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

In the latest trading session, AutoZone (AZO) closed at $2,195.68, marking a +1.64% move from the previous day. The stock outpaced the S&P 500’s daily gain of 0.57%. Elsewhere, the Dow gained 0.7%, while the tech-heavy Nasdaq lost 0.11%.

Coming into today, shares of the auto parts retailer had gained 6.56% in the past month. In that same time, the Retail-Wholesale sector lost 7.64%, while the S&P 500 lost 5.26%.

Investors will be hoping for strength from AutoZone as it approaches its next earnings. The company is expected to report EPS of $25.78, down 2.64% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.71 billion, up 1.53% from the year-ago period.

AZO’s full-year Zacks Consensus Estimates are calling for earnings of $111.68 per share and revenue of $15.86 billion. These results would represent year-over-year changes of +17.32% and +8.42%, respectively.

Investors might also notice recent changes to analyst estimates for AutoZone. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

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, 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 0.41% higher within the past month. AutoZone is currently a Zacks Rank #3 (Hold).

Investors should also note AutoZone’s current valuation metrics, including its Forward P/E ratio of 19.34. This represents a premium compared to its industry’s average Forward P/E of 17.6.

Also, we should mention that AZO has a PEG ratio of 1.71. 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. Automotive – Retail and Wholesale – Parts stocks are, on average, holding a PEG ratio of 1.48 based on yesterday’s closing prices.

The Automotive – Retail and Wholesale – Parts industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 228, putting it at the bottom 10% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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