The shares of automotive parts retailer Advance Auto Parts are currently presenting investors with a contradictory narrative. As the company remains in focus at a key post-earnings conference, significant institutional investors are placing opposing bets on its future, creating a volatile mix of signals for the market.
Conflicting Moves from Major Investors
Recent portfolio disclosures reveal a sharp divergence in strategy among large investment firms. On one side, substantial sales have been recorded. Russell Investments Group Ltd. cut its stake by 34,084 shares during the second quarter of 2025, a reduction of 12.7%. Its remaining holding is valued at approximately $10.86 million.
Similarly, Legal & General Group Plc sold 21,594 shares, decreasing its position by 10.4%. The firm now retains 185,694 shares, equating to about 0.31% of the company.
These sales are countered by notable bullish activity. Edgestream Partners L.P. established a new position comprising 95,155 shares worth $4.42 million. In an even more aggressive move, Goldman Sachs expanded its holding by 327.7%. This clear split indicates that different classes of investors are anticipating opposing outcomes for the retailer.
A Stark Valuation Disconnect
Trading around $52.50, the stock commands a market capitalization of $3.15 billion. Despite a rally of approximately 13% over the past month, fundamental valuation models paint a confusing and extreme picture.
Should investors sell immediately? Or is it worth buying Advance Auto Parts?
An analysis from Simply Wall St. underscores a dramatic gap between the current market price and estimated intrinsic value. While a narrative model suggests the shares are slightly undervalued at $54.30, a separate discounted cash flow (DCF) calculation arrives at a starkly different conclusion. This DCF model estimates a fair value of just $6.94 per share, implying the stock may be significantly overvalued at present levels.
Quarterly Results and Key Developments
Market participants are digesting mixed signals from the latest financial report and subsequent events:
- Earnings Beat: For the third quarter, adjusted earnings per share (EPS) came in at $0.92, surpassing the $0.74 estimate.
- Revenue Decline: Despite the profit beat, revenue fell 5.2% year-over-year to $2.04 billion.
- Dividend Declaration: A quarterly dividend of $0.25 per share was declared, yielding roughly 1.9% at current prices.
- Updated Guidance: Management affirmed its full-year EPS forecast in a range of $1.75 to $1.85.
Investor confidence is further tested by insider transactions. Executive Vice President Kristen L. Soler sold 7,662 shares on November 13 at a price of $51.00 each. The analyst community maintains a cautious stance overall, with a consensus rating of “Reduce” and an average price target of $51.78.
All eyes are now on the ongoing post-earnings conference with DA Davidson. The coming days will reveal whether the substantial buying from certain institutions can absorb the selling pressure from others, against a backdrop of declining sales and extreme valuation discrepancies.
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