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AutoZone (AZO) Exceeds Market Returns: Some Facts to Consider

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The most recent trading session ended with AutoZone (AZO - Free Report) standing at $3,459, reflecting a +0.78% shift from the previouse trading day's closing. The stock outperformed the S&P 500, which registered a daily gain of 0.72%. On the other hand, the Dow registered a gain of 0.3%, and the technology-centric Nasdaq increased by 1.35%.

The the stock of auto parts retailer has risen by 4.21% in the past month, lagging the Retail-Wholesale sector's gain of 6.17% and overreaching the S&P 500's gain of 1.02%.

The investment community will be paying close attention to the earnings performance of AutoZone in its upcoming release. The company is slated to reveal its earnings on March 4, 2025. On that day, AutoZone is projected to report earnings of $29.11 per share, which would represent year-over-year growth of 0.76%. Simultaneously, our latest consensus estimate expects the revenue to be $3.98 billion, showing a 3.13% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $152.94 per share and revenue of $18.79 billion. These totals would mark changes of +4.65% and +1.63%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for AutoZone. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% lower. Currently, AutoZone is carrying a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that AutoZone has a Forward P/E ratio of 22.44 right now. For comparison, its industry has an average Forward P/E of 24.31, which means AutoZone is trading at a discount to the group.

It is also worth noting that AZO currently has a PEG ratio of 1.9. 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 1.9 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 68, putting it in the top 28% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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


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