Advance Stock Valuation

AAP -  USA Stock  

USD 190.90  5.59  3.02%

What is the intrinsic value of Advance stock? Calculating the true value of any business is not as easy as it may seem. While the market cap of a public entity, such as Advance Auto, is its stock price multiplied by the total number of shares outstanding, calculating Advance Auto's enterprise value requires a different approach. It uses Advance Auto's balance sheet items such as long-term debt, the book value of the preferred stock, minority interest, and other important financials.
As of 27th of May 2022, Free Cash Flow is likely to drop to about 574.2 M. In addition to that, Enterprise Value is likely to drop to about 16.3 B.
Advance Auto Parts shows a prevailing Real Value of $208.99 per share. The current price of the firm is $190.9. At this time, the firm appears to be undervalued. Our model approximates the value of Advance Auto Parts from analyzing the firm fundamentals such as Current Valuation of 15.32 B, return on equity of 18.42 %, and Profit Margin of 5.60 % as well as examining its technical indicators and Probability Of Bankruptcy. In general, we favor obtaining undervalued instruments and abandoning overvalued instruments since, at some point, asset prices and their ongoing real values will blend.
  
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Advance Auto Valuation Module provides a unique way to ballpark how much the company is worth today. It is done using both, our quantitative analysis of the company fundamentals as well as its intrinsic market price estimation to project the real value. We also take into consideration other essential factors such as Advance Auto's management style, its c-level domain expertise and tenure, its overall leadership history as well as current capital structure, and future earnings potential.
Undervalued
Today 190.90
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Please note that Advance Auto's price fluctuation is very steady at this time. Calculation of the real value of Advance Auto Parts is based on 3 months time horizon. Increasing Advance Auto's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Advance Auto Parts is useful when determining the fair value of the Advance stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Advance Auto. Since Advance Auto is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Advance Stock. However, Advance Auto's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
162.21
Downside
208.99
Real Value
211.56
Upside
Estimating the potential upside or downside of Advance Auto Parts helps investors to forecast how Advance stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Advance Auto more accurately as focusing exclusively on Advance Auto's fundamentals will not take into account other important factors:
Earnings
Estimates (11)
LowProjected EPSHigh
11.5011.8712.00
Details
Hype
Prediction
LowEstimated ValueHigh
177.11179.68182.25
Details
Potential
Annual Dividend
LowIncome Per ShareHigh
0.170.170.17
Details
15 Analysts
Consensus
LowTarget PriceHigh
175.00255.77290.00
Details
Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Advance Auto's intrinsic value based on its ongoing forecasts of Advance Auto's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Advance Auto's closest peers. When choosing an evaluation method for Advance Auto Parts, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.

Advance Valuation Drivers Correlation

Many accounts on the financial statements of Advance Auto Parts are highly interrelated and sometimes correlated. Consequently, when conducting Advance's valuation analysis, one should examine all of the accounts reported to obtain a complete picture of its financial situation. We provide a unique feature to present a conventional correlation table purposely composed against different valuation-related drivers of Advance
Click cells to compare fundamentals

Advance Valuation Trend

Knowing Advance Auto's actual value is paramount for traders to make sound investment determinations. Advance Auto's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Advance Auto's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Advance Auto's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.

Advance Market Cap

Advance Auto Parts is rated third in market capitalization category among related companies. Market capitalization of Specialty Retail industry is presently estimated at about 32 Billion. Advance Auto totals roughly 11.34 Billion in market capitalization claiming about 35% of equities listed under Specialty Retail industry.
Capitalization  Total debt  Revenue  Valuation  Workforce

Advance Auto Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Advance Auto's current stock value. Our valuation model uses many indicators to compare Advance Auto value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Advance Auto competition to find correlations between indicators driving Advance Auto's intrinsic value. More Info.
Advance Auto Parts is number one stock in price to sales category among related companies. It is rated third in price to earning category among related companies reporting about  17.98  of Price to Earning per Price to Sales. As of 27th of May 2022, Price to Earnings Ratio is likely to grow to 27.43. Also, Earnings Before Interest Taxes and Depreciation Amortization EBITDA is likely to grow to about 1.1 B. Comparative valuation analysis is a catch-all model that can be used if you cannot value Advance Auto by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Advance Auto's Stock . Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Advance Auto's earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Advance Auto's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Advance Auto and how it compares across the competition.

About Advance Auto Valuation

The equity valuation mechanism determines the current worth of Advance Auto Parts on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Advance Auto Parts. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Advance Auto Parts based exclusively on its fundamental and basic technical indicators. By analyzing Advance Auto's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Advance Auto's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Advance Auto. We calculate exposure to Advance Auto's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Advance Auto's related companies.
Last ReportedProjected for 2022
Gross Profit4.9 B4.8 B
Profit Margin 0.06  0.05 
Advance Auto Parts, Inc. provides automotive replacement parts, accessories, batteries, and maintenance items for domestic and imported cars, vans, sport utility vehicles, and light and heavy duty trucks. The company was founded in 1929 and is based in Raleigh, North Carolina. Advance Auto operates under Specialty Retail classification in the United States and is traded on New York Stock Exchange. It employs 41000 people.

Advance Auto Quarterly Enterprise Value

16.11 Billion

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Advance Auto's stock price is the clearest measure of market expectations about its performance. Without stock valuation, investors cannot independently discern whether Advance Auto's value is low or high relative to the company's performance and growth projections. Determining the market value of Advance Auto can be done in different ways, such as multiplying its stock price by its outstanding shares.
A single share of Advance Auto represents a small ownership stake in the entity. As a stockholder of Advance, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.

Advance Auto Dividends Analysis For Valuation

Please note that Advance Auto has scaled down on payment of dividends at this time. Advance Auto Earning Before Interest and Taxes EBIT is very stable at the moment as compared to the past year. Advance Auto reported last year Earning Before Interest and Taxes EBIT of 843.72 Million. As of 27th of May 2022, Price to Earnings Ratio is likely to grow to 27.43, while Earnings per Diluted Share are likely to drop 8.29.
There are various types of dividends Advance Auto can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Advance shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Advance Auto Parts directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Advance pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Advance Auto by the value of the dividends paid out.

Advance Auto Valuation Growth Rates

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Advance Auto does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Quick Ratio0.27
Earnings Quarterly Growth-27.10%
Revenue Growth1.30%
Payout Ratio34.03%
Enterprise Value To Ebitda13.19
Earnings Growth-20.70%
Enterprise Value To Revenue1.39

Advance Auto Current Valuation Indicators

Valuation refers to the process of determining the present value of Advance Auto Parts and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Advance we look at many different elements of the entity such as Advance's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Advance Auto's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Advance Auto's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Advance Auto, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Advance Auto's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Advance Auto's worth.
Please continue to Trending Equities. Note that the Advance Auto Parts information on this page should be used as a complementary analysis to other Advance Auto's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

Complementary Tools for Advance Stock analysis

When running Advance Auto Parts price analysis, check to measure Advance Auto's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Advance Auto is operating at the current time. Most of Advance Auto's value examination focuses on studying past and present price action to predict the probability of Advance Auto's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Advance Auto's price. Additionally, you may evaluate how the addition of Advance Auto to your portfolios can decrease your overall portfolio volatility.
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Is Advance Auto's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Advance Auto. If investors know Advance will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Advance Auto listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
The market value of Advance Auto Parts is measured differently than its book value, which is the value of Advance that is recorded on the company's balance sheet. Investors also form their own opinion of Advance Auto's value that differs from its market value or its book value, called intrinsic value, which is Advance Auto's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Advance Auto's market value can be influenced by many factors that don't directly affect Advance Auto's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Advance Auto's value and its price as these two are different measures arrived at by different means. Investors typically determine Advance Auto value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Advance Auto's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.