AAP vs. KMX: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at AAP and KMX, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
KMX’s market capitalization of 10.76 billion USD is significantly greater than AAP’s 3.09 billion USD, highlighting its more substantial market valuation.
With betas of 1.09 for AAP and 1.38 for KMX, both stocks show similar sensitivity to overall market movements.
| Symbol | AAP | KMX |
|---|---|---|
| Company Name | Advance Auto Parts, Inc. | CarMax, Inc. |
| Country | US | US |
| Sector | Consumer Cyclical | Consumer Cyclical |
| Industry | Specialty Retail | Auto - Dealerships |
| CEO | Shane M. O'Kelly | William D. Nash CPA |
| Price | 51.62 USD | 70.61 USD |
| Market Cap | 3.09 billion USD | 10.76 billion USD |
| Beta | 1.09 | 1.38 |
| Exchange | NYSE | NYSE |
| IPO Date | November 29, 2001 | February 4, 1997 |
| ADR | No | No |
Historical Performance
This chart compares the performance of AAP and KMX by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
AAP
-14.70%
Specialty Retail Industry
- Max
- 70.52%
- Q3
- 29.03%
- Median
- 10.90%
- Q1
- -7.86%
- Min
- -57.43%
AAP has a negative Return on Equity of -14.70%. This indicates the company is generating a loss for its shareholders, which can be a result of unprofitability or negative shareholder equity and is often a sign of financial distress.
KMX
8.96%
Auto - Dealerships Industry
- Max
- 28.79%
- Q3
- 15.58%
- Median
- 9.02%
- Q1
- -10.07%
- Min
- -35.39%
KMX’s Return on Equity of 8.96% is on par with the norm for the Auto - Dealerships industry, indicating its profitability relative to shareholder equity is typical for the sector.
Return on Invested Capital
AAP
-8.92%
Specialty Retail Industry
- Max
- 29.46%
- Q3
- 13.75%
- Median
- 8.05%
- Q1
- 0.80%
- Min
- -17.95%
AAP has a negative Return on Invested Capital of -8.92%. This indicates that its operations are failing to generate a profit on the total capital invested, signaling significant inefficiency or value destruction.
KMX
0.10%
Auto - Dealerships Industry
- Max
- 14.67%
- Q3
- 8.34%
- Median
- 6.56%
- Q1
- 0.65%
- Min
- -4.67%
KMX’s Return on Invested Capital of 0.10% is in the lower quartile for the Auto - Dealerships industry. This indicates a less efficient conversion of invested capital into profit compared to most of its competitors.
Net Profit Margin
AAP
-3.74%
Specialty Retail Industry
- Max
- 19.78%
- Q3
- 8.49%
- Median
- 3.43%
- Q1
- -0.69%
- Min
- -9.88%
AAP has a negative Net Profit Margin of -3.74%, indicating the company is operating at a net loss as its expenses exceeded its revenues.
KMX
2.08%
Auto - Dealerships Industry
- Max
- 7.00%
- Q3
- 2.95%
- Median
- 2.18%
- Q1
- -0.32%
- Min
- -0.47%
KMX’s Net Profit Margin of 2.08% is aligned with the median group of its peers in the Auto - Dealerships industry. This indicates its ability to convert revenue into profit is typical for the sector.
Operating Profit Margin
AAP
-9.34%
Specialty Retail Industry
- Max
- 24.47%
- Q3
- 11.10%
- Median
- 5.85%
- Q1
- 0.66%
- Min
- -12.62%
AAP has a negative Operating Profit Margin of -9.34%. This signifies the company is unprofitable at the operational level, as its core business expenses exceed its revenue.
KMX
0.13%
Auto - Dealerships Industry
- Max
- 8.99%
- Q3
- 5.53%
- Median
- 4.28%
- Q1
- -1.91%
- Min
- -11.10%
KMX’s Operating Profit Margin of 0.13% is around the midpoint for the Auto - Dealerships industry, indicating that its efficiency in managing core business operations is typical for the sector.
Profitability at a Glance
| Symbol | AAP | KMX |
|---|---|---|
| Return on Equity (TTM) | -14.70% | 8.96% |
| Return on Assets (TTM) | -3.31% | 2.04% |
| Return on Invested Capital (TTM) | -8.92% | 0.10% |
| Net Profit Margin (TTM) | -3.74% | 2.08% |
| Operating Profit Margin (TTM) | -9.34% | 0.13% |
| Gross Profit Margin (TTM) | 36.96% | 11.20% |
Financial Strength
Current Ratio
AAP
1.27
Specialty Retail Industry
- Max
- 3.24
- Q3
- 1.99
- Median
- 1.42
- Q1
- 1.02
- Min
- 0.54
AAP’s Current Ratio of 1.27 aligns with the median group of the Specialty Retail industry, indicating that its short-term liquidity is in line with its sector peers.
KMX
2.39
Auto - Dealerships Industry
- Max
- 1.65
- Q3
- 1.54
- Median
- 1.33
- Q1
- 1.07
- Min
- 0.77
KMX’s Current Ratio of 2.39 is exceptionally high, placing it well outside the typical range for the Auto - Dealerships industry. This indicates a very strong liquidity position, though such a high ratio may also suggest that the company is not using its assets efficiently to generate profits.
Debt-to-Equity Ratio
AAP
1.67
Specialty Retail Industry
- Max
- 2.72
- Q3
- 1.42
- Median
- 0.87
- Q1
- 0.35
- Min
- 0.01
AAP’s leverage is in the upper quartile of the Specialty Retail industry, with a Debt-to-Equity Ratio of 1.67. While this approach can boost equity growth, it also exposes the company to greater financial vulnerability.
KMX
2.85
Auto - Dealerships Industry
- Max
- 4.90
- Q3
- 3.44
- Median
- 1.76
- Q1
- 0.50
- Min
- 0.01
KMX’s Debt-to-Equity Ratio of 2.85 is typical for the Auto - Dealerships industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
Interest Coverage Ratio
AAP
-10.54
Specialty Retail Industry
- Max
- 37.34
- Q3
- 17.19
- Median
- 4.28
- Q1
- 0.11
- Min
- -23.60
AAP has a negative Interest Coverage Ratio of -10.54. This indicates that its earnings were insufficient to cover even its operational costs, let alone its interest payments, signaling significant financial distress.
KMX
0.04
Auto - Dealerships Industry
- Max
- 6.71
- Q3
- 3.13
- Median
- 1.99
- Q1
- 0.03
- Min
- -1.62
KMX’s Interest Coverage Ratio of 0.04 is a critical concern. A value below 1.0 means operating earnings are insufficient to cover interest expenses, indicating severe financial strain and high default risk.
Financial Strength at a Glance
| Symbol | AAP | KMX |
|---|---|---|
| Current Ratio (TTM) | 1.27 | 2.39 |
| Quick Ratio (TTM) | 0.49 | 0.80 |
| Debt-to-Equity Ratio (TTM) | 1.67 | 2.85 |
| Debt-to-Asset Ratio (TTM) | 0.35 | 0.65 |
| Net Debt-to-EBITDA Ratio (TTM) | -3.78 | 10.15 |
| Interest Coverage Ratio (TTM) | -10.54 | 0.04 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for AAP and KMX. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
AAP
1.94%
Specialty Retail Industry
- Max
- 5.54%
- Q3
- 1.52%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
With a Dividend Yield of 1.94%, AAP offers a more attractive income stream than most of its peers in the Specialty Retail industry, signaling a strong commitment to shareholder returns.
KMX
0.00%
Auto - Dealerships Industry
- Max
- 2.73%
- Q3
- 0.59%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
KMX currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
Dividend Payout Ratio
AAP
-17.02%
Specialty Retail Industry
- Max
- 177.64%
- Q3
- 9.49%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
AAP has a negative Dividend Payout Ratio of -17.02%. This typically means the company paid a dividend despite reporting a net loss, a situation that may signal financial instability.
KMX
0.00%
Auto - Dealerships Industry
- Max
- 34.61%
- Q3
- 9.34%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
KMX has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
Dividend at a Glance
| Symbol | AAP | KMX |
|---|---|---|
| Dividend Yield (TTM) | 1.94% | 0.00% |
| Dividend Payout Ratio (TTM) | -17.02% | 0.00% |
Valuation
Price-to-Earnings Ratio
AAP
-8.80
Specialty Retail Industry
- Max
- 81.45
- Q3
- 42.51
- Median
- 25.40
- Q1
- 12.72
- Min
- 1.88
AAP has a negative P/E Ratio of -8.80. This occurs when a company has negative earnings (a net loss), making the ratio unsuitable for valuation analysis.
KMX
19.23
Auto - Dealerships Industry
- Max
- 31.48
- Q3
- 20.01
- Median
- 14.07
- Q1
- 11.52
- Min
- 10.40
KMX’s P/E Ratio of 19.23 is within the middle range for the Auto - Dealerships industry. This suggests its valuation is in line with the sector average, representing neither a significant premium nor a discount compared to its peers.
Forward P/E to Growth Ratio
AAP
-0.19
Specialty Retail Industry
- Max
- 5.90
- Q3
- 2.79
- Median
- 1.76
- Q1
- 0.69
- Min
- 0.00
AAP has a negative Forward PEG Ratio of -0.19. This typically results from negative earnings or forecasts of declining future earnings, making the ratio not meaningful for valuation.
KMX
1.65
Auto - Dealerships Industry
- Max
- 3.22
- Q3
- 2.32
- Median
- 1.63
- Q1
- 0.62
- Min
- 0.46
KMX’s Forward PEG Ratio of 1.65 is within the middle range of its peers in the Auto - Dealerships industry. This suggests a reasonable balance between the stock’s price and its expected growth, aligning with sector valuation norms.
Price-to-Sales Ratio
AAP
0.33
Specialty Retail Industry
- Max
- 5.26
- Q3
- 2.60
- Median
- 1.29
- Q1
- 0.41
- Min
- 0.06
In the lower quartile for the Specialty Retail industry, AAP’s P/S Ratio of 0.33 indicates its revenue is valued more conservatively than most of its peers. This could present a compelling opportunity if the market has overlooked its sales-generating capabilities.
KMX
0.40
Auto - Dealerships Industry
- Max
- 3.42
- Q3
- 1.74
- Median
- 0.45
- Q1
- 0.28
- Min
- 0.19
KMX’s P/S Ratio of 0.40 aligns with the market consensus for the Auto - Dealerships industry. This suggests its valuation, based on sales, is seen as standard and is on par with its competitors.
Price-to-Book Ratio
AAP
1.41
Specialty Retail Industry
- Max
- 12.73
- Q3
- 6.96
- Median
- 3.28
- Q1
- 1.42
- Min
- 0.24
AAP’s P/B Ratio of 1.41 is in the lower quartile for the Specialty Retail industry. From a value investing perspective, this is favorable, as it suggests the stock is trading at a discount to its net asset value and may offer a greater margin of safety.
KMX
1.71
Auto - Dealerships Industry
- Max
- 6.16
- Q3
- 3.70
- Median
- 1.91
- Q1
- 1.56
- Min
- 0.81
KMX’s P/B Ratio of 1.71 is within the conventional range for the Auto - Dealerships industry. This shows a balanced market view, where the stock’s price is neither at a significant premium nor a discount to the book value of its peers.
Valuation at a Glance
| Symbol | AAP | KMX |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | -8.80 | 19.23 |
| Forward PEG Ratio (TTM) | -0.19 | 1.65 |
| Price-to-Sales Ratio (P/S, TTM) | 0.33 | 0.40 |
| Price-to-Book Ratio (P/B, TTM) | 1.41 | 1.71 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | -12.48 | 19.89 |
| EV-to-EBITDA (TTM) | -9.63 | 16.34 |
| EV-to-Sales (TTM) | 0.54 | 1.06 |