Advance Auto Parts (NYSE:AAP) Earnings Preview: Financial Challenges Ahead

Advance Auto Parts (NYSE:AAP) is a leading automotive aftermarket parts provider in North America. The company supplies replacement parts, accessories, and maintenance items for cars and trucks. AAP competes with other major players like AutoZone and O'Reilly Automotive. As the company prepares to release its quarterly earnings on May 22, 2025, investors are keenly watching the anticipated financial results.

Wall Street estimates AAP's earnings per share (EPS) to be -$0.82 for the quarter ending March 2025. The revenue is projected to be approximately $2.51 billion, a decrease of 26.6% from the same quarter last year. These figures highlight the financial challenges AAP is currently facing.

Over the past 30 days, analysts have revised the consensus EPS estimate downward by 3.6%. This revision suggests a reevaluation of AAP's financial performance, which could influence the stock's short-term price movement. If the actual earnings exceed expectations, the stock might see an upward trend. Conversely, if the results fall short, a decline in stock price is likely.

AAP's financial ratios further illustrate its current challenges. The company has a negative price-to-earnings (P/E) ratio of approximately -5.75, indicating negative earnings. The price-to-sales ratio is about 0.20, suggesting the stock is valued at 20 cents for every dolxlar of sales. Additionally, the enterprise value to sales ratio is around 0.38, reflecting the company's total valuation relative to its sales.

The company's debt-to-equity ratio stands at about 1.70, indicating a relatively high level of debt compared to its equity. However, AAP maintains a current ratio of approximately 1.32, suggesting it has a reasonable level of liquidity to cover short-term liabilities. The upcoming earnings report and management's discussion will be crucial in determining the sustainability of any immediate price changes and future earnings projections.