Advance Story

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AAP -- USA Stock  

USD 146.45  3.66  2.44%

Advance Auto Parts is scheduled to announce its earnings tomorrow. The upcoming quarterly report is expected on the 18th of August 2020. The stock is in a buyout trend. While many traders are getting carried away by overanalyzing services space, it is reasonable to recap Advance Auto under the recent economic conditions. Should we be more optimistic in anticipation of a recovery?
Published over a month ago
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Do analysts have more confidence in Advance Auto (NYSE:AAP) in August?
The company has 4.18 B in debt with debt to equity (D/E) ratio of 1.18, which is OK given its current industry classification.
What is the right price you would pay to acquire a share of Advance Auto? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated. Please read more on our stock advisor page.

What is happening with Advance Auto Parts this year

Annual and quarterly reports issued by Advance Auto Parts are formal financial statements that are published yearly and quarterly and sent to Advance stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934. Companies such as Advance Auto often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How Advance utilizes its cash?

To perform a cash flow analysis of Advance Auto, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Advance Auto is receiving and how much cash it distributes out in a given period. The Advance Auto cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Advance Auto Net Cash Flow from Operations is very stable at the moment as compared to the past year. Advance Auto reported last year Net Cash Flow from Operations of 523.3 Million

Breaking it down a bit more

Earning per share calculations of the firm is based on official Zacks consensus of 8 analysts regarding Advance Auto's future annual earnings. Given the historical accuracy of 92.05%, the future earnings per share of the company is estimated to be 6.4522 with the lowest and highest values of 5.29 and 7.04, respectively. Please note that this consensus of annual earnings estimates for Advance Auto Parts is an estimate of EPS before non-recurring items and including employee stock options expenses.

Is Advance a risky opportunity?

Let's check the volatility. Advance is looking slightly risky at this time. Whether you invest your money or manage your clients' funds, remember that it is easy to forget that behind Advance (NYSE:AAP) stock is an actual business venture. So, do not let stock picking become an abstract concept by ignoring the elementary risk calculations. obtaining a share of an Advance Auto stock makes you a part-owner of that company.

Advance Auto Parts Current Consensus

Here is the recent trade recommendation based on an ongoing consensus estimate among financial analysis covering Advance Auto Parts. The Advance consensus assessment is calculated by taking the average estimates from all of the analysts covering Advance Auto

Strong Buy
Strong Sell
Strong Buy746.67
Strong Sell16.67

Will price continue to roll up in September 2020?

Recent mean deviation is at 1.61. Advance Auto Parts has relatively low volatility with skewness of -0.05 and kurtosis of 0.24. However, we advise all investors to independently investigate Advance Auto Parts to ensure all accessible information is consistent with the expectations about its upside potential and future expected returns.

Our Final Takeaway

Although some companies under the auto parts stores industry are still a bit expensive, Advance Auto may offer a potential longer-term growth to insiders. While some insiders may not share our view we believe it may be a good time to trade Advance as the risk-reward trade off is not appealing enough to hold a position. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Advance Auto.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Advance Auto Parts. Please refer to our Terms of Use for any information regarding our disclosure principles.

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