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AutoZone (AZO) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, AutoZone (AZO - Free Report) closed at $2,245.99, marking a -0.95% move from the previous day. This move lagged the S&P 500's daily loss of 0.33%. Elsewhere, the Dow lost 0.1%, while the tech-heavy Nasdaq lost 0.24%.

Heading into today, shares of the auto parts retailer had gained 6.04% over the past month, outpacing the Retail-Wholesale sector's loss of 11.72% and the S&P 500's loss of 11.67% in that time.

Wall Street will be looking for positivity from AutoZone as it approaches its next earnings report date. In that report, analysts expect AutoZone to post earnings of $25.21 per share. This would mark a year-over-year decline of 1.87%. Our most recent consensus estimate is calling for quarterly revenue of $3.83 billion, up 4.28% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $125.22 per share and revenue of $17.05 billion. These totals would mark changes of +6.85% and +4.88%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for AutoZone. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.62% higher. AutoZone is currently a Zacks Rank #3 (Hold).

In terms of valuation, AutoZone is currently trading at a Forward P/E ratio of 18.11. This valuation marks a premium compared to its industry's average Forward P/E of 16.17.

Also, we should mention that AZO has a PEG ratio of 1.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Automotive - Retail and Wholesale - Parts stocks are, on average, holding a PEG ratio of 1.64 based on yesterday's closing prices.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 222, putting it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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