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

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AutoZone (AZO - Free Report) closed the most recent trading day at $1,144.38, moving -0.36% from the previous trading session. This move lagged the S&P 500's daily loss of 0.3%. Elsewhere, the Dow lost 0.52%, while the tech-heavy Nasdaq lost 0.14%.

Prior to today's trading, shares of the auto parts retailer had gained 9.08% over the past month. This has outpaced the Retail-Wholesale sector's gain of 2.22% and the S&P 500's gain of 2.46% in that time.

Investors will be hoping for strength from AZO as it approaches its next earnings release. The company is expected to report EPS of $13.94, up 3.49% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $2.76 billion, up 4.61% from the year-ago period.

AZO's full-year Zacks Consensus Estimates are calling for earnings of $65.39 per share and revenue of $12.14 billion. These results would represent year-over-year changes of +3.09% and +2.34%, respectively.

It is also important to note the recent changes to analyst estimates for AZO. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.25% higher. AZO is currently a Zacks Rank #3 (Hold).

Investors should also note AZO's current valuation metrics, including its Forward P/E ratio of 17.56. This represents a discount compared to its industry's average Forward P/E of 19.27.

We can also see that AZO currently has a PEG ratio of 1.44. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Automotive - Retail and Wholesale - Parts stocks are, on average, holding a PEG ratio of 1.59 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 63, putting it in the top 25% 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.

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