Back to top

Image: Bigstock

Advance Auto Parts (AAP) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

In the latest trading session, Advance Auto Parts (AAP - Free Report) closed at $149.88, marking a +1.65% move from the previous day. This change outpaced the S&P 500's 1.3% loss on the day. Meanwhile, the Dow lost 0.77%, and the Nasdaq, a tech-heavy index, lost 5.51%.

Coming into today, shares of the auto parts retailer had gained 0.28% in the past month. In that same time, the Retail-Wholesale sector gained 11.37%, while the S&P 500 gained 6.41%.

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 $2.43, up 17.39% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.43 billion, up 1.34% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for Advance Auto Parts. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.49% lower within the past month. Advance Auto Parts is currently a Zacks Rank #5 (Strong Sell).

Digging into valuation, Advance Auto Parts currently has a Forward P/E ratio of 11.16. For comparison, its industry has an average Forward P/E of 20.05, which means Advance Auto Parts is trading at a discount to the group.

Also, we should mention that AAP has a PEG ratio of 0.98. 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 1.66 based on yesterday's closing prices.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 232, which puts it in the bottom 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Advance Auto Parts, Inc. (AAP) - free report >>

Published in