AAP Intrinsic Value

AAP

Advance Auto Parts Inc – Automotive Parts and Accessories Stores

founded in roanoke, va in 1932, advance auto parts is a leading automotive aftermarket parts provider that serves both professional installer and do-it-yourself customers. our family of companies operate more than 5,100 stores across the united states, canada, puerto rico and the virgin islands under four brands, advance auto parts, carquest auto parts, worldpac and autopart international. when you join our team, you become one of more than 70,000 knowledgeable and experienced team members who are proud to provide outstanding service to our customers, communities and each other every day. at advance, we know our people make the biggest difference in our customers’ service experience. from opportunities in our stores to our rapidly growing business to professional installers to distribution centers and corporate store support, we have a career for you. with our nationwide presence, helpful advice and access to thousands of parts, advance is proud to keep advancing a world in motion for

Analysis Results

Intrinsic Value	$122.53
Latest Price	$66.26
Relative Value	46% undervalued

Share results:

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Cash Flow (Billions)

Analysis Parameters

New Ticker

Analysis Details

Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -3.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.0%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -3.0%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year	Future flow (billion)	Present value (billion)
2023	0.456	0.426
2024	0.442	0.386
2025	0.428	0.35
2026	0.415	0.317
2027	0.403	0.287

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 8.24 billion. This corresponds to a present value of 5.5 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1.77 billion. Adding in the terminal value gives a total present value of 7.26 billion.

There are presently 59.3 million outstanding shares, so the intrinsic value per share is 122.53.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	6,046,852,000
Current Cash	269,282,000
Current Liabilities	5,370,389,000
Current Debt	185,000,000
Non-Cash Working Capital (NCWC)	592,181,000
Change in NCWC	98,440,000
EBIT	714,151,000
Tax Provision	146,815,000
Depreciation and Amortization	283,800,000
Capital Expenditure	-425,961,000
Unlevered Free Cash Flow	508,798,767

Current Assets	6,275,476,000
Current Cash	601,428,000
Current Liabilities	5,180,307,000
Current Debt	0
Non-Cash Working Capital (NCWC)	493,741,000
Change in NCWC	-197,353,000
EBIT	838,717,000
Tax Provision	189,817,000
Depreciation and Amortization	259,933,000
Capital Expenditure	-289,639,000
Unlevered Free Cash Flow	414,117,602

Current Assets	6,270,001,000
Current Cash	834,992,000
Current Liabilities	4,743,915,000
Current Debt	0
Non-Cash Working Capital (NCWC)	691,094,000
Change in NCWC	-108,082,000
EBIT	749,907,000
Tax Provision	157,994,000
Depreciation and Amortization	250,081,000
Capital Expenditure	-267,806,000
Unlevered Free Cash Flow	442,106,026

Current Assets	5,695,543,000
Current Cash	418,665,000
Current Liabilities	4,477,702,000
Current Debt	0
Non-Cash Working Capital (NCWC)	799,176,000
Change in NCWC	-500,801,000
EBIT	677,180,000
Tax Provision	150,850,000
Depreciation and Amortization	238,371,000
Capital Expenditure	-270,129,000
Unlevered Free Cash Flow	-15,556,567

Current Assets	6,082,454,000
Current Cash	896,527,000
Current Liabilities	3,885,950,000
Current Debt	0
Non-Cash Working Capital (NCWC)	1,299,977,000
Change in NCWC	-99,881,000
EBIT	604,275,000
Tax Provision	131,417,000
Depreciation and Amortization	238,184,000
Capital Expenditure	-193,715,000
Unlevered Free Cash Flow	405,846,331

Current Assets	5,426,892,000
Current Cash	546,937,000
Current Liabilities	3,480,097,000
Current Debt	0
Non-Cash Working Capital (NCWC)	1,399,858,000
Change in NCWC	38,012,000
EBIT	570,212,000
Tax Provision	44,754,000
Depreciation and Amortization	249,260,000
Capital Expenditure	-189,758,000
Unlevered Free Cash Flow	618,674,916

Current Assets	5,172,764,000
Current Cash	135,178,000
Current Liabilities	3,676,046,000
Current Debt	306,000
Non-Cash Working Capital (NCWC)	1,361,846,000
Change in NCWC	308,761,000
EBIT	787,598,000
Tax Provision	279,213,000
Depreciation and Amortization	258,387,000
Capital Expenditure	-259,559,000
Unlevered Free Cash Flow	797,545,983

Current Assets	4,940,746,000
Current Cash	90,782,000
Current Liabilities	3,797,477,000
Current Debt	598,000
Non-Cash Working Capital (NCWC)	1,053,085,000
Change in NCWC	159,200,000
EBIT	825,780,000
Tax Provision	279,490,000
Depreciation and Amortization	269,476,000
Capital Expenditure	-234,747,000
Unlevered Free Cash Flow	713,159,749

Current Assets	4,741,040,000
Current Cash	104,671,000
Current Liabilities	3,743,066,000
Current Debt	582,000
Non-Cash Working Capital (NCWC)	893,885,000
Change in NCWC	780,841,000
EBIT	851,710,000
Tax Provision	287,569,000
Depreciation and Amortization	284,693,000
Capital Expenditure	-228,446,000
Unlevered Free Cash Flow	1,375,351,271

Current Assets	3,989,384,000
Current Cash	1,112,471,000
Current Liabilities	2,764,785,000
Current Debt	916,000
Non-Cash Working Capital (NCWC)	113,044,000
Change in NCWC	85,966,000
EBIT	660,318,000
Tax Provision	234,640,000
Depreciation and Amortization	207,795,000
Capital Expenditure	-195,757,000
Unlevered Free Cash Flow	510,976,038

Current Assets	3,184,200,000
Current Cash	598,111,000
Current Liabilities	2,559,638,000
Current Debt	627,000
Non-Cash Working Capital (NCWC)	27,078,000
Change in NCWC	-21,814,000
EBIT	657,315,000
Tax Provision	236,404,000
Depreciation and Amortization	189,544,000
Capital Expenditure	-271,182,000
Unlevered Free Cash Flow	304,867,055

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