AutoZone Inc (AZO)
NYSE:AZO
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AutoZone
(NYSE:AZO)
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Rating:57Neutral
Price Target:
$3,209.00
▼(-10.17% Downside)
Action:Reiterated
Date:05/27/26
The score is anchored by strong profitability and cash generation but is held back by elevated leverage/negative equity and weakening cash conversion. Technicals are the biggest near-term drag with the stock trading below major moving averages and negative MACD. The earnings call was constructive on growth initiatives, commercial momentum, and capital returns, but near-term reported results face LIFO-related headwinds. Valuation appears relatively expensive at ~34x earnings with no dividend yield data to offset.
Positive Factors
High profitability & cash generation
Consistently strong gross and operating margins plus multi‑billion operating and free cash flow provide structural financial strength. Durable cash generation funds store growth, Mega Hub build‑out, buybacks and capex, insulating operations from cyclical swings and enabling long‑term reinvestment.
Negative Factors
Elevated leverage & negative equity
High absolute debt and persistently negative equity increase financial risk and reduce strategic flexibility. In downturns or rising rates, debt servicing and covenant pressures could constrain capex, buybacks or M&A, making the company more sensitive to external shocks despite strong operating earnings.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability & cash generation
Consistently strong gross and operating margins plus multi‑billion operating and free cash flow provide structural financial strength. Durable cash generation funds store growth, Mega Hub build‑out, buybacks and capex, insulating operations from cyclical swings and enabling long‑term reinvestment.
Read all positive factors
AutoZone Key Performance Indicators (KPIs)
Any
Store Count by Geography
Shows the distribution of stores across different regions, highlighting market penetration, regional growth opportunities, and potential exposure to local economic conditions.
Shows the distribution of stores across different regions, highlighting market penetration, regional growth opportunities, and potential exposure to local economic conditions.
Data provided by:
The Fly
The FlyAutoZone (AZO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$50.78B
Dividend YieldN/A
Average Volume (3M)315.36K
Price to Earnings (P/E)20.7
Beta (1Y)0.26
Revenue Growth5.74%
EPS Growth-1.73%
CountryUS
Employees130,000
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)149.14
Shares Outstanding16,476,820
10 Day Avg. Volume412,006
30 Day Avg. Volume315,356
Financial Highlights & Ratios
PEG Ratio-8.65
Price to Book (P/B)-20.65
Price to Sales (P/S)3.72
P/FCF Ratio39.38
Enterprise Value/Market Cap1.18
Enterprise Value/Revenue3.01
Enterprise Value/Gross Profit5.81
Enterprise Value/Ebitda14.09
Forecast
1Y Price Target
$3,889.18Price Target Upside8.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering19
EPS Forecast (FY)151
Revenue Forecast (FY)$20.49B
AutoZone Business Overview & Revenue Model
Company Description
AutoZone, 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 ...
How the Company Makes Money
AutoZone primarily makes money by selling automotive replacement parts and maintenance products through two main customer channels: (1) DIY retail customers who purchase parts and supplies for self-repair, and (2) professional customers (commercia...
AutoZone Earnings Call Summary
Earnings Call Date:May 26, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Sep 29, 2026
Earnings Call Sentiment Positive
The call emphasized durable top-line growth, accelerated commercial momentum, strong free cash flow and disciplined capital returns (including significant buybacks). Key operating wins include expanding and productive new stores, the Mega Hub rollout, and improving gross-margin trends excluding LIFO. Offsetting these positives are material noncash LIFO charges that meaningfully depress reported margins and EPS, softer DIY traffic (weather driven), a moderating international backdrop, and continued inflation/supply risks. On balance the company is executing on strategic growth initiatives and generating cash, but near-term reported results will be impacted by LIFO and macro/weather-related softness.Positive Updates
Strong Top-Line and EPS Growth
Total sales of $4.8B, up 8.4% year-over-year; diluted EPS $38.07, up 7.7% (EPS would be +12.5% excluding a $20M noncash LIFO charge vs. a $16M credit last year).
Negative Updates
Rising Noncash LIFO Charges
Recorded a $20M noncash LIFO charge in Q3 that reduced EPS by ~$0.91; year-to-date LIFO charges total $177M. Management expects ~ $30M LIFO in Q4 and ~$207M for FY26 versus $64M last year, creating sizable headwinds to reported margins and EPS.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Top-Line and EPS Growth
Total sales of $4.8B, up 8.4% year-over-year; diluted EPS $38.07, up 7.7% (EPS would be +12.5% excluding a $20M noncash LIFO charge vs. a $16M credit last year).
Read all positive updates
Company Guidance
The company provided clear Q4 and near‑term guidance: they expect to open ~160 stores in Q4 (365 for FY26 vs 305 last year) while investing nearly $1.6 billion in CapEx this year and a similar amount next year; plan a Q4 LIFO charge of ~$30M (bringing FY26 LIFO to ~$207M vs $64M LY) which they expect will reduce EBIT by ~$30M, pressure gross margin by ~45 bps and reduce EPS by about $1.40; if current FX rates hold Q4 would get an estimated ~$62M revenue tailwind, ~$19M to EBIT and ~$0.78 to EPS; model Q4 interest at ~$152M, an effective tax rate of ~22%, and SG&A per store/total growth roughly in line with Q3 (~3% per store); they reiterated Q3 trends to watch (DIY traffic -3.6%, same‑SKU inflation ~7% in Q3) but expect DIY average ticket to be mid‑4% in Q4, international comps to run similar to Q3, continued strong free cash generation (Q3 FCF $455M, YTD $1.1B), a leverage ratio of ~2.5x EBITDAR, inventory per store +6% (total inventory +10.8%), net inventory per store -$107k, and $586M of buybacks this quarter with ~$800M remaining.AutoZone Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
38
Negative
Cash Flow
62
Positive
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.99B | 18.94B | 18.49B | 17.46B | 16.25B | 14.63B |
| Gross Profit | 10.34B | 9.97B | 9.82B | 9.07B | 8.47B | 7.72B |
| EBITDA | 4.26B | 4.22B | 4.35B | 3.98B | 3.72B | 3.36B |
| Net Income | 2.48B | 2.50B | 2.66B | 2.53B | 2.43B | 2.17B |
Balance Sheet | ||||||
| Total Assets | 19.55B | 19.36B | 17.18B | 15.99B | 15.28B | 14.52B |
| Cash, Cash Equivalents and Short-Term Investments | 253.73M | 271.80M | 298.17M | 277.05M | 264.38M | 1.17B |
| Total Debt | 12.29B | 12.29B | 12.37B | 10.93B | 9.30B | 8.23B |
| Total Liabilities | 22.33B | 22.77B | 21.93B | 20.34B | 18.81B | 16.31B |
| Stockholders Equity | -2.78B | -3.41B | -4.75B | -4.35B | -3.54B | -1.80B |
Cash Flow | ||||||
| Free Cash Flow | 1.18B | 1.79B | 1.93B | 2.14B | 2.54B | 2.90B |
| Operating Cash Flow | 2.27B | 3.12B | 3.00B | 2.94B | 3.21B | 3.52B |
| Investing Cash Flow | -1.15B | -1.40B | -1.29B | -876.18M | -648.10M | -601.78M |
| Financing Cash Flow | -1.11B | -1.75B | -1.68B | -2.06B | -3.47B | -3.50B |
AutoZone Technical Analysis
Negative
3572.38
Price Trends
3403.98
Negative
3523.95
Negative
3700.29
Negative
Market Momentum
-125.25
Positive
36.77
Neutral
22.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZO, the sentiment is Negative. The current price of 3572.38 is above the 20-day moving average (MA) of 3259.85, above the 50-day MA of 3403.98, and below the 200-day MA of 3700.29, indicating a bearish trend. The MACD of -125.25 indicates Positive momentum. The RSI at 36.77 is Neutral, neither overbought nor oversold. The STOCH value of 22.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AZO.
AutoZone Risk Analysis
AutoZone disclosed 22 risk factors in its most recent earnings report. AutoZone reported the most risks in the "Production" 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $15.80B | 41.19 | 6.34% | 1.24% | 2.36% | 34.03% | |
70 Outperform | $3.83B | 20.18 | 13.06% | ― | 5.04% | -10.80% | |
63 Neutral | $73.26B | 29.09 | -263.22% | ― | 7.92% | 12.42% | |
62 Neutral | $875.17M | 18.94 | 6.69% | 3.32% | 18.32% | 45.19% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | $50.78B | 20.71 | -80.35% | ― | 5.74% | -1.73% | |
57 Neutral | $6.50B | 12.48 | 7.93% | 4.00% | -1.37% | -24.48% |
* Consumer Cyclical Sector Average
AZO
AutoZone
3,116.43
-602.81
-16.21%
BWA
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127.87%
DORM
Dorman Products
127.03
0.36
0.28%
LKQ
LKQ
25.22
-12.30
-32.77%
ORLY
O'Reilly Auto
90.33
-1.52
-1.65%
SMP
Standard Motor Products
39.23
10.55
36.77%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.