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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 $1,161.48, moving +0.91% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.07%. Elsewhere, the Dow 0%, while the tech-heavy Nasdaq lost 0.29%.

Coming into today, shares of the auto parts retailer had gained 9.68% in the past month. In that same time, the Retail-Wholesale sector gained 4.44%, while the S&P 500 gained 4.3%.

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%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales 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. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.27% higher. AZO is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, AZO is currently trading at a Forward P/E ratio of 17.6. Its industry sports an average Forward P/E of 19.6, so we one might conclude that AZO is trading at a discount comparatively.

We can also see that AZO currently has a PEG ratio of 1.44. 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. The Automotive - Retail and Wholesale - Parts industry currently had an average PEG ratio of 1.58 as of yesterday's close.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 27, which puts it in the top 11% 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.

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

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