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

Zacks Equity Research

AutoZone (AZO) closed the most recent trading day at $1,166.97, moving -0.86% from the previous trading session. This move lagged the S&P 500's daily gain of 0.16%. Elsewhere, the Dow 0%, while the tech-heavy Nasdaq added 0.26%.

Heading into today, shares of the auto parts retailer had gained 8.32% over the past month, outpacing the Retail-Wholesale sector's gain of 2.09% and the S&P 500's gain of 4.12% 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 help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate has moved 0.05% higher within the past month. AZO is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, AZO is currently trading at a Forward P/E ratio of 18. For comparison, its industry has an average Forward P/E of 19.66, which means AZO is trading at a discount to the group.

Investors should also note that AZO has a PEG ratio of 1.48 right now. 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 was holding an average PEG ratio of 1.61 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 26, which puts it in the top 11% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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