One-glance verdict
Within fair range
$47.21 our estimate vs market $30.55
Wall Street consensus: $43.69 (-7.5% lower than our fair-value estimate)
35% below our estimate
Fundamentals snapshot
Valvoline Inc.
VVV · NYQ · Consumer Cyclical · Auto & Truck Dealerships
Current price
$30.55
52-week range
$28.50 - $41.33
Market cap
$3.90B
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 141.9% above its 5-year average P/E.
- Risk Insider ownership is only 0.3% (peer median: 0.7%).
What this company does
Valvoline Inc.
Valvoline runs and franchises quick-lube service centers where you can get your car's oil changed and other routine maintenance done, like replacing a battery or rotating tires. The company makes its money from these regular, essential services, creating a steady stream of recurring revenue (income that is highly likely to continue in the future). This predictable business model can be attractive because it doesn't depend on large, one-time sales that are harder to forecast.
How the company got here
Founded in 1866 by Dr. John Ellis, Valvoline created the world's first petroleum-based lubricant and became the first trademarked motor oil brand in the U.S. The company has a long history connected to auto racing and was the recommended oil for the Ford Model T, which helped make it a household name. After being owned by Ashland Inc. for many years, Valvoline became an independent, publicly traded company in 2017. A major turning point came in early 2023 when the company sold its global products business to Saudi Aramco, transforming Valvoline into a company focused purely on automotive services.
What it actually does
Valvoline provides preventive automotive maintenance services directly to car owners through its service centers in the United States and Canada. The main service is a quick oil change, designed to be done in about 15 minutes while you wait in your car. Beyond oil changes, they also offer other routine maintenance like replacing batteries, light bulbs, and wiper blades, as well as rotating tires and changing other important fluids in your car. The company aims to be a trusted and convenient option for keeping your vehicle running well.
Company-Operated Stores
This is Valvoline's largest business, where the company directly owns and operates the service centers. Customers pay Valvoline for services like oil changes and other routine maintenance. This segment generates the most direct revenue (the total amount of money collected from sales) for the company because Valvoline keeps the entire amount the customer pays. These stores are a key part of the company's strategy to provide a consistent and trusted service experience to drivers.
Franchised Stores
Valvoline also makes money by allowing independent owners to open their own Valvoline Instant Oil Change locations. These independent owners, known as franchisees, pay Valvoline for the right to use its brand name, business model, and to buy its products. In return, Valvoline receives ongoing payments called royalties and other fees from these franchised stores. This is a significant part of Valvoline's business, allowing the company to expand its number of locations more quickly and with less of its own money.
What management is betting on now
Management is focused on growing its network of service centers, both by building new company-owned stores and by adding more franchise locations. A key part of their strategy is to increase sales at existing stores by encouraging customers to purchase additional services beyond a basic oil change, such as battery replacements and tire rotations. The company is also making acquisitions, like the purchase of Breeze Autocare, to quickly expand its number of locations. The overall goal is to become a leader in preventive automotive maintenance by offering a quick, easy, and trusted service to more customers.
Price history
How the share price has moved
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Loading price history…
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 $47.21 vs current price $30.55
Wall Street consensus is the average analyst price target: $43.69 (-7.5% lower than our fair-value estimate).
Our most-likely fair value is $47.21 a share — about 54.5% away from today's price of $30.55, 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 $13.09B Interest coverage 7.42x +31% vs VVV Carries about 1.3x more debt cushion than VVV.
Total debt $6.65B 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 141.9% above its 5-year average P/E.
-
Insider ownership is only 0.3% (peer median: 0.7%).
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)
37.72x
Forward P/E
15.31x
P/B
11.03x
P/S
1.98x
EV/EBITDA
12.04x
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
—
Payout ratio
0.0%
Last ex-div date
2022-12-01