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Advance Auto Parts (AAP) Outpaces Stock Market Gains: What You Should Know

Advance Auto Parts (AAP) closed at $119.44 in the latest trading session, marking a +1.73% move from the prior day. This move outpaced the S&P 500's daily gain of 0.02%. Meanwhile, the Dow lost 0.42%, and the Nasdaq, a tech-heavy index, added 2.7%.

Heading into today, shares of the auto parts retailer had lost 8.42% over the past month, lagging the Retail-Wholesale sector's gain of 1.85% and the S&P 500's gain of 1.07% in that time.

Investors will be hoping for strength from Advance Auto Parts as it approaches its next earnings release, which is expected to be May 31, 2023. The company is expected to report EPS of $2.60, down 27.17% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.43 billion, up 1.56% from the prior-year quarter.

AAP's full-year Zacks Consensus Estimates are calling for earnings of $10.64 per share and revenue of $11.44 billion. These results would represent year-over-year changes of -18.4% and +2.53%, respectively.

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

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.07% higher. Advance Auto Parts is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Advance Auto Parts has a Forward P/E ratio of 11.04 right now. For comparison, its industry has an average Forward P/E of 25.7, which means Advance Auto Parts is trading at a discount to the group.

Also, we should mention that AAP has a PEG ratio of 0.97. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. AAP's industry had an average PEG ratio of 1.77 as of yesterday's close.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 81, putting it in the top 33% 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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Advance Auto Parts, Inc. (AAP) : Free Stock Analysis Report

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Zacks Investment Research