Advance Auto Parts, Inc.
Thesis
We recommend a long position in Advance Auto Parts stock with a three year target price of ~$165, representing a ~100% upside from the current share price of $80. AAP is undervalued due to an inefficient cost structure and has strong barriers to entry, significant free cash flow generation, and attractive growth opportunities in the commercial segment.
Did it work?
failed
confidence: high
The thesis called for AAP to roughly double to ~$165 within three years, but 160 months later the stock is down 46.4% instead — the opposite direction of the long thesis. Far more than the stated 3-year horizon has elapsed, and the price action decisively invalidates the claims of undervaluation, strong FCF-driven upside, and commercial segment growth. The thesis clearly failed.