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

Zacks Equity Research

In the latest trading session, AutoZone (AZO) closed at $1,105.11, marking a -0.17% move from the previous day. This change lagged the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.09%, while the tech-heavy Nasdaq added 0.4%.

Coming into today, shares of the auto parts retailer had lost 4.78% in the past month. In that same time, the Retail-Wholesale sector gained 0.12%, while the S&P 500 lost 0.14%.

AZO will be looking to display strength as it nears its next earnings release. On that day, AZO is projected to report earnings of $13.96 per share, which would represent year-over-year growth of 3.64%. 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 $65.36 per share and revenue of $12.14 billion. These results would represent year-over-year changes of +3.04% and +2.34%, respectively.

It is also important to note the recent changes to analyst estimates for AZO. These recent revisions tend to reflect the evolving nature of short-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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 0.31% lower. AZO currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, AZO is holding a Forward P/E ratio of 16.94. This represents a discount compared to its industry's average Forward P/E of 18.97.

Meanwhile, AZO's PEG ratio is currently 1.39. 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. The Automotive - Retail and Wholesale - Parts industry currently had an average PEG ratio of 1.52 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 114, which puts it in the top 45% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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