AutoZone Inc (NYSE:AZO): What’s The Analyst Consensus Outlook?
AutoZone Inc’s (NYSE:AZO) most recent earnings update in August 2018 confirmed that the business benefited from a small tailwind, leading to a single-digit earnings growth of 4.4%. Below, I’ve laid out key numbers on how market analysts perceive AutoZone’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
See our latest analysis for AutoZone
Analysts’ expectations for the coming year seems positive, with earnings increasing by a robust 10.8%. This growth seems to continue into the following year with rates arriving at double digit 11.3% compared to today’s earnings, and finally hitting US$1.54b by 2021.
While it is helpful to understand the rate of growth each year relative to today’s level, it may be more beneficial to estimate the rate at which the company is rising or falling every year, on average. The advantage of this method is that we can get a better picture of the direction of AutoZone’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 4.5%. This means that, we can anticipate AutoZone will grow its earnings by 4.5% every year for the next few years.
Next Steps:
For AutoZone, I’ve compiled three fundamental factors you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is AZO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether AZO is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of AZO? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
