Advance Auto Parts, Inc.

AAP

Consumer CyclicalSpecialty RetailNYSE

$51.83

Market Cap: $3.13B

Advance Auto Parts, Inc. (AAP) Valuation Summary

Updated Apr 28, 2026 22:22

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$0.51 – $1,419.19	$29.07	-48.6%
Growth Exit 10Y	$5.81 – $1,518.56	$36.72	-35.1%
EBITDA Exit 5Y	$19.55 – $81.05	$47.68	-15.8%
EBITDA Exit 10Y	$15.60 – $78.32	$42.19	-25.5%
▸ Trading Multiples
P/E	$9.91 – $15.30	$26.59	-53.0%
EV/EBITDA	$8.27 – $80.79	$30.47	-46.2%
EV/Revenue	$84.22 – $294.50	$130.08	+129.8%
▸ PEG
PEG Fair Value	$68.90 – $68.90	$68.90	+21.7%
▸ Earnings Power Value
Earnings Power Value	$0.07 – $25.32	$9.33	-83.5%
▸ Dividend Discount
Dividend Discount	$8.72 – $15.24	$10.73	-81.1%

Valuation History

DCF Analysis

Fair Value

$29.07

Market Price

$51.83

Upside / Downside

-43.9%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Advance Auto Parts, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -6.0% to 3.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 246, DIO 283). At a 5.6% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $29.07 per share, suggesting AAP is overvalued by 43.9% at the current price of $51.83.

FCFF Present Value Calculation

WACC

5.63%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	111	118	120	123	127	130
(−) Net Interest	71	75	76	78	81	83
(+) D&A	270	258	227	233	248	254
EBITDA	452	450	424	434	455	467

(−) Tax	25	27	27	28	29	30
(−) CapEx	233	246	252	258	265	272
(−) ΔWC	-70	55	26	23	33	34
Free Cash Flow (FCFF)	264	123	119	125	128	131

Terminal Value						4,189
WACC / Discount Rate	5.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	257	113	104	103	100	3,186

Enterprise Value	3,863
Projection Period	676	17.5%
Terminal Value	3,186	82.5%

(−) Current Net Debt	2,101

Equity Value	1,762
(/) Outstanding Shares	61

Fair Price	$29.07

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
3.6%	$62	$88	$138	$266	$1419
4.6%	$32	$42	$58	$83	$130
5.6%	$16	$22	$29	$39	$54
6.6%	$7	$10	$14	$20	$26
7.6%	$1	$3	$5	$8	$12

Current price: $51.83. Green = undervalued, Red = overvalued.

Fair Value

$36.72

Market Price

$51.83

Upside / Downside

-29.2%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Advance Auto Parts, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -6.0% to 1.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 246, DIO 283). At a 5.6% WACC with mid-year discounting, the terminal value (71% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $36.72 per share, suggesting AAP is overvalued by 29.2% at the current price of $51.83.

FCFF Present Value Calculation

WACC

5.63%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	111	118	120	123	127	131	127	125	125	127	130
(−) Net Interest	71	75	76	78	81	83	80	79	79	80	82
(+) D&A	270	258	227	233	248	251	259	263	265	265	272
EBITDA	452	450	424	434	455	464	466	467	469	473	484

(−) Tax	25	27	27	28	29	30	29	28	28	29	30
(−) CapEx	233	246	252	258	265	273	265	261	261	265	272
(−) ΔWC	-70	55	26	23	33	33	-34	-17	0	17	17
Free Cash Flow (FCFF)	264	123	119	125	128	128	206	194	179	162	166

Terminal Value											5,312
WACC / Discount Rate	5.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	257	113	104	103	100	95	145	129	112	96	3,073

Enterprise Value	4,326
Projection Period	1,253	29.0%
Terminal Value	3,073	71.0%

(−) Current Net Debt	2,101

Equity Value	2,225
(/) Outstanding Shares	61

Fair Price	$36.72

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
3.6%	$78	$106	$158	$295	$1519
4.6%	$43	$53	$69	$94	$142
5.6%	$24	$30	$37	$46	$61
6.6%	$13	$16	$20	$25	$31
7.6%	$6	$8	$10	$13	$16

Current price: $51.83. Green = undervalued, Red = overvalued.

Fair Value

$47.68

Market Price

$51.83

Upside / Downside

-8.0%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Advance Auto Parts, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -6.0% to 3.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 246, DIO 283). At a 5.6% WACC with mid-year discounting, the terminal value (86% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $47.68 per share, suggesting AAP is fairly valued by 8.0% at the current price of $51.83.

FCFF Present Value Calculation

WACC

5.63%

3% – 20%

EV/EBITDA Exit Multiple

12.15x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	111	118	120	123	127	130
(−) Net Interest	71	75	76	78	81	83
(+) D&A	270	258	227	233	248	254
EBITDA	452	450	424	434	455	467

(−) Tax	25	27	27	28	29	—
(−) CapEx	233	246	252	258	265	—
(−) ΔWC	-70	55	26	23	33	—
Free Cash Flow (FCF)	264	123	119	125	128	—

Peers' EBITDA Multiple						12.2x
Terminal Value						5,672
WACC / Discount Rate	5.63%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	257	113	104	103	100	4,314

Enterprise Value	4,990
Projection Period	676	13.6%
Terminal Value	4,314	86.4%

(−) Current Net Debt	2,101
Equity Value	2,889
(÷) Outstanding Shares	61M
Fair Price	$48	-8.0%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	8.1x	10.1x	12.1x	14.1x	16.1x
3.6%	$29	$42	$55	$68	$81
4.6%	$27	$39	$51	$64	$76
5.6%	$24	$36	$48	$59	$71
6.6%	$22	$33	$44	$55	$67
7.6%	$20	$30	$41	$52	$62

Current price: $51.83. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$42.19

Market Price

$51.83

Upside / Downside

-18.6%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Advance Auto Parts, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -6.0% to 1.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 246, DIO 283). At a 5.6% WACC with mid-year discounting, the terminal value (73% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.2x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $42.19 per share, suggesting AAP is overvalued by 18.6% at the current price of $51.83.

FCFF Present Value Calculation

WACC

5.63%

3% – 20%

EV/EBITDA Exit Multiple

12.15x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	111	118	120	123	127	131	127	125	125	127	130
(−) Net Interest	71	75	76	78	81	83	80	79	79	80	82
(+) D&A	270	258	227	233	248	251	259	263	265	265	272
EBITDA	452	450	424	434	455	464	466	467	469	473	484

(−) Tax	25	27	27	28	29	30	29	28	28	29	—
(−) CapEx	233	246	252	258	265	273	265	261	261	265	—
(−) ΔWC	-70	55	26	23	33	33	-34	-17	0	17	—
Free Cash Flow (FCF)	264	123	119	125	128	128	206	194	179	162	—

Peers' EBITDA Multiple											12.2x
Terminal Value											5,885
WACC / Discount Rate	5.63%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	257	113	104	103	100	95	145	129	112	96	3,405

Enterprise Value	4,658
Projection Period	1,253	26.9%
Terminal Value	3,405	73.1%

(−) Current Net Debt	2,101
Equity Value	2,557
(÷) Outstanding Shares	61M
Fair Price	$42	-18.6%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	8.1x	10.1x	12.1x	14.1x	16.1x
3.6%	$34	$45	$56	$67	$78
4.6%	$28	$39	$49	$59	$69
5.6%	$24	$33	$42	$51	$61
6.6%	$19	$28	$36	$45	$53
7.6%	$16	$23	$31	$39	$46

Current price: $51.83. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$26.69

Market Price

$51.83

Upside / Downside

-48.5%

Verdict

Overvalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Advance Auto Parts, Inc. (AAP) has a fair value of $26.69 based on 7 comparable companies in the Specialty Retail industry.

P/E Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Advance Auto Parts, Inc.AAP	3,141	71.0x	18.7x
Victoria's Secret & Co.VSCO	4,163	26.8x	21.9x
Academy Sports and Outdoors, Inc.ASO	3,509	9.8x	9.3x
Columbia Sportswear CompanyCOLM	3,198	18.9x	19.2x
Visteon CorporationVC	2,946	15.2x	12.8x
The Buckle, Inc.BKE	2,912	13.7x	15.1x
American Eagle Outfitters, Inc.AEO	2,895	15.9x	10.2x
RhRH	2,504	21.1x	23.0x
Industry Median		15.9x	15.1x
(*) Profit after tax		44	168
Equity Value		701	2,533
(/) Outstanding shares		61	61
Fair Price		$12	$42

Selected Fair Value (avg of trailing + forward)

$26.69

-48.5%

Fair Value

$30.49

Market Price

$51.83

Upside / Downside

-41.2%

Verdict

Overvalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Advance Auto Parts, Inc. (AAP) has a fair value of $30.49 based on 8 comparable companies in the Specialty Retail industry.

EV/EBITDA Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Advance Auto Parts, Inc.AAP	3,141	16.4x	16.5x
Victoria's Secret & Co.VSCO	4,163	21.9x	23.1x
Academy Sports and Outdoors, Inc.ASO	3,509	8.0x	7.9x
Columbia Sportswear CompanyCOLM	3,198	12.6x	12.8x
Visteon CorporationVC	2,946	6.0x	6.0x
The Buckle, Inc.BKE	2,912	11.7x	12.4x
American Eagle Outfitters, Inc.AEO	2,895	8.1x	8.4x
RhRH	2,504	16.6x	17.9x
Peloton Interactive, Inc.PTON	2,155	28.5x	29.2x
Industry Median		12.1x	12.6x
(*) EBITDA		320	318
= Enterprise Value		3,888	4,010
(-) Net Debt		2,101	2,101
Equity Value		1,787	1,909
(/) Outstanding shares		61	61
Fair Price		$29	$31

Selected Fair Value (avg of trailing + forward)

$30.49

-41.2%

Fair Value

$130.15

Market Price

$51.83

Upside / Downside

+151.1%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Advance Auto Parts, Inc. (AAP) has a fair value of $130.15 based on 10 comparable companies in the Specialty Retail industry.

EV/Revenue Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Advance Auto Parts, Inc.AAP	3,141	0.6x	0.6x
Victoria's Secret & Co.VSCO	4,163	1.0x	1.0x
Academy Sports and Outdoors, Inc.ASO	3,509	0.8x	0.8x
Columbia Sportswear CompanyCOLM	3,198	1.1x	1.1x
Visteon CorporationVC	2,946	0.7x	0.7x
The Buckle, Inc.BKE	2,912	2.3x	2.5x
American Eagle Outfitters, Inc.AEO	2,895	0.8x	0.8x
RhRH	2,504	1.9x	2.0x
Peloton Interactive, Inc.PTON	2,155	1.2x	1.3x
Driven Brands Holdings Inc.DRVN	2,067	2.5x	3.1x
Six Flags Entertainment CorporationFUN	1,854	2.3x	2.4x
Industry Median		1.2x	1.2x
(*) Revenue		8,601	8,551
= Enterprise Value		9,924	10,052
(-) Net Debt		2,101	2,101
Equity Value		7,823	7,951
(/) Outstanding shares		61	61
Fair Price		$129	$131

Selected Fair Value (avg of trailing + forward)

$130.15

+151.1%

PEG Fair Value

Fair Value

$68.90

Market Price

$51.83

Upside / Downside

+32.9%

Verdict

Undervalued

Using the PEG framework with analyst consensus forward EPS growth of 25.0% plus 1.8% dividend yield, the company has a fair value of $68.90 based on NTM EPS (FY2027) of $2.76. The current PEG ratio is 0.54.

PEG Ratio

0.54Deep Value

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 20.5 ÷ (36.0% + 1.8%) = 0.54

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG moderately applicable

Growth above 25% is capped — hypergrowth may not be sustainable long-term.

Fair Value Calculation

EPS Growth RateForward	36.0%
Dividend Yield	+1.8%
Adjusted Growth (clamped 8–25%)Clamped	25.0%
Fair P/E	25.0x
NTM EPS (FY2027)	$2.76
Fair Value	$68.90

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$0.73	—	—
FY2027E	$2.76	+277.5%	17
FY2028E	$3.95	+43.4%	17
FY2029E	$4.81	+21.6%	8
FY2030E	$4.34	-9.6%	7
FY2031E	$4.62	+6.2%	6

6Y Forward EPS CAGR: 36.0%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$596.6M	$9.55	—
FY2022	$464.4M	$7.65	-19.9%
FY2023	$30.0M	$0.50	-93.5%
FY2024	$-336.0M	$-5.63	-1226.0%
FY2025	$44.0M	$0.73	—

4Y Historical EPS CAGR: -47.4%

Earnings Power Value

Fair Value

$9.33

Market Price

$51.83

Upside / Downside

-82.0%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 5.6% and normalized earnings of $150.0M, the company has a fair value of $9.33 per share. The EPV range is $0.07 – $25.32 based on WACC sensitivity (4.1% – 7.1%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	150	150	150
(/) WACC	7.1%	5.6%	4.1%
Enterprise Value	2,105	2,666	3,636
(-) Net debt	2,101	2,101	2,101
Equity Value	4	565	1,535
(/) Outstanding shares	61	61	61
Fair Price	$0.07	$9.33	$25.32

Dividend Discount Model

Fair Value

$10.73

Market Price

$51.83

Upside / Downside

-79.3%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 11.0% and projected dividend growth of 0.0%, the fair value is $10.73 per share. The DDM range is $8.72 – $15.24 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$0.99

Dividend Yield

1.76%

Payout Ratio

136.4%

Dividend Coverage

0.73x

DPS CAGR (4Y)-20.6%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.99	136.4%	-1.3%
2024	$1.00	—	-71.4%
2023	$3.51	697.6%	-36.6%
2022	$5.54	72.4%	+122.0%
2021	$2.49	27.0%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.99	0.0%	0.9008	$0.89
2027	$0.99	0.0%	0.8114	$0.80
2028	$0.99	0.0%	0.7309	$0.72
2029	$0.99	0.0%	0.6584	$0.65
2030	$0.99	0.0%	0.5930	$0.59
Terminal Value	$1.01 DPS	2.5%		$7.07

PV of Projected Dividends$3.66

PV of Terminal Value$7.07

Fair Value per Share$10.73

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	0.0%	0.0%	0.0%	1.0%	2.0%
9.0%	$14	$14	$14	$15	$15
10.0%	$12	$12	$12	$13	$13
11.0%	$11	$11	$11	$11	$12
12.0%	$10	$10	$10	$10	$10
13.0%	$9	$9	$9	$9	$9

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Advance Auto Parts, Inc. (AAP) Valuation Summary

Updated Apr 28, 2026 22:22

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$0.51 – $1,419.19	$29.07	-48.6%
Growth Exit 10Y	$5.81 – $1,518.56	$36.72	-35.1%
EBITDA Exit 5Y	$19.55 – $81.05	$47.68	-15.8%
EBITDA Exit 10Y	$15.60 – $78.32	$42.19	-25.5%
▸ Trading Multiples
P/E	$9.91 – $15.30	$26.59	-53.0%
EV/EBITDA	$8.27 – $80.79	$30.47	-46.2%
EV/Revenue	$84.22 – $294.50	$130.08	+129.8%
▸ PEG
PEG Fair Value	$68.90 – $68.90	$68.90	+21.7%
▸ Earnings Power Value
Earnings Power Value	$0.07 – $25.32	$9.33	-83.5%
▸ Dividend Discount
Dividend Discount	$8.72 – $15.24	$10.73	-81.1%

Valuation History

DCF Analysis

Fair Value

$29.07

Market Price

$51.83

Upside / Downside

-43.9%

Verdict

Overvalued

FCFF Present Value Calculation

WACC

5.63%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	111	118	120	123	127	130
(−) Net Interest	71	75	76	78	81	83
(+) D&A	270	258	227	233	248	254
EBITDA	452	450	424	434	455	467

(−) Tax	25	27	27	28	29	30
(−) CapEx	233	246	252	258	265	272
(−) ΔWC	-70	55	26	23	33	34
Free Cash Flow (FCFF)	264	123	119	125	128	131

Terminal Value						4,189
WACC / Discount Rate	5.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	257	113	104	103	100	3,186

Enterprise Value	3,863
Projection Period	676	17.5%
Terminal Value	3,186	82.5%

(−) Current Net Debt	2,101

Equity Value	1,762
(/) Outstanding Shares	61

Fair Price	$29.07

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
3.6%	$62	$88	$138	$266	$1419
4.6%	$32	$42	$58	$83	$130
5.6%	$16	$22	$29	$39	$54
6.6%	$7	$10	$14	$20	$26
7.6%	$1	$3	$5	$8	$12

Current price: $51.83. Green = undervalued, Red = overvalued.

Fair Value

$36.72

Market Price

$51.83

Upside / Downside

-29.2%

Verdict

Overvalued

FCFF Present Value Calculation

WACC

5.63%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	111	118	120	123	127	131	127	125	125	127	130
(−) Net Interest	71	75	76	78	81	83	80	79	79	80	82
(+) D&A	270	258	227	233	248	251	259	263	265	265	272
EBITDA	452	450	424	434	455	464	466	467	469	473	484

(−) Tax	25	27	27	28	29	30	29	28	28	29	30
(−) CapEx	233	246	252	258	265	273	265	261	261	265	272
(−) ΔWC	-70	55	26	23	33	33	-34	-17	0	17	17
Free Cash Flow (FCFF)	264	123	119	125	128	128	206	194	179	162	166

Terminal Value											5,312
WACC / Discount Rate	5.6%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	257	113	104	103	100	95	145	129	112	96	3,073

Enterprise Value	4,326
Projection Period	1,253	29.0%
Terminal Value	3,073	71.0%

(−) Current Net Debt	2,101

Equity Value	2,225
(/) Outstanding Shares	61

Fair Price	$36.72

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
3.6%	$78	$106	$158	$295	$1519
4.6%	$43	$53	$69	$94	$142
5.6%	$24	$30	$37	$46	$61
6.6%	$13	$16	$20	$25	$31
7.6%	$6	$8	$10	$13	$16

Current price: $51.83. Green = undervalued, Red = overvalued.

Fair Value

$47.68

Market Price

$51.83

Upside / Downside

-8.0%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Advance Auto Parts, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -6.0% to 3.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 246, DIO 283). At a 5.6% WACC with mid-year discounting, the terminal value (86% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $47.68 per share, suggesting AAP is fairly valued by 8.0% at the current price of $51.83.

FCFF Present Value Calculation

WACC

5.63%

3% – 20%

EV/EBITDA Exit Multiple

12.15x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	111	118	120	123	127	130
(−) Net Interest	71	75	76	78	81	83
(+) D&A	270	258	227	233	248	254
EBITDA	452	450	424	434	455	467

(−) Tax	25	27	27	28	29	—
(−) CapEx	233	246	252	258	265	—
(−) ΔWC	-70	55	26	23	33	—
Free Cash Flow (FCF)	264	123	119	125	128	—

Peers' EBITDA Multiple						12.2x
Terminal Value						5,672
WACC / Discount Rate	5.63%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	257	113	104	103	100	4,314

Enterprise Value	4,990
Projection Period	676	13.6%
Terminal Value	4,314	86.4%

(−) Current Net Debt	2,101
Equity Value	2,889
(÷) Outstanding Shares	61M
Fair Price	$48	-8.0%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	8.1x	10.1x	12.1x	14.1x	16.1x
3.6%	$29	$42	$55	$68	$81
4.6%	$27	$39	$51	$64	$76
5.6%	$24	$36	$48	$59	$71
6.6%	$22	$33	$44	$55	$67
7.6%	$20	$30	$41	$52	$62

Current price: $51.83. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$42.19

Market Price

$51.83

Upside / Downside

-18.6%

Verdict

Overvalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Advance Auto Parts, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from -6.0% to 1.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 23, DPO 246, DIO 283). At a 5.6% WACC with mid-year discounting, the terminal value (73% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 12.2x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $42.19 per share, suggesting AAP is overvalued by 18.6% at the current price of $51.83.

FCFF Present Value Calculation

WACC

5.63%

3% – 20%

EV/EBITDA Exit Multiple

12.15x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	111	118	120	123	127	131	127	125	125	127	130
(−) Net Interest	71	75	76	78	81	83	80	79	79	80	82
(+) D&A	270	258	227	233	248	251	259	263	265	265	272
EBITDA	452	450	424	434	455	464	466	467	469	473	484

(−) Tax	25	27	27	28	29	30	29	28	28	29	—
(−) CapEx	233	246	252	258	265	273	265	261	261	265	—
(−) ΔWC	-70	55	26	23	33	33	-34	-17	0	17	—
Free Cash Flow (FCF)	264	123	119	125	128	128	206	194	179	162	—

Peers' EBITDA Multiple											12.2x
Terminal Value											5,885
WACC / Discount Rate	5.63%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	257	113	104	103	100	95	145	129	112	96	3,405

Enterprise Value	4,658
Projection Period	1,253	26.9%
Terminal Value	3,405	73.1%

(−) Current Net Debt	2,101
Equity Value	2,557
(÷) Outstanding Shares	61M
Fair Price	$42	-18.6%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	8.1x	10.1x	12.1x	14.1x	16.1x
3.6%	$34	$45	$56	$67	$78
4.6%	$28	$39	$49	$59	$69
5.6%	$24	$33	$42	$51	$61
6.6%	$19	$28	$36	$45	$53
7.6%	$16	$23	$31	$39	$46

Current price: $51.83. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$26.69

Market Price

$51.83

Upside / Downside

-48.5%

Verdict

Overvalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Advance Auto Parts, Inc. (AAP) has a fair value of $26.69 based on 7 comparable companies in the Specialty Retail industry.

P/E Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Advance Auto Parts, Inc.AAP	3,141	71.0x	18.7x
Victoria's Secret & Co.VSCO	4,163	26.8x	21.9x
Academy Sports and Outdoors, Inc.ASO	3,509	9.8x	9.3x
Columbia Sportswear CompanyCOLM	3,198	18.9x	19.2x
Visteon CorporationVC	2,946	15.2x	12.8x
The Buckle, Inc.BKE	2,912	13.7x	15.1x
American Eagle Outfitters, Inc.AEO	2,895	15.9x	10.2x
RhRH	2,504	21.1x	23.0x
Industry Median		15.9x	15.1x
(*) Profit after tax		44	168
Equity Value		701	2,533
(/) Outstanding shares		61	61
Fair Price		$12	$42

Selected Fair Value (avg of trailing + forward)

$26.69

-48.5%

Fair Value

$30.49

Market Price

$51.83

Upside / Downside

-41.2%

Verdict

Overvalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Advance Auto Parts, Inc. (AAP) has a fair value of $30.49 based on 8 comparable companies in the Specialty Retail industry.

EV/EBITDA Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Advance Auto Parts, Inc.AAP	3,141	16.4x	16.5x
Victoria's Secret & Co.VSCO	4,163	21.9x	23.1x
Academy Sports and Outdoors, Inc.ASO	3,509	8.0x	7.9x
Columbia Sportswear CompanyCOLM	3,198	12.6x	12.8x
Visteon CorporationVC	2,946	6.0x	6.0x
The Buckle, Inc.BKE	2,912	11.7x	12.4x
American Eagle Outfitters, Inc.AEO	2,895	8.1x	8.4x
RhRH	2,504	16.6x	17.9x
Peloton Interactive, Inc.PTON	2,155	28.5x	29.2x
Industry Median		12.1x	12.6x
(*) EBITDA		320	318
= Enterprise Value		3,888	4,010
(-) Net Debt		2,101	2,101
Equity Value		1,787	1,909
(/) Outstanding shares		61	61
Fair Price		$29	$31

Selected Fair Value (avg of trailing + forward)

$30.49

-41.2%

Fair Value

$130.15

Market Price

$51.83

Upside / Downside

+151.1%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Advance Auto Parts, Inc. (AAP) has a fair value of $130.15 based on 10 comparable companies in the Specialty Retail industry.

EV/Revenue Valuation — Specialty Retail

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Advance Auto Parts, Inc.AAP	3,141	0.6x	0.6x
Victoria's Secret & Co.VSCO	4,163	1.0x	1.0x
Academy Sports and Outdoors, Inc.ASO	3,509	0.8x	0.8x
Columbia Sportswear CompanyCOLM	3,198	1.1x	1.1x
Visteon CorporationVC	2,946	0.7x	0.7x
The Buckle, Inc.BKE	2,912	2.3x	2.5x
American Eagle Outfitters, Inc.AEO	2,895	0.8x	0.8x
RhRH	2,504	1.9x	2.0x
Peloton Interactive, Inc.PTON	2,155	1.2x	1.3x
Driven Brands Holdings Inc.DRVN	2,067	2.5x	3.1x
Six Flags Entertainment CorporationFUN	1,854	2.3x	2.4x
Industry Median		1.2x	1.2x
(*) Revenue		8,601	8,551
= Enterprise Value		9,924	10,052
(-) Net Debt		2,101	2,101
Equity Value		7,823	7,951
(/) Outstanding shares		61	61
Fair Price		$129	$131

Selected Fair Value (avg of trailing + forward)

$130.15

+151.1%

PEG Fair Value

Fair Value

$68.90

Market Price

$51.83

Upside / Downside

+32.9%

Verdict

Undervalued

PEG Ratio

0.54Deep Value

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 20.5 ÷ (36.0% + 1.8%) = 0.54

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: Fast GrowerPEG moderately applicable

Growth above 25% is capped — hypergrowth may not be sustainable long-term.

Fair Value Calculation

EPS Growth RateForward	36.0%
Dividend Yield	+1.8%
Adjusted Growth (clamped 8–25%)Clamped	25.0%
Fair P/E	25.0x
NTM EPS (FY2027)	$2.76
Fair Value	$68.90

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$0.73	—	—
FY2027E	$2.76	+277.5%	17
FY2028E	$3.95	+43.4%	17
FY2029E	$4.81	+21.6%	8
FY2030E	$4.34	-9.6%	7
FY2031E	$4.62	+6.2%	6

6Y Forward EPS CAGR: 36.0%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$596.6M	$9.55	—
FY2022	$464.4M	$7.65	-19.9%
FY2023	$30.0M	$0.50	-93.5%
FY2024	$-336.0M	$-5.63	-1226.0%
FY2025	$44.0M	$0.73	—

4Y Historical EPS CAGR: -47.4%

Earnings Power Value

Fair Value

$9.33

Market Price

$51.83

Upside / Downside

-82.0%

Verdict

Overvalued

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	150	150	150
(/) WACC	7.1%	5.6%	4.1%
Enterprise Value	2,105	2,666	3,636
(-) Net debt	2,101	2,101	2,101
Equity Value	4	565	1,535
(/) Outstanding shares	61	61	61
Fair Price	$0.07	$9.33	$25.32

Dividend Discount Model

Fair Value

$10.73

Market Price

$51.83

Upside / Downside

-79.3%

Verdict

Overvalued

Dividend Profile

Current DPS

$0.99

Dividend Yield

1.76%

Payout Ratio

136.4%

Dividend Coverage

0.73x

DPS CAGR (4Y)-20.6%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.99	136.4%	-1.3%
2024	$1.00	—	-71.4%
2023	$3.51	697.6%	-36.6%
2022	$5.54	72.4%	+122.0%
2021	$2.49	27.0%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.99	0.0%	0.9008	$0.89
2027	$0.99	0.0%	0.8114	$0.80
2028	$0.99	0.0%	0.7309	$0.72
2029	$0.99	0.0%	0.6584	$0.65
2030	$0.99	0.0%	0.5930	$0.59
Terminal Value	$1.01 DPS	2.5%		$7.07

PV of Projected Dividends$3.66

PV of Terminal Value$7.07

Fair Value per Share$10.73

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	0.0%	0.0%	0.0%	1.0%	2.0%
9.0%	$14	$14	$14	$15	$15
10.0%	$12	$12	$12	$13	$13
11.0%	$11	$11	$11	$11	$12
12.0%	$10	$10	$10	$10	$10
13.0%	$9	$9	$9	$9	$9