Advance Auto Parts Earnings Preview

Motley Fool Staff
Updated

Investors hope Advance Auto Parts (NYS: AAP) will top analyst estimates once again after beating predictions by $0.07 in the previous quarter. The company will unveil its latest earnings on Wednesday, Nov. 9. Advance Auto Parts is a specialty retailer of automotive aftermarket parts, accessories, batteries, and maintenance items, mainly operating within the United States.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Advance Auto Parts with nine of 16 analysts rating it hold. Analysts don't like Advance Auto Parts as much as competitor Pep Boys - Manny, Moe & Jack overall. Four out of six analysts rate Pep Boys a buy compared to six of 16 for Advance Auto Parts. Analysts still rate the stock a hold, but they are a bit more wary about it compared to three months ago.

  • Revenue forecasts: On average, analysts predict $1.46 billion in revenue this quarter. That would represent a rise of 3.5% from the year-ago quarter.

  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.19 per share. Estimates range from $1.08 to $1.28.

What our community says:
CAPS All-Stars are solidly behind the stock with 94.4% giving it an "outperform" rating. The community at large backs the All-Stars with 90.8% awarding it a rating of "outperform." Fools have embraced Advance Auto Parts, though the message boards have been quiet lately with only 77 posts in the past 30 days. Despite the majority sentiment in favor of Advance Auto Parts, the stock has a middling CAPS rating of three out of five stars.

Management:
Advance Auto Parts' profit has risen year over year by an average of 23.3% over the past five quarters. Revenue has now gone up for three straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

49.7%

50.5%

49.4%

50.3%

Operating Margin

12.8%

9.8%

6.6%

10.5%

Net Margin

7.6%

5.8%

3.8%

6.2%

For all our Advance Auto Parts-specific analysis, including earnings and beyond, add Advance Auto Parts to My Watchlist.

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At the time thisarticle was published

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