Advance Auto Parts Inc Advance Auto Parts Inc W/I (AAP): Price and Financial Metrics

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Advance Auto Parts Inc Advance Auto Parts Inc W/I (AAP) Company Bio

Advance Auto Parts is an automotive aftermarket parts provider in the U.S., serves both the professional installer and do-it-yourself customers. The company was founded in 1929 and is based in Roanoke, Virginia.

AAP Price Forecast Based on DCF Valuation

The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Advance Auto Parts Inc. To summarize, we found that Advance Auto Parts Inc ranked in the 43th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. In terms of the factors that were most noteworthy in this DCF analysis for AAP, they are:

• The company's debt burden, as measured by earnings divided by interest payments, is 14.89 -- which is good for besting 83.97% of its peer stocks (US stocks in the Consumer Cyclical sector with positive cash flow).
• Advance Auto Parts Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 13.23% of tickers in our DCF set.
• AAP's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than merely 13.23% of tickers in our DCF set.

AXL, RH, SIRI, WING, and ZAGG can be thought of as valuation peers to AAP, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.