Education
About Us
Working with TipRanks
Follow Us
AutoZone (AZO)
NYSE:AZO
Top Page
AutoZone
(NYSE:AZO)71Outperform
Positive Factors
Commercial Growth
Commercial outperformed, growing +7.3% y/y, supported by ongoing share growth at both National and Independent accounts.
Market Share Initiatives
Management continues to sound confident that its initiatives to capture market share in what is still a very fragmented industry will gain momentum.
Negative Factors
Financial Performance
AZO's FY2Q25 results, outside of SSS, were slightly below expectations, impacted by weather headwinds and ongoing growth investments.
AutoZone (AZO) vs. S&P 500 (SPY)
Market Cap
$59.68B
Dividend YieldN/A
Average Volume (3M)112.89K
Price to Earnings (P/E)24.3
Beta (1Y)0.52
Revenue Growth5.19%
EPS Growth8.31%
CountryUS
Employees126,000
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)149.09
Shares Outstanding16,782,160
10 Day Avg. Volume148,764
30 Day Avg. Volume112,891
Financial Highlights & Ratios
PEG Ratio5.17
Price to Book (P/B)N/A
Price to Sales (P/S)3.21
Price to Cash Flow (P/CF)18.40
P/FCF Ratio18.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3,813.00Price Target Upside5.48% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering22
AutoZone Business Overview & Revenue Model
Company DescriptionAutoZone, Inc. is a leading retailer and distributor of automotive replacement parts and accessories in the United States. Founded in 1979 and headquartered in Memphis, Tennessee, the company operates in the automotive aftermarket industry, providing a wide range of products including parts, maintenance items, and accessories for cars, sport utility vehicles, vans, and light trucks. AutoZone serves both DIY (do-it-yourself) customers and professional service providers, ensuring access to high-quality auto parts and expert advice across its extensive network of stores and online platform.
How the Company Makes MoneyAutoZone generates revenue primarily through the sale of automotive replacement parts and accessories. The company's key revenue streams include retail sales to individual customers and commercial sales to professional automotive service providers. The retail segment targets DIY customers who purchase products in-store or online, often seeking advice from knowledgeable staff. The commercial segment caters to mechanics and repair shops with the need for reliable supply chains and timely delivery of parts. Additionally, AutoZone benefits from its extensive inventory and distribution network, ensuring product availability and efficient logistics. Partnerships with automotive manufacturers, suppliers, and technology providers also play a significant role in enhancing product offerings and customer experience, thereby contributing to the company's earnings.
AutoZone Financial Statement Overview
Summary
AutoZone shows strong profitability and robust cash flow, with high operating and EBIT margins. However, there is significant financial risk due to a highly leveraged balance sheet with negative equity. Despite this, strong cash generation provides a buffer.Income Statement
AutoZone demonstrates strong profitability with a high gross profit margin of 53.1% and a solid net profit margin of 14.2% for TTM. The EBIT margin is robust at 20.3%, indicating efficient operational management. Revenue growth is modest at 0.5%, suggesting stable, albeit slow, top-line expansion. Overall, the company maintains strong profitability metrics in the retail industry.85
Very Positive
Balance Sheet
The balance sheet shows high leverage with a negative stockholders' equity of -$17.6 billion, resulting in an undefined debt-to-equity ratio. This indicates potential financial risk. The equity ratio is also negative at -100.9%, suggesting all assets are financed by debt, posing concerns over financial stability despite continued profitability.45
Neutral
Cash Flow
AutoZone's cash flow performance is robust, with an operating cash flow to net income ratio of 1.13, indicating strong cash generation relative to net income. The free cash flow to net income ratio stands at 0.72, supporting solid cash flow management. However, free cash flow growth is slightly negative at -1.6%, which might indicate a plateau in cash flow expansion.78
Positive
| Breakdown | ||
| TTM | Sep 2024 | |
|---|---|---|
| Income Statement | Total Revenue | |
| 18.58B | 18.49B | Gross Profit |
| 9.87B | 9.82B | EBIT |
| 3.78B | 3.79B | EBITDA |
| 4.21B | 4.35B | Net Income Common Stockholders |
| 2.63B | 2.66B | |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 304.02M | 298.17M | Total Assets |
| 17.47B | 17.18B | Total Debt |
| 12.27B | 12.37B | Net Debt |
| 11.96B | 12.07B | Total Liabilities |
| 22.14B | 21.93B | Stockholders Equity |
| -17.62B | -4.75B | |
| Cash Flow | Free Cash Flow | |
| 1.90B | 1.93B | Operating Cash Flow |
| 2.99B | 3.00B | Investing Cash Flow |
| -1.28B | -1.29B | Financing Cash Flow |
| -1.67B | -1.68B |
AutoZone Technical Analysis
Positive
3614.97
Price Trends
3361.88
Positive
3265.74
Positive
3138.22
Positive
Market Momentum
55.47
Negative
70.52
Negative
94.82
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 3614.97 is above the 20-day moving average (MA) of 3455.33, above the 50-day MA of 3361.88, and above the 200-day MA of 3138.22, indicating a bullish trend. The MACD of 55.47 indicates Negative momentum. The RSI at 70.52 is Negative, neither overbought nor oversold. The STOCH value of 94.82 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $11.03B | 12.03 | 18.50% | 2.69% | 3.14% | -11.22% | |
72 Outperform | $76.73B | 32.73 | -174.09% | ― | 5.67% | 5.40% | |
71 Outperform | $59.68B | 24.25 | -14.95% | ― | 5.19% | 8.31% | |
71 Outperform | $10.90B | 16.08 | 11.33% | 2.81% | 3.53% | -25.71% | |
67 Neutral | $17.16B | 19.10 | 20.69% | 3.23% | 1.71% | -30.78% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
45 Neutral | $2.05B | 59.62 | -23.45% | 2.97% | -9.34% | -852.37% |
* Consumer Cyclical Sector Average
Performance Comparison
AZO
AutoZone
3,614.97
554.69
18.13%
AAP
Advance Auto Parts
35.37
-38.94
-52.40%
GPC
Genuine Parts Company
127.17
-20.70
-14.00%
LKQ
LKQ
43.38
-6.93
-13.77%
ORLY
O'Reilly Auto
1,319.01
232.88
21.44%
PAG
Penske Automotive Group
169.20
21.03
14.19%
AutoZone Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: 3.95% | 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.Highlights
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.
Lowlights
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.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.