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AutoZone (AZO) Gains But Lags Market: What You Should Know

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AutoZone (AZO - Free Report) closed at $2,543.50 in the latest trading session, marking a +0.86% move from the prior day. This change lagged the S&P 500's 2.46% gain on the day. Meanwhile, the Dow gained 2.59%, and the Nasdaq, a tech-heavy index, lost 0.23%.

Coming into today, shares of the auto parts retailer had gained 16.8% in the past month. In that same time, the Retail-Wholesale sector gained 1.68%, while the S&P 500 gained 4.56%.

Wall Street will be looking for positivity from AutoZone as it approaches its next earnings report date. On that day, AutoZone is projected to report earnings of $25.05 per share, which would represent a year-over-year decline of 2.49%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales 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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.05% higher within the past month. AutoZone currently has a Zacks Rank of #3 (Hold).

Digging into valuation, AutoZone currently has a Forward P/E ratio of 20.14. For comparison, its industry has an average Forward P/E of 17.3, which means AutoZone is trading at a premium to the group.

We can also see that AZO currently has a PEG ratio of 1.52. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Automotive - Retail and Wholesale - Parts stocks are, on average, holding a PEG ratio of 1.82 based on yesterday's closing prices.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 177, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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