Advance Auto Parts Stock: A Classic Rebound Play in the Making

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]