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

Zacks Equity Research

AutoZone (AZO) closed the most recent trading day at $1,129.47, moving +0.51% from the previous trading session. This change outpaced the S&P 500's 0.41% gain on the day. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq added 0.7%.

Prior to today's trading, shares of the auto parts retailer had gained 3.51% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.61% and the S&P 500's gain of 2.04% in that time.

AZO will be looking to display strength as it nears its next earnings release. In that report, analysts expect AZO to post earnings of $13.94 per share. This would mark year-over-year growth of 3.49%. Our most recent consensus estimate is calling for quarterly revenue of $2.76 billion, up 4.61% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $65.39 per share and revenue of $12.14 billion. These totals would mark changes of +3.09% and +2.34%, respectively, from last year.

Any recent changes to analyst estimates for AZO should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Within the past 30 days, our consensus EPS projection has moved 0.01% lower. AZO currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that AZO has a Forward P/E ratio of 17.18 right now. For comparison, its industry has an average Forward P/E of 19.48, which means AZO is trading at a discount to the group.

Meanwhile, AZO's PEG ratio is currently 1.41. 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 1.59 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 95, which puts it in the top 38% 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.

To follow AZO in the coming trading sessions, be sure to utilize Zacks.com.

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