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

Zacks Equity Research

In the latest trading session, AutoZone (AZO) closed at $1,187.65, marking a +1.35% move from the previous day. This move outpaced the S&P 500's daily gain of 0.05%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.11%.

Heading into today, shares of the auto parts retailer had gained 6.04% over the past month, outpacing the Retail-Wholesale sector's gain of 1.18% and the S&P 500's gain of 4.32% in that time.

Investors will be hoping for strength from AZO as it approaches 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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $65.39 per share and revenue of $12.14 billion, which would represent changes of +3.09% and +2.34%, respectively, from the prior year.

Any recent changes to analyst estimates for AZO should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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.

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. The Zacks Consensus EPS estimate has moved 0.05% higher within the past month. AZO is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, AZO is holding a Forward P/E ratio of 17.92. This represents a discount compared to its industry's average Forward P/E of 19.52.

Meanwhile, AZO's PEG ratio is currently 1.47. 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 was holding an average PEG ratio of 1.62 at yesterday's closing price.

The Automotive - Retail and Wholesale - Parts industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 28, 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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