AutoZone (AZO) AI Stock Analysis

• Market Cap: $58.30B
• Dividend Yield: N/A
• Average Volume (3M): 108.22K
• Price to Earnings (P/E): 23.2
• Beta (1Y): 0.51
• Revenue Growth: 5.19%
• EPS Growth: 8.31%
• Country: US
• Employees: 126,000
• Sector: Consumer Cyclical
• Sector Strength: 53
• Industry: Retail - Discretionary
• EPS (TTM): 149.69
• Shares Outstanding: 16,782,160
• 10 Day Avg. Volume: 129,605
• 30 Day Avg. Volume: 108,225
• PEG Ratio: 2.79
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.14
• Price to Cash Flow (P/CF): 18.00
• P/FCF Ratio: 18.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $3,705.74
• Price Target Upside: 6.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 20

AutoZone's stock is bolstered by strong profitability and cash flow performance, along with positive market momentum. However, high leverage poses financial risk, and valuation metrics suggest the stock might be overvalued. Earnings call insights highlight growth potential in international and commercial segments but also present challenges such as FX headwinds.

Positive Factors

Long-term Growth

Investments in IT and other areas are intended to position AutoZone for stronger long-term market share growth.

Market Share Growth

Strong DIFM acceleration indicates improved market share growth and better execution in areas like in-stock and delivery.

Negative Factors

Financial Performance

SG&A expenses were higher than expected, which may pressure short-term financial results.

AutoZone Business Overview & Revenue Model

Company Description

Incorporated in 1979, Tennessee-based AutoZone, Inc. retails and distributes automotive replacement parts and accessories.

How the Company Makes Money

AutoZone 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's financial performance is characterized by strong profitability and cash flow metrics that support its operations. However, the balance sheet is highly leveraged with negative equity, raising concerns over financial risk. The company's financial health relies on maintaining cash flow and managing debt.

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.

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.

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.

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
298.17M	298.17M
	Total Assets
17.18B	17.18B
	Total Debt
12.37B	12.37B
	Net Debt
12.07B	12.07B
	Total Liabilities
21.93B	21.93B
	Stockholders Equity
-4.75B	-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

• Technical Analysis Sentiment: Positive
• Last Price: 3473.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 3473.66 is above the 20-day moving average (MA) of 3435.99, above the 50-day MA of 3340.29, and above the 200-day MA of 3128.03, indicating a bullish trend. The MACD of 31.65 indicates Negative momentum. The RSI at 59.14 is Neutral, neither overbought nor oversold. The STOCH value of 75.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AZO.

AutoZone Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAG	78 Outperform	$11.26B	12.28	17.64%	2.63%	3.14%	-11.22%
ORLY	72 Outperform	$77.71B	33.37	-174.09%	―	5.67%	5.40%
AZO	71 Outperform	$58.30B	23.21	-14.95%	―	5.19%	8.31%
LKQ	71 Outperform	$10.93B	16.14	11.38%	2.86%	3.53%	-25.71%
GPC	67 Neutral	$17.33B	19.29	20.84%	3.23%	1.71%	-30.78%
Sector *	60 Neutral	$13.01B	10.45	0.79%	3.53%	1.60%	-22.47%
AAP	45 Neutral	$2.21B	59.62	-15.47%	2.82%	-9.34%	-852.37%