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AutoZone (AZO)
NYSE:AZO
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AutoZone
(NYSE:AZO)
70Outperform
Positive Factors
Commercial Market Share
AutoZone is experiencing commercial market share gains, particularly as its parts availability initiatives gain traction in the fragmented auto parts aftermarket.
Industry Fundamentals
AutoZone is still benefiting from industry fundamentals such as increasing miles driven and aging car parc as consumers are holding on to their existing vehicles for longer.
Market Positioning
AutoZone is viewed as a well-positioned retailer amidst tariff and macro uncertainty.
Negative Factors
Competition
Competition from Walmart to Amazon isn’t letting up, making it a tough competitor that won’t go away.
SG&A Spending
Potential for higher than planned SG&A spending could impact market share gains.
Tariffs and Costs
Tariffs remain a wildcard for AutoZone and peers, with potential impact on costs and profits.
AutoZone (AZO) vs. S&P 500 (SPY)
Market Cap
$64.91B
Dividend YieldN/A
Average Volume (3M)129.22K
Price to Earnings (P/E)26.0
Beta (1Y)0.40
Revenue Growth4.72%
EPS Growth4.69%
CountryUS
Employees75,600
SectorConsumer Cyclical
Sector Strength75
IndustrySpecialty Retail
Share Statistics
EPS (TTM)28.29
Shares Outstanding16,728,657
10 Day Avg. Volume104,236
30 Day Avg. Volume129,223
Financial Highlights & Ratios
PEG Ratio-54.53
Price to Book (P/B)-14.18
Price to Sales (P/S)0.00
P/FCF Ratio30.44
Enterprise Value/Market Cap1.13
Enterprise Value/Revenue1.00
Enterprise Value/Gross Profit7.39
Enterprise Value/Ebitda4.32
Forecast
1Y Price Target
$3,927.05Price Target Upside1.21% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering23
AutoZone Business Overview & Revenue Model
Company DescriptionAutoZone, Inc. retails and distributes automotive replacement parts and accessories. The company offers various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Its products include A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps, as well as tire repairs. In addition, the company offers maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers. Further, it provides air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, stereos and radios, tools, and wash and wax products, as well as towing services. Additionally, the company provides a sales program that offers commercial credit and delivery of parts and other products; sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com. As of November 20, 2021, it operated 6,066 stores in the United States; 666 stores in Mexico; and 53 stores in Brazil. The company was founded in 1979 and is based in Memphis, Tennessee.
How the Company Makes MoneyAutoZone makes money primarily through the sale of automotive parts and accessories. The company's revenue model is centered around its vast network of retail stores where it sells products directly to consumers and professional installers. Key revenue streams include the sale of replacement parts, maintenance items, and automotive accessories. Additionally, AutoZone generates income through its commercial sales programs, which provide professional repair shops with parts and products. The company benefits from strategic partnerships with manufacturers and suppliers, ensuring a consistent supply of high-demand items. Factors such as brand recognition, extensive product offerings, and a reliable distribution network further contribute to AutoZone's financial performance.
AutoZone Key Performance Indicators (KPIs)
Any
Sales Per Average Store
Measures the average revenue generated per store, indicating operational efficiency, customer demand, and the effectiveness of sales strategies.
Measures the average revenue generated per store, indicating operational efficiency, customer demand, and the effectiveness of sales strategies.
Data provided by:
Main Street Data
Main Street DataAutoZone Financial Statement Overview
Summary
AutoZone demonstrates strong profitability and cash flow generation, crucial for operations and growth. However, significant leverage and negative equity pose financial risks affecting future financial flexibility.Income Statement
AutoZone's income statement reflects strong profitability with a gross profit margin of 53.1% and a net profit margin of 14.0% for TTM, indicating efficient cost management and robust bottom-line performance. However, the revenue growth rate is modest at 1.0%, suggesting stable but limited top-line expansion.85
Very Positive
Balance Sheet
The balance sheet shows substantial leverage with a negative equity of -$4.46 billion, resulting in a negative equity ratio. The debt-to-equity ratio is not meaningful due to negative equity, which poses a risk. Despite high leverage, the company maintains significant total assets of $18.12 billion, supporting operational needs.60
Neutral
Cash Flow
The cash flow statement highlights strong cash generation capabilities, with a free cash flow of $1.72 billion and an operating cash flow to net income ratio of 0.98. However, free cash flow declined by 10.8% compared to the previous period, indicating a potential area for improvement in cash management.78
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 18.67B | 18.49B | 17.46B | 16.25B | 14.63B | 12.63B | Gross Profit |
| 9.92B | 9.82B | 9.07B | 8.47B | 7.72B | 6.77B | EBIT |
| 3.74B | 3.79B | 3.47B | 3.27B | 2.94B | 2.42B | EBITDA |
| 4.18B | 4.35B | 3.97B | 3.71B | 3.40B | 2.90B | Net Income Common Stockholders |
| 2.61B | 2.66B | 2.53B | 2.43B | 2.17B | 1.73B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 300.90M | 298.17M | 277.05M | 264.38M | 1.17B | 1.75B | Total Assets |
| 18.12B | 17.18B | 15.99B | 15.28B | 14.52B | 14.42B | Total Debt |
| 12.37B | 12.37B | 10.93B | 9.30B | 8.23B | 8.31B | Net Debt |
| 12.06B | 12.07B | 10.65B | 9.03B | 7.06B | 6.56B | Total Liabilities |
| 22.57B | 21.93B | 20.34B | 18.81B | 16.31B | 15.30B | Stockholders Equity |
| -4.46B | -4.75B | -4.35B | -3.54B | -1.80B | -877.98M |
| Cash Flow | Free Cash Flow | ||||
| 2.01B | 1.93B | 2.14B | 2.54B | 2.90B | 2.26B | Operating Cash Flow |
| 3.14B | 3.00B | 2.94B | 3.21B | 3.52B | 2.72B | Investing Cash Flow |
| -1.31B | -1.29B | -876.18M | -648.10M | -601.78M | -497.88M | Financing Cash Flow |
| -1.82B | -1.68B | -2.06B | -3.47B | -3.50B | -643.64M |
AutoZone Technical Analysis
Positive
3879.97
Price Trends
3668.43
Positive
3515.16
Positive
3332.68
Positive
Market Momentum
34.42
Negative
66.91
Neutral
95.21
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZO, the sentiment is Positive. The current price of 3879.97 is above the 20-day moving average (MA) of 3705.51, above the 50-day MA of 3668.43, and above the 200-day MA of 3332.68, indicating a bullish trend. The MACD of 34.42 indicates Negative momentum. The RSI at 66.91 is Neutral, neither overbought nor oversold. The STOCH value of 95.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AZO.
AutoZone Risk Analysis
AutoZone disclosed 21 risk factors in its most recent earnings report. AutoZone reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AutoZone Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $79.44B | 34.16 | -174.09% | ― | 4.90% | 3.28% | |
71 Outperform | $17.86B | 21.13 | 19.19% | 3.13% | 1.99% | -32.18% | |
71 Outperform | $28.10B | 26.35 | 49.62% | 1.68% | 2.07% | -2.13% | |
70 Outperform | $64.91B | 26.02 | -14.95% | ― | 4.72% | 4.69% | |
70 Outperform | $64.22B | 104.99 | 44.39% | ― | 32.23% | -46.86% | |
61 Neutral | $6.97B | 11.38 | 2.88% | 3.90% | 2.64% | -22.07% | |
46 Neutral | $2.10B | 59.62 | -23.45% | 2.85% | -9.34% | -852.37% |
* Consumer Cyclical Sector Average
Performance Comparison
AZO
AutoZone
3,879.97
955.93
32.69%
AAP
Advance Auto Parts
34.38
-36.54
-51.52%
GPC
Genuine Parts Company
129.09
-18.27
-12.40%
ORLY
O'Reilly Auto
1,393.90
398.57
40.04%
TSCO
Tractor Supply
52.91
-3.00
-5.37%
CVNA
Carvana Co
305.21
187.71
159.75%
AutoZone Earnings Call Summary
Earnings Call Date:Mar 04, 2025
(Q2-2025)
| % Change Since: 11.57%|
Next Earnings Date:May 27, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance. While there were significant achievements in commercial sales growth and international expansion, challenges such as foreign exchange headwinds, decreased earnings per share, and increased operating expenses weighed on the results.Q2-2025 Updates
Positive Updates
Domestic Commercial Sales Growth
Domestic Commercial sales grew 7.3% and were up 10% on a 2-year stack basis, indicating a strong performance in this segment.
Improved International Same-Store Sales
International same-store sales increased 9.5% on a constant currency basis, showing robust growth in international markets.
Mega-Hub Expansion
The company plans to open at least 19 more Mega-Hub locations over the next 2 quarters, enhancing parts availability and delivery speed.
Stable Gross Margins
Despite challenges, gross margin was maintained at 53.9%, indicating effective cost management.
Negative Updates
Earnings Per Share Decrease
Earnings per share decreased 2.1%, impacted by currency headwinds and a competitive environment.
Foreign Exchange Headwinds
A 19% weakening of FX rates from Mexico versus the U.S. dollar resulted in a $91 million headwind to sales and $30 million to EBIT.
DIY Sales Challenges
Domestic DIY sales showed minimal growth with a 0.1% comp increase, impacted by discretionary sales declines and consumer spending caution.
Increased Operating Expenses
Operating expenses were up 6.4% versus last year, resulting in a 134 basis points deleverage as a percentage of sales.
Company Guidance
In the second quarter of fiscal year 2025, AutoZone reported a 2.4% increase in total sales and a 1.9% growth in domestic same-store sales. International same-store sales, on a constant currency basis, rose by 9.5%, although were negatively impacted by a 1,900 basis points currency headwind, leading to an unadjusted negative 8.2% International comp. Domestic commercial sales increased by 7.3%, with a two-year stack basis growth of 10%. The company opened 28 net domestic stores and 17 new international stores in Mexico and Brazil, bringing the total to 949 international locations. AutoZone faced a decrease in earnings per share by 2.1%, influenced by a $91 million sales headwind due to foreign exchange rates. Despite these challenges, the company remains optimistic, citing improved execution in the domestic commercial business and success in international markets as key drivers for anticipated growth in the latter half of the fiscal year.AutoZone Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
AutoZone Appoints New Board Member Claire McDonough
Positive
Apr 23, 2025
On April 21, 2025, AutoZone appointed Claire Rauh McDonough, the CFO of Rivian Automotive, to its Board of Directors, where she will serve on the Audit and Compensation Committees. This strategic appointment adds valuable expertise to AutoZone’s board, enhancing its decision-making capabilities and potentially strengthening its market position.
Spark’s Take on AZO Stock
According to Spark, TipRanks’ AI Analyst, AZO is a Outperform.
AutoZone’s overall stock score of 73 reflects strong profitability and cash flow generation, balanced by financial risks from high leverage and a negative equity position. Technical analysis suggests a positive trend, while valuation metrics indicate reasonable pricing. The recent earnings call highlighted growth in commercial sales and international markets, but also noted challenges such as currency headwinds and increased expenses.
To see Spark’s full report on AZO stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.