Advance Auto Parts Inc. (NYSE:AAP) Growth Potential and Market Position Analysis

• The consensus price target for Advance Auto Parts, Inc. (NYSE:AAP) has increased significantly, indicating a positive outlook from analysts.
• Despite expectations of a decline in second-quarter earnings, long-term projections remain optimistic, with Wells Fargo setting a price target of $230.
• Advance Auto Parts receives a rare double upgrade from analysts, suggesting resilience against market uncertainties like tariffs, interest rates, and inflation.

Advance Auto Parts, Inc. (NYSE:AAP) is a key player in the automotive replacement parts industry, offering a diverse range of products and services for various vehicles. The company operates under multiple brands and maintains a strong presence in the United States, Puerto Rico, the U.S. Virgin Islands, Canada, and other regions. This extensive reach allows AAP to cater to a broad customer base, enhancing its market position.

The consensus price target for AAP has seen a notable increase over the past year. Last month, the average price target was $65, up from $50 last quarter and $52 last year. This upward trend suggests that analysts are increasingly optimistic about AAP's future prospects. Factors such as improved financial performance, strategic initiatives, or positive industry trends could be contributing to this favorable outlook.

Despite the positive sentiment reflected in the consensus price target, AAP is anticipated to report a decline in its second-quarter earnings. According to Wells Fargo, the company may not have the right combination of key factors necessary for an earnings beat in its upcoming report. However, Wells Fargo has set a price target of $230 for AAP, indicating a long-term positive outlook for the stock.

The broader earnings landscape appears robust, with the Tech sector experiencing favorable revisions. However, AAP's potential to exceed quarterly earnings estimates is highlighted by Zacks, which uses the Zacks Earnings ESP tool to identify stocks with the best chance of surprising with their earnings results. This suggests that while short-term challenges exist, there is potential for positive surprises in AAP's earnings performance.

In 2025, financial markets face uncertainty due to factors like tariffs, interest rates, and inflation. Despite these challenges, AAP has received a rare double upgrade from analysts, as highlighted by MarketBeat. This, along with Wells Fargo's $230 price target, indicates a positive outlook for AAP, suggesting that the company is well-positioned to navigate the prevailing market conditions.

Advance Auto Parts, Inc. (NYSE:AAP) is a leading automotive aftermarket parts provider in North America, competing with giants like AutoZone and O'Reilly Automotive. The company is gearing up for its quarterly earnings release on August 14, 2025, with Wall Street estimating an earnings per share (EPS) of $0.59 and revenue of approximately $1.97 billion.

The expected EPS of $0.59 for the quarter ending June 2025 marks a significant year-over-year decline of 21.3%. Despite this, there has been a slight upward revision of 0.5% in the consensus EPS estimate over the past 30 days, as highlighted by Zacks. This trend is crucial as it often correlates with short-term stock price movements.

Revenues for AAP are projected to reach $1.97 billion, representing a decrease of 25% compared to the same quarter last year. This decline in revenue is a key concern for investors, signaling potential challenges in the company's sales performance. The upcoming earnings call will be pivotal in addressing these concerns and shedding light on future earnings projections.

AAP's financial metrics reveal some challenges. The price-to-sales ratio stands at about 0.38, suggesting the stock is valued at 38 cents for every dollar of sales. Additionally, the enterprise value to operating cash flow ratio is around -74.83, highlighting difficulties in generating cash flow relative to its enterprise value.

The company's debt-to-equity ratio is about 1.67, indicating a higher level of debt compared to equity. However, AAP maintains a current ratio of approximately 1.27, suggesting a reasonable level of liquidity to cover short-term liabilities. These financial metrics will be closely monitored by investors as they assess the company's financial health and potential for future growth.

Advance Auto Parts (NYSE:AAP) is a leading automotive aftermarket parts provider in North America, offering a wide range of products, including replacement parts, accessories, batteries, and maintenance items for cars and trucks. AAP competes with other major players in the industry, such as AutoZone and O'Reilly Automotive.

On May 22, 2025, AAP reported an earnings per share (EPS) of -$0.22, which was significantly better than the estimated EPS of -$0.82. The company achieved an earnings surprise of 72.84%, as highlighted by Zacks. Despite a negative price-to-earnings (P/E) ratio of -8.19, AAP's performance exceeded expectations.

AAP also reported revenue of approximately $2.58 billion, surpassing the estimated revenue of about $2.51 billion. This revenue figure, although down 7% year over year, exceeded the Zacks Consensus Estimate by 3.34%. The company has exceeded consensus revenue estimates three times in the last four quarters, demonstrating its ability to outperform market expectations.

The positive market reaction to AAP's results is evident, with shares surging by approximately 46% as of 10:45 a.m. ET. This comes after a challenging year where the company's stock had lost more than half its value due to poor performance and broader economic concerns. Investors' low expectations were pleasantly surprised by the company's results and strategic initiatives.

AAP has been actively pursuing a transformation plan, which includes closing hundreds of stores and opening new ones in more strategic locations. Despite the challenges, the company has reiterated its guidance, affirming that its restructuring plan is progressing well. The debt-to-equity ratio of 1.70 suggests that AAP has a significant amount of debt compared to its equity, but the current ratio of 1.32 indicates a reasonable level of liquidity to cover short-term liabilities.

Advance Auto Parts (NYSE:AAP) surged 46% intra-day today after reporting a narrower-than-expected Q1 loss and topping revenue forecasts, while reaffirming its full-year guidance despite ongoing macro challenges.

For the quarter, the company posted an adjusted loss of $0.22 per share, a significant beat against analyst expectations of a $0.69 loss. Revenue came in at $2.58 billion, exceeding the $2.51 billion consensus, though down from $2.8 billion a year earlier.

Comparable store sales fell 0.6% year-over-year, excluding the impact of over 500 corporate store closures tied to an ongoing optimization effort. Gross margin contracted slightly to 42.9% from 43.4%, primarily due to liquidation-related markdowns.

Despite headwinds from economic pressures and new tariffs, Advance Auto Parts maintained its 2025 guidance, forecasting net sales between $8.4 billion and $8.6 billion, same-store sales growth of 0.5% to 1.5%, and adjusted EPS between $1.50 and $2.50—bracketing the $1.54 consensus.

The strong Q1 beat and reaffirmed outlook boosted investor confidence in the company’s turnaround plan and operational stability.

Advance Auto Parts (NYSE:AAP) is a leading automotive aftermarket parts provider in North America. The company supplies replacement parts, accessories, and maintenance items for cars and trucks. AAP competes with other major players like AutoZone and O'Reilly Automotive. As the company prepares to release its quarterly earnings on May 22, 2025, investors are keenly watching the anticipated financial results.

Wall Street estimates AAP's earnings per share (EPS) to be -$0.82 for the quarter ending March 2025. The revenue is projected to be approximately $2.51 billion, a decrease of 26.6% from the same quarter last year. These figures highlight the financial challenges AAP is currently facing.

Over the past 30 days, analysts have revised the consensus EPS estimate downward by 3.6%. This revision suggests a reevaluation of AAP's financial performance, which could influence the stock's short-term price movement. If the actual earnings exceed expectations, the stock might see an upward trend. Conversely, if the results fall short, a decline in stock price is likely.

AAP's financial ratios further illustrate its current challenges. The company has a negative price-to-earnings (P/E) ratio of approximately -5.75, indicating negative earnings. The price-to-sales ratio is about 0.20, suggesting the stock is valued at 20 cents for every dolxlar of sales. Additionally, the enterprise value to sales ratio is around 0.38, reflecting the company's total valuation relative to its sales.

The company's debt-to-equity ratio stands at about 1.70, indicating a relatively high level of debt compared to its equity. However, AAP maintains a current ratio of approximately 1.32, suggesting it has a reasonable level of liquidity to cover short-term liabilities. The upcoming earnings report and management's discussion will be crucial in determining the sustainability of any immediate price changes and future earnings projections.

Advance Auto Parts (NYSE:AAP) delivered stronger-than-expected fourth-quarter results, but its shares dropped 14% intra-day today.

The automotive parts retailer posted an adjusted loss per share of $1.18, which narrowed from the $1.31 loss analysts had forecast. Revenue came in at $2 billion, outpacing the $1.93 billion consensus estimate, signaling better-than-expected demand despite ongoing challenges.

Throughout 2024, Advance Auto Parts focused on restructuring efforts to reposition itself for long-term growth, with total net sales for the year reaching $9.1 billion—down 1.2% from 2023. Comparable store sales also declined 0.7% year-over-year, reflecting softening demand in certain segments.

Looking forward, the company aims to regain momentum in 2025, setting full-year earnings guidance between $1.50 and $2.50 per share on projected revenue of $8.4 billion to $8.6 billion. The midpoint of this earnings range surpasses current analyst expectations of $1.56.