A month has gone by since the last earnings report for Advance Auto Parts (AAP). Shares have lost about 3.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Advance Auto Parts due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Advance Auto Parts’ Q2 Earnings & Sales Rise Y/Y

Advance Auto Parts reported adjusted earnings of $2.92 per share in second-quarter 2020 (ended Jul 11, 2020), up 46% from the prior-year number. The earnings figure also beat the Zacks Consensus Estimate of $1.97.

Advance Auto Parts generated net revenues of $2,501 million, beating the Zacks Consensus Estimate of $2,360 million. The revenue figure also rose 7.3% from the year-ago quarter reported figure. During the second quarter, comparable store sales increased 7.5% year on year.

Adjusted operating income climbed 42.2% year over year to $279.3 million. Adjusted selling, general and administrative (SG&A) expenses totaled $817.7million compared with the $813 million witnessed in the year-ago quarter.

Advance Auto Parts refrains from providing 2020 guidance amid coronavirus-led uncertainity.

Financial Position

Advance Auto Parts had cash and cash equivalents of $1.14 billion as of Jul 11, 2020, compared with $418.7 million as of Dec 28, 2019. Total long-term debt was $1.24 billion as of Jul 11, 2020, compared with $747.32 million as of Dec 28, 2019.

Operating cash flow was $448.2 million as of Jul 11, 2020, down from the prior-year quarter’s $492.2 million.

Dividend & Share Repurchase

On Aug 11, Advance Auto Parts’ board approved a cash dividend of 25 cents per share to be paid on Oct 2, to all common shareholders of record as of Sep 18, 2020.

The company lifted its temporary suspension on its existing share-repurchase program as of Aug 12, 2020. At the end of the second quarter, the company had $861.7 million remaining under the share-repurchase program.

Store Update

As of Aug 11, 2020, the company operated 4,819 stores and 167 Worldpac branches in the United States, Canada, Puerto Rico and the U.S. Virgin Islands. It also serves 1,262 independently-owned Carquest branded stores across these locations in addition to Mexico, the Bahamas, Turks and Caicos and British Virgin Islands.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 29.48% due to these changes.

VGM Scores

Currently, Advance Auto Parts has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Advance Auto Parts has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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