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AutoZone (AZO)
NYSE:AZO
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AutoZone
(NYSE:AZO)
73Outperform
Positive Factors
International Growth
There are white space opportunities for AutoZone in Mexico and Brazil, suggesting continued international growth.
Market Share Growth
AutoZone is experiencing commercial market share gains, particularly as its parts availability initiatives gain traction in the fragmented auto parts aftermarket.
Negative Factors
Currency Impact
AutoZone's international business faced significant foreign exchange headwinds due to the strengthening USD.
Earnings Performance
AutoZone's EPS was below consensus due to the negative impact of currency movements.
AutoZone (AZO) vs. S&P 500 (SPY)
Market Cap
$58.19B
Dividend YieldN/A
Average Volume (3M)168.79K
Price to Earnings (P/E)23.5
Beta (1Y)0.41
Revenue Growth4.72%
EPS Growth4.69%
CountryUS
Employees75,600
SectorConsumer Cyclical
Sector Strength55
IndustrySpecialty Retail
Share Statistics
EPS (TTM)149.09
Shares Outstanding16,728,657
10 Day Avg. Volume195,436
30 Day Avg. Volume168,789
Financial Highlights & Ratios
PEG Ratio5.00
Price to Book (P/B)N/A
Price to Sales (P/S)3.26
Price to Cash Flow (P/CF)18.60
P/FCF Ratio18.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3,831.85Price Target Upside7.18% 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 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 demonstrates strong profitability and cash flow generation, critical for sustaining operations and growth. However, significant leverage and a negative equity position pose financial risks that could impact 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 | ||||
| 98.01M | 298.17M | 277.05M | 264.38M | 1.17B | 1.75B | Total Assets |
| 5.64B | 17.18B | 15.99B | 15.28B | 14.52B | 14.42B | Total Debt |
| 2.88B | 12.37B | 10.93B | 9.30B | 8.23B | 8.31B | Net Debt |
| 2.78B | 12.07B | 10.65B | 9.03B | 7.06B | 6.56B | Total Liabilities |
| 6.46B | 21.93B | 20.34B | 18.81B | 16.31B | 15.30B | Stockholders Equity |
| -817.17M | -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
Neutral
3575.12
Price Trends
3538.78
Positive
3387.49
Positive
3232.95
Positive
Market Momentum
86.11
Negative
69.97
Neutral
85.57
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZO, the sentiment is Neutral. The current price of 3575.12 is below the 20-day moving average (MA) of 3659.25, above the 50-day MA of 3538.78, and above the 200-day MA of 3232.95, indicating a neutral trend. The MACD of 86.11 indicates Negative momentum. The RSI at 69.97 is Neutral, neither overbought nor oversold. The STOCH value of 85.57 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $58.19B | 23.47 | -14.95% | ― | 4.72% | 4.69% | |
71 Outperform | $10.76B | 15.91 | 11.33% | 3.11% | 3.53% | -25.71% | |
70 Outperform | $77.19B | 33.16 | -174.09% | ― | 5.67% | 5.40% | |
70 Outperform | $9.38B | 10.23 | 18.50% | 3.16% | 3.14% | -11.22% | |
68 Neutral | $15.31B | 17.05 | 20.69% | 3.82% | 1.71% | -30.78% | |
59 Neutral | $11.74B | 10.16 | -1.06% | 4.15% | 1.27% | -16.61% | |
45 Neutral | $1.94B | 59.62 | -23.45% | 3.30% | -9.34% | -852.37% |
* Consumer Cyclical Sector Average
Performance Comparison
AZO
AutoZone
3,575.12
568.36
18.90%
AAP
Advance Auto Parts
33.47
-39.68
-54.24%
GPC
Genuine Parts Company
113.29
-28.43
-20.06%
LKQ
LKQ
41.61
-6.94
-14.29%
ORLY
O'Reilly Auto
1,348.45
265.45
24.51%
PAG
Penske Automotive Group
152.93
6.60
4.51%
AutoZone Earnings Call Summary
Earnings Call Date: Mar 4, 2025 | % Change Since: 2.80% | 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.