20 Underperforming Stocks Targeted By Short Sellers

14. Advance Auto Parts, Inc. (NYSE:AAP)

Short interest: 15.36%

6 months’ performance: -11.35%

Advance Auto Parts, Inc. operates as an automotive aftermarket parts provider. It provides brakes and brake pads, batteries and battery accessories, exhaust systems and parts, radiators and cooling parts, steering and alignment parts, belts and hoses, and other products.

The firm significantly improved its financial position in the latest quarter with $1.87 billion in cash. AAP reduced its net debt to $1.8 billion from $3.8 billion in Q3 2024, which further justifies its balance sheet strength. Additionally, the company took a restructuring initiative to close approximately 200 independent locations and 500 corporate stores. These closures are aimed at saving $60 to $80 million in annual costs.

Despite all these positives, there are no short-term catalysts for the company’s investors. Based on the guidance, Q1 does not seem encouraging. The firm expects about a 2% decline in same-store sales. The reality could be even worse for the company as tough macro conditions, coupled with a poor environment for auto stocks, are set to deal a double blow.