One-glance verdict
Within fair range
$23.11 our estimate vs market $31.94
Wall Street consensus: $42.31 (83.1% higher than our fair-value estimate)
38% above our estimate
Fundamentals snapshot
Valvoline Inc.
VVV · NYQ · Consumer Cyclical · Auto & Truck Dealerships
Current price
$31.94
52-week range
$26.21 - $41.08
Market cap
$4.07B
Balance sheet
Distressed
5.65x Adequate
Net debt $1.90B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 14.8% last year.
- Reward Returns 28.4% on equity, ahead of 60% of its peers.
- Risk Stock trades 152.9% above its 5-year average P/E.
- Risk Insider ownership is only 0.3% (peer median: 0.8%).
What this company does
Valvoline Inc.
Valvoline Inc. makes money by providing quick car maintenance services like oil changes at its many repair shops, primarily in the U.S. and Canada. This business model means a lot of their income comes from regular visits from customers who need their cars serviced, which is a key part of why their financial health is usually quite stable, as expressed by their consistent margins (the profit percentage they keep from each dollar of sales after covering direct costs).
How the company got here
Valvoline started way back in 1866, originally as a lubricant company for steam engines. Over time, it shifted focus as cars became more common, eventually becoming a household name for motor oil. A major turning point was its decision to focus more on its service centers, offering quick oil changes and other basic car maintenance, rather than just selling oil in bottles. This strategic shift helped Valvoline adapt to changing consumer needs and the automotive market.
What it actually does
Valvoline is primarily known for its automotive preventive maintenance services. Think of it as a pit stop for your car's regular check-ups. They offer services like oil changes, which are crucial for keeping your engine running smoothly, as well as replacing things like batteries, light bulbs, and windshield wipers. They also perform tire rotations to help your tires last longer. Essentially, Valvoline helps car owners keep their vehicles in good working order with convenient, routine services.
Valvoline Retail Services
This is the biggest part of Valvoline's business, where they operate and franchise service centers that offer quick oil changes and other automotive maintenance. When you drive into a Valvoline Instant Oil Change, you're interacting with this segment. Customers pay for these essential services to keep their cars running well and to avoid bigger problems down the road. This segment makes up the majority of Valvoline's revenue, as it directly serves a large number of car owners.
What management is betting on now
Valvoline's management is focused on expanding its network of company-owned and franchised service centers. The goal is to make Valvoline's convenient maintenance services accessible to more people across the United States and Canada. They believe that by growing this retail footprint, they can capture a larger share of the automotive maintenance market. This strategy aims to increase revenue and brand recognition by being the go-to place for quick and reliable car care.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$29.90M
FY2025 Q1
$-12.40M
FY2025 Q2
$-4.60M
FY2025 Q3
$32.00M
FY2025 Q4
$23.00M
FY2026 Q1
$7.40M
FY2026 Q2
$37.60M
FY2026 Q3
$67.30M
Revenue
$544.60M
Net income
$64.50M
Diluted EPS
0.51
Operating cash flow
$124.40M
Free cash flow
$67.30M
Fetching…
Sources
Revenue
$503.80M
Net income
$44.80M
Diluted EPS
0.35
Operating cash flow
$95.40M
Free cash flow
$37.60M
Fetching…
Sources
Revenue
$461.80M
Net income
$-32.80M
Diluted EPS
-0.26
Operating cash flow
$64.80M
Free cash flow
$7.40M
Fetching…
Sources
Revenue
$453.80M
Net income
$25.00M
Diluted EPS
0.20
Operating cash flow
$121.90M
Free cash flow
$23.00M
Fetching…
Sources
Revenue
$439.00M
Net income
$56.50M
Diluted EPS
0.44
Operating cash flow
$86.90M
Free cash flow
$32.00M
Fetching…
Sources
Revenue
$403.20M
Net income
$37.60M
Diluted EPS
0.29
Operating cash flow
$47.20M
Free cash flow
$-4.60M
Fetching…
Sources
Revenue
$414.30M
Net income
$91.60M
Diluted EPS
0.71
Operating cash flow
$41.20M
Free cash flow
$-12.40M
Fetching…
Sources
Revenue
$435.50M
Net income
$92.30M
Diluted EPS
0.70
Operating cash flow
$101.30M
Free cash flow
$29.90M
Fetching…
Sources
Is it cheap or expensive?
Fair value $23.11 vs current price $31.94
Wall Street consensus is the average analyst price target: $42.31 (83.1% higher than our fair-value estimate).
Our most-likely fair value is $23.11 a share — about 27.6% away from today's price of $31.94, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $1.9B. Interest coverage 5.6x.
Net debt
$1.90B
Interest coverage
5.65x
Valvoline Inc.'s profit covers its interest bill about 5.6 times over. which is stronger than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
VVV
BASELINE
Valvoline Inc.
Total debt $1.98B Interest coverage 5.65x This is the baseline the peer rows are being compared against.
Total debt $2.22B Interest coverage 2.14x -62% vs VVV Carries about 2.6x less debt cushion than VVV.
Total debt $2.76B Interest coverage 6.67x +18% vs VVV Carries about 1.2x more debt cushion than VVV.
Total debt $5.63B Interest coverage 1.16x -79% vs VVV Carries about 4.9x less debt cushion than VVV.
Total debt $12.86B Interest coverage 7.42x +31% vs VVV Carries about 1.3x more debt cushion than VVV.
Total debt $6.82B Interest coverage 7.43x +32% vs VVV Carries about 1.3x more debt cushion than VVV.
What you should know
The case for and against VVV
3 Rewards
2 Risks
Rewards
-
Revenue grew 14.8% last year.
-
Returns 28.4% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
-
Stock trades 152.9% above its 5-year average P/E.
-
Insider ownership is only 0.3% (peer median: 0.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
39.43x
Forward P/E
16.21x
P/B
9.78x
P/S
2.07x
EV/EBITDA
12.41x
PEG ratio
1.10x
Profitability
How much profit each dollar creates
Gross margin
38.3%
Operating margin
21.0%
Net margin
5.2%
ROE
28.4%
ROA
7.0%
Health
Liquidity and balance-sheet strength
Debt / equity
4.75x
Current ratio
0.70x
Quick ratio
0.46x
Total debt
$1.98B
Total cash
$84.20M
Growth
How the business has been compounding
Revenue TTM
$1.96B
Revenue 5Y CAGR
13.3%
EPS TTM
0.81
EPS 5Y CAGR
-11.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$406.50M
Free CF TTM
$38.00M
FCF margin
1.9%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2022-12-01