Core Insights - The focus is on the Zacks Rank system, which emphasizes earnings estimates and revisions to identify strong stocks [1] - Value investing is highlighted as a preferred method for finding undervalued stocks through fundamental analysis [2] - The Style Scores system developed by Zacks helps identify stocks with specific traits, particularly those with high grades in the Value category [3] Company Analysis: Advance Auto Parts (AAP) - Advance Auto Parts currently holds a Zacks Rank of 2 (Buy) and an A grade for Value [4] - The stock has a Forward P/E ratio of 16.14, significantly lower than the industry average of 22.77 [4] - Over the past 52 weeks, AAP's Forward P/E has fluctuated between a high of 32.99 and a low of -94.12, with a median of 16.16 [4] - The strong earnings outlook and current valuation suggest that AAP is likely undervalued, making it an impressive value stock [5]

Industry Overview - The Zacks Automotive - Retail and Wholesale - Parts industry involves retail, distribution, and installation of vehicle components, including various parts and accessories [2] - The industry is characterized by fierce competition and is undergoing transformative shifts due to changing customer preferences and technological advancements [2] Factors Influencing the Industry Outlook - The average age of vehicles on U.S. roads has increased from 11.1 years to 12.6 years over the last decade, leading to higher demand for servicing and replacement parts [3] - Consumers are spending more on essential repairs and part replacements to maintain vehicle functionality, contributing to increased demand for auto parts [3] Expansion Efforts - Auto part dealers are expanding into new markets through strategic acquisitions and the establishment of mega hubs, which enhance market share and offerings [4] - Investment in digital platforms is aligned with consumer preferences for online transactions, allowing dealers to reach a broader audience and drive profitability [4] Capital Expenditure Trends - Auto part retailers are increasing capital expenditure to support growth, improve electronic catalogs, expand stores, and enhance supply chain and merchandising projects [5] - These investments may limit near-term cash flows but are essential for long-term business growth [5] Industry Performance and Rankings - The Zacks Auto Retail & Wholesale Parts industry holds a Zacks Industry Rank of 95, placing it in the top 39% of around 250 Zacks industries, indicating bright near-term prospects [6] - The industry has outperformed the S&P 500 and the Auto, Tires, and Truck sector over the past year, with a growth of 10.3% compared to the S&P 500's 8.3% [9] Current Valuation - The industry is currently trading at an EV/EBITDA ratio of 30.99X, significantly higher than the S&P 500's 18.31X and the sector's 16.34X [12] - Over the past five years, the industry's EV/EBITDA ratio has ranged from a high of 32.85X to a low of 18.68X, with a median of 24.15X [13] Company Highlights - **AutoZone**: A leading specialty retailer and distributor of automotive replacement parts, expecting growth in fiscal 2025 driven by strong DIY and commercial performance, with year-over-year sales and EPS growth estimates of 1.78% and 2.74% respectively for fiscal 2025 [17][18] - **Genuine Parts Company (GPC)**: Strengthened by the acquisition of Motor Parts & Equipment Corporation, with a focus on restructuring to realize $100 million to $125 million in additional savings, and year-over-year sales growth estimates of 2.74% for 2025 [21][24] - **Advance Auto Parts (AAP)**: Improved liquidity from the sale of Worldpac for $1.5 billion, allowing a sharper focus on core business operations, with an impressive EPS growth estimate of 644.83% for 2025 [27][28]

Economic Environment and Trade Tariffs - The new economic environment is influenced by trade tariffs implemented by President Trump, affecting consumer psychology and business purchasing decisions [1][2] - The exemption of auto parts and manufacturers from these tariffs is expected to alleviate some concerns in the automotive sector [2] Auto Parts Sales Performance - Auto parts and dealer sales experienced a significant increase of 5.3% in March, reversing a previous contraction trend [4] - This surge is attributed to consumer behavior, as buyers anticipate rising prices due to tariffs [5] Investment Opportunities in Auto Parts Stocks - Three stocks are highlighted as potential beneficiaries of the recent sales shift: AutoZone Inc. (AZO), O'Reilly Automotive Inc. (ORLY), and Advance Auto Parts Inc. (AAP) [3][6] - AutoZone has seen substantial institutional investment, with $6.2 billion entering the stock over the past quarter [8] - O'Reilly Automotive maintains an Overweight rating from Wells Fargo, with a price target of $1,550, indicating a potential 12% upside [11][12] - Advance Auto Parts is viewed as an asymmetric opportunity, trading at 40% of its 52-week high, with a consensus price target of $45.1, suggesting a 42% upside [15][16] Market Sentiment and Analyst Ratings - The decline in short interest for AutoZone indicates a shift in market sentiment towards bullishness [10] - Analysts project a significant earnings growth for O'Reilly, forecasting a 23% increase in EPS [13] - Advance Auto Parts is trading at a premium P/E ratio of 44.80, reflecting strong market confidence in its growth potential [17]

Core Viewpoint - Advance Auto Parts (AAP) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook driven by rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - For Advance Auto Parts, the increase in earnings estimates suggests an improvement in the company's underlying business, likely leading to higher stock prices as investors respond positively [5][8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of generating significant returns, particularly for Zacks Rank 1 stocks [7][9]. - The upgrade of Advance Auto Parts to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10]. Earnings Estimate Details - Advance Auto Parts is projected to earn $1.58 per share for the fiscal year ending December 2025, reflecting a substantial year-over-year increase of 644.8% [8]. - Over the past three months, the Zacks Consensus Estimate for the company has risen by 1.8%, indicating a positive trend in earnings expectations [8].

Core Viewpoint - Advance Auto Parts is positioning itself for sustainable growth by simplifying its structure and increasing store count, targeting 30 new stores in 2025 and an additional 100 by the end of 2027, representing nearly a 3% increase in store presence [1] Group 1: Financial Performance and Projections - The stock is currently trading at $34.86, down 4.80% with a 52-week range of $33.08 to $79.85, and a dividend yield of 2.87% [2] - Analysts predict a return to growth in the next fiscal year with adjusted earnings expected to grow at a double-digit CAGR through the middle of the next decade [3] - The company has faced challenges with growth and operational quality, leading to an 85% cut in dividends, which were previously increased aggressively starting in 2020 [2] Group 2: Market Sentiment and Insider Activity - Insider buying activity has increased, with notable purchases from the CEO and a director, indicating confidence in the company's future [4] - Institutional investors have consistently bought the stock since Q4 2023, owning nearly 90% of the stock, providing a solid support base [5] - Analysts have a Hold rating on the stock, with a price target reset that suggests a potential 20% upside [5] Group 3: Short Interest and Market Dynamics - Short interest remains high, down from peaks in 2021 and 2022, but could lead to a short-covering rally if growth resumes [6] - The stock is trading at a 15-year low, indicating deep value, with signs of a potential market reversal [7] - A rebound could see the stock reclaim highs set in 2024, representing a potential 100% upside, although resistance is noted near $45.75 [8]

It has been about a month since the last earnings report for Advance Auto Parts (AAP) . Shares have added about 9.2% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Advance Auto Parts due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving Si ...

Appoints Tony Iskander as Interim Chief Financial Officer and TreasurerPromotes Naomi Cramer to Chief Retail Operations and Talent Officer PHOENIX, March 17, 2025 (GLOBE NEWSWIRE) -- Leslie's, Inc. (("Leslie's", "we", "our", "its", or "Company", NASDAQ:LESL), the largest and most trusted direct-to-customer brand in the U.S. pool and spa care industry serving residential customers and pool professionals nationwide, today announced a series of senior leadership changes as part of the Company's ongoing work t ...

At Investors' Edge, we specialise in identifying undervalued companies with strong fundamentals and great growth potential. Our rigorous value investing approach combines thorough fundamental analysis with a focus on companies trading significantly below their intrinsic value.We prioritise businesses with robust cash flows, strong balance sheets, and competent management teams while maintaining a long-term investment horizon that allows our thesis to materialise. Through disciplined research and patience, w ...

Core Viewpoint - Advance Auto Parts has experienced a significant decline in stock value due to disappointing fourth-quarter earnings and 2025 guidance, indicating ongoing operational challenges that need to be addressed for recovery [1][6]. Group 1: Financial Performance - The stock of Advance Auto Parts fell by 23.9% in February following the release of disappointing fourth-quarter 2024 earnings [1]. - The company reported an operating loss of $99.4 million for the fourth quarter, with same-store sales declining by 1% year over year [6]. - The 2025 guidance projects same-store sales growth of only 0.5%-1.5%, an adjustable operating income margin from continuing operations of 2%-3%, and a cash outflow ranging from $25 million to $85 million [6]. Group 2: Operational Challenges - Advance Auto Parts has struggled to improve its operational metrics to be on par with competitors like O'Reilly Automotive and AutoZone, which is essential for stock appreciation [2]. - The company has reiterated strategic priorities over the past decade, including sourcing products strategically, enhancing parts availability, and consolidating distribution centers, but has not made significant progress [4]. - The company continues to lag behind peers in terms of cash flow and receivables turnover, indicating inefficiencies in collecting cash from customers [5]. Group 3: Investor Sentiment - Despite the current challenges, Advance Auto Parts may still represent a value opportunity, but investors are looking for clear evidence of improvement in operational metrics before making new investments [7].

JPMorgan analyst Christopher Horvers reiterated the Neutral rating on Advance Auto Parts Inc. AAP, with a price forecast of $41.Yesterday, the company reported fourth-quarter adjusted earnings per share of $1.18 loss, which is in line with the analyst consensus estimate. Quarterly sales of $2 billion (down 0.9% year over year) outpaced the street view of $1.93 billion. Comparable store sales for the fourth quarter decreased 1.0%.The analyst maintains a Neutral rating, noting Advance Auto Parts is losing mar ...