MODEL VERDICT
Advance Auto Parts, Inc. (AAP) — Relative Valuation
Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| Feb 28, 2026 | NEUTRAL | 0.37 | $53.17 | CURRENT | — |
| Feb 21, 2026 | NEUTRAL | 0.21 | $55.87 | CURRENT | — |
| Feb 14, 2026 | MODERATE | 0.60 | $58.85 | CURRENT | — |
| Feb 11, 2026 | MODERATE | 0.60 | $56.60 | CURRENT | — |
| Jan 11, 2026 | MODERATE | 0.62 | $43.84 | Pending | +26.1% |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 43 analyst estimates | $57.67 | +8.5% | 20% | A- | Analyst Est. |
| EV/EBITDA 40 industry peers | $64.31 | +21.0% | 20% | A- | Peer Data |
| Industry Median P/E 36 industry peers | $21.36 | -59.8% | 15% | A | Peer Data |
| EV/EBIT 40 industry peers | $11.18 | -79.0% | 8% | B+ | Peer Data |
| EV To Revenue 51 industry peers | $200.56 | +277.2% | 4% | B | Data |
| Price / Sales 51 industry peers | $194.79 | +266.4% | 3% | B | Model Driven |
| Earnings Yield 36 industry peers | $21.36 | -59.8% | 2% | B | Data |
| Weighted Output Blended model output | $58.37 | +9.8% | 100% | 67 | SLIGHTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 61× | 67× | 73× (Current) | 79× | 85× |
|---|---|---|---|---|---|
| Bear Case (2%) | $45 | $50 | $54 | $59 | $63 |
| Conservative (5%) | $47 | $51 | $56 | $61 | $65 |
| Base Case (-36.6%) | $28 | $31 | $34 | $37 | $39 |
| Bull Case (-49%) | $23 | $25 | $27 | $29 | $31 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 44.28 | 24.27 | 19.22 | 122.06 | 40.16 |
| EV/EBIT | 47.36 | 23.16 | 18.74 | 170.94 | 60.63 |
| EV/EBITDA | 15.64 | 15.47 | 10.35 | 22.63 | 4.13 |
| P/FCF | 29.76 | 26.58 | 15.48 | 58.96 | 17.21 |
| P/FFO | 13.44 | 13.58 | 7.54 | 18.07 | 3.61 |
| P/TBV | 5.67 | 5.77 | 1.99 | 10.43 | 3.20 |
| P/AFFO | 31.72 | 27.86 | 22.86 | 49.50 | 10.00 |
| P/B Ratio | 2.64 | 3.05 | 1.08 | 4.95 | 1.42 |
| Div Yield | 0.02 | 0.02 | 0.00 | 0.06 | 0.02 |
| P/S Ratio | 0.80 | 0.98 | 0.28 | 1.41 | 0.46 |
Based on our peer multiples analysis with 18 valuation metrics, the model estimates AAP's fair value at $58.37 vs the current price of $53.17, implying +9.8% upside potential. Model verdict: Slightly Undervalued. Confidence: 67/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $58.37 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $51.20 (P10) to $82.35 (P90), with a median of $66.18.
AAP's current P/E of 72.8x compares to the industry median of 29.3x (36 peers in the group). This represents a +149.0% premium to the industry. The historical average P/E is 44.3x over 6 years. Signal: High Premium.
44 analysts cover AAP with a consensus rating of Hold. The consensus price target is $56.40 (range: $40.00 — $63.00), implying +6.1% upside from the current price. Grade breakdown: Strong Buy (0), Buy (12), Hold (27), Sell (5), Strong Sell (0).
The model confidence score is 67/100, based on: data completeness (18), peer quality (25), historical depth (20), earnings stability (4), and model agreement (10). Cyclicality penalty: --10 points. The model shows moderate agreement across inputs.
The model flags several key risks: (1) Multiple compression: AAP trades at the 8330th percentile of its historical P/E range. A reversion to median (44.3×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that AAP's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -0.2σ, meaning margins are 0.2 standard deviations below their historical average. If margins revert to the 6-year mean (3.1%), the model estimates fair value drops by 26700.0% to approximately $195. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.