Advanced Auto Parts Inc. ($AAP) Earnings (Q1 FY22)

 Advanced Auto Parts Inc. ($AAP) Earnings and Opinion:


Advanced Auto Parts is a company in the Consumer Cyclical sector and operates in the Specialty Retail industry. The Company provides automotive parts and accessories for all sorts of vehicles. Advanced Auto Parts was founded in 1929 and is currently headquartered in Raleigh, North Carolina. The company was first traded on the stock market in 2001.

Advanced Auto Parts EPS and Revenue (Q1 FY22):

  • EPS of $3.57 missing expectations of $3.59
  • Revenue of $3.37B missing expectations of $3.39B
Advanced Auto Parts Q1 Highlights:
  • Net sales increased 1.3% Y/Y
  • Comparable stores sales up 0.6% Y/Y
  • Free cash flow of $169.8M
  • Returned $403M to shareholders through repurchase and dividends
  • Opened 35 new stores
Opinion:
Advanced Auto Parts stock is currently sliding after reporting earnings after the market closed today. The company missed expectations on both EPS and revenue. Looking at the overall position of the company, it seems to be in a reasonable position. It isn't common for most of these types of companies to have high growth or high beats on earnings. These companies grow a slight bit or at least maintain their earnings on a year to year basis. A noticeable figure to look at is that the stock is down around 20% over the past 6 months. These stocks relatively don't move around a lot, but just give you your normal return on a year over year basis. Companies like Advanced Auto Parts open new stores every year, and they achieved opening 35 new ones in this quarter alone. The highlights don't show us a lot, but shows some growth in a very small manner in some categories. In terms of the stock valuation, the company has a P/E of 18.17 and a P/S of 1.02. Both of these are some pretty solid valuations, making the stock seem pretty cheap. However, the one thing that stands out the most to me is the fact that they have little cash and a boatload of debt. This could lead to some potential trouble in the future, and they need to generate some more cash to help pay off these obligations. This is what is going to keep me out of the stock for right now. I will look for better places to invest because I see slow growth with Advanced Auto Parts and better returns with other companies in this industry. 

*Information from Advanced Auto Parts, Google, Yahoo Finance, and CMLVIZ

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