Advance Auto PartsAAP +5.71%69 Return-on-Tangible-Equity is 7.96% as of Mar. 2026, which is 69% below its 10-year median of 25.84. GuruFocus rates AAP with a GF Score™ of 69/100 and a GF Value™ of $52.12 (Modestly Overvalued). The stock has 5 warning signs investors should review. Among 1,285 Vehicles & Parts companies, Advance Auto Parts ranks worse than 66.54% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Advance Auto Parts's annualized net income for the quarter that ended in Mar. 2026 was $96 Mil. Advance Auto Parts's average shareholder tangible equity for the quarter that ended in Mar. 2026 was $1,206 Mil. Therefore, Advance Auto Parts's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was 7.96%.
The historical rank and industry rank for Advance Auto Parts's Return-on-Tangible-Equity or its related term are showing as below:
AAP'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: -25.21 Med: 25.84 Max: 44.44
Current: 3.67
During the past 13 years, Advance Auto Parts's highest Return-on-Tangible-Equity was 44.44%. The lowest was -25.21%. And the median was 25.84%.
AAP's Return-on-Tangible-Equity is ranked worse than 66.54% of 1285
companies
in the Vehicles & Parts industry
Industry Median: 7.49
vs AAP: 3.67
Advance Auto Parts (NYSE:AAP) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Advance Auto Parts Return-on-Tangible-Equity Related Terms
Advance Auto Parts Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Advance Auto Parts's Return-on-Tangible-Equity can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Advance Auto Parts Return-on-Tangible-Equity Chart
AAP vs DORM, ATMU, DAN: Return-on-Tangible-Equity Comparison
For the Auto Parts subindustry, Advance Auto Parts's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Advance Auto Parts Return-on-Tangible-Equity vs Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Advance Auto Parts's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Advance Auto Parts's Return-on-Tangible-Equity falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 7.96% mean?
Advance Auto Parts (AAP) has a Return-on-Tangible-Equity of 7.96% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Advance Auto Parts and its competitors. This is 69% below median its historical median of 25.84. According to the industry distribution chart, Advance Auto Parts ranks #855 out of 1285 companies in the Vehicles & Parts industry, placing it in the top 66.5%.
Is Advance Auto Parts' Return-on-Tangible-Equity too high?
Advance Auto Parts' current Return-on-Tangible-Equity of 7.96% is 69% below median its 10-year median of 25.84. The Vehicles & Parts industry median Return-on-Tangible-Equity is 7.49. Advance Auto Parts' value of 7.96% is 6.3% above this industry median. Based on the distribution chart, Advance Auto Parts ranks #855 out of 1285 companies in the Vehicles & Parts industry, which is below the industry midpoint. Overall, Advance Auto Parts has a GF Score™ of 69/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Advance Auto Parts' Return-on-Tangible-Equity compare to DORM and ATMU?
According to the Vehicles & Parts industry distribution chart, Advance Auto Parts ranks #855 out of 1285 companies for Return-on-Tangible-Equity. This places Advance Auto Parts in the lower half of its industry. The industry median Return-on-Tangible-Equity is 7.49. Advance Auto Parts' value of 7.96% is 6.3% above this benchmark. While the company's 10-year median is 25.84 vs. the industry median of 7.49, Advance Auto Parts has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for a Vehicles & Parts company?
The median Return-on-Tangible-Equity among Vehicles & Parts companies is 7.49, based on 1,285 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Advance Auto Parts's current Return-on-Tangible-Equity of 7.96% is 6.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Advance Auto Parts and its competitors. For the Vehicles & Parts industry, the median Return-on-Tangible-Equity is 7.49 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Advance Auto Parts's current Return-on-Tangible-Equity is 7.96%, which is 69% below median its own 10-year median of 25.84. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Advance Auto Parts stock overvalued right now?
Based on GuruFocus' analysis, Advance Auto Parts (AAP) is currently considered Modestly Overvalued. The stock's GF Value™ is $52.12, compared to a current price of $57.94 — trading 11.2% above its estimated fair value. The current Return-on-Tangible-Equity is 7.96%, which is 69% below median its 10-year median of 25.84 and 6.3% above the Vehicles & Parts industry median of 7.49. Advance Auto Parts' overall GF Score™ is 69/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Advance Auto Parts (AAP), the current Return-on-Tangible-Equity is 7.96% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Advance Auto Parts (AAP) Overvalued in 2026?
Based on GuruFocus' analysis, Advance Auto Parts stock appears to be overvalued.
The current stock price of $57.94 is trading 11.2% above its estimated GF Value™ of $52.12.
GuruFocus considers Advance Auto Parts to be Modestly Overvalued.
Key valuation signals for AAP:
Return-on-Tangible-Equity: 7.96% (69% below median its 10-year median of 25.84)
GF Value™: $52.12 vs. price of $57.94 (11.2% above fair value)
Industry Position: 6.3% above the Vehicles & Parts median (#855 of 1285)
No single metric tells the full story. See the AAP stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Advance Auto Parts is a leading auto-parts retailer in North America with more than 4,000 store and branch locations. About half of the firm's sales are geared toward the professional channel, with the remaining sales in the do-it-yourself market. Through its vast store footprint and distribution network, Advance manages thousands of stock-keeping units for various vehicle makes and models. The retailer primarily competes on inventory availability and service speed, making the operating efficiency of its hub-and-spoke distribution model critical to meeting customer needs.
69GF Score
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