Advance Auto Parts has two competitors: O’Reilly Auto Parts and AutoZone. They are all about the same size:
Advance Auto Parts: 4687 stores. Revenue is 11.2 billion. 68,000 employees.
O’Reilly Auto Parts: 6,000 stores. Revenue is 15.6 billion. 83,600 employees.
AutoZone: 7,140 stores. Revenue is 17.4 billion. 112,000 employees.
But their price to book and P/E is where Advance Auto Parts differs from the other two:
Advance Auto Parts: Price to book is 1.2. P/E is 8.72.
O’Reilly Auto Parts: Price to book is -32.4. P/E is 25.0.
AutoZone: Price to book is -10.3. P/E 19.8
Advance Auto Parts just got a new CEO and he announced that they are selling two of their side companies and laying off 400 employees to cut $100 million in expenses.
Furthermore, we are all still stuck with Bidenomics for another year. There are 4 reasons Americans will have trouble buying new cars and instead will have to repair their existing cars:
- Average credit card balances are at an all-time high, which makes getting a new car loan more difficult. Source
- The number of car loans that are 60 days late is also at an all-time high, which makes getting a new car loan more difficult. Source
- Interest rates are high which increases the price of financing a new car.
- Auto worker unions successfully negotiated higher wages which will increase the price of a new car.
Winter is coming = dead batteries and fender benders.
AAP looks like a buy to me.