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AutoZone (AZO) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, AutoZone (AZO - Free Report) closed at $835.63, marking a -1.18% move from the previous day. This change lagged the S&P 500's daily gain of 3.43%. Elsewhere, the Dow gained 3.29%, while the tech-heavy Nasdaq added 4.26%.

Heading into today, shares of the auto parts retailer had lost 2.66% over the past month, outpacing the Retail-Wholesale sector's loss of 12.39% and the S&P 500's loss of 12.15% in that time.

Investors will be hoping for strength from AZO as it approaches its next earnings release, which is expected to be February 26, 2019. The company is expected to report EPS of $9.87, down 4.91% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.45 billion, up 1.5% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $59.07 per share and revenue of $11.78 billion. These totals would mark changes of +17.34% and +5.01%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for AZO. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.86% higher. AZO is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note AZO's current valuation metrics, including its Forward P/E ratio of 14.31. This represents a discount compared to its industry's average Forward P/E of 19.32.

We can also see that AZO currently has a PEG ratio of 1.19. 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 1.21 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 10, which puts it in the top 4% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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