retail-Wholesale sector's loss of 5.68% and the S&P 500's loss of 4.4% in that time.

Investors will be hoping for strength from Advance Auto Parts as it approaches its next earnings release. The company is expected to report EPS of $2.44, up 17.87% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.42 billion, up 1.15% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $12.60 per share and revenue of $11.11 billion. These totals would mark changes of +4.83% and +0.98%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Advance Auto Parts. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.14% lower. Advance Auto Parts is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Advance Auto Parts has a Forward P/E ratio of 11.53 right now. For comparison, its industry has an average Forward P/E of 19.27, which means Advance Auto Parts is trading at a discount to the group.

We can also see that AAP currently has a PEG ratio of 0.92. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Automotive - Retail and Wholesale - Parts stocks are, on average, holding a PEG ratio of 1.87 based on yesterday's closing prices.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 227, putting it in the bottom 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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