AutoZone Inc. (AZO)
Consumer · NYSE · US
Fundamentals
Valuation and ratings
AutoZone Inc. trades at $3,062.16, close to the $2,914.07 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 52 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 21.1 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About AutoZone Inc.
AutoZone, Inc. operates as a retailer and distributor of automotive replacement parts and accessories in the United States, Mexico, and Brazil. The company offers a product line for cars, sport utility vehicles, vans, and light duty trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. It also provides A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps, as well as tire repairs. In addition, the company provides maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers. Further, it offers air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, tools, vehicle entertainment systems, and wash and wax products, as well as towing services. Additionally, the company provides a sales program that offers commercial credit and delivery of parts and other products; sells automotive diagnostic, repair, collision, and shop management information software under the ALLDATA brand through alldata.com; Duralast branded products through duralastparts.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com. AutoZone, Inc. was founded in 1979 and is headquartered in Memphis, Tennessee.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Parnassus Investments, PARNASSUS INVESTMENTS, LLC$660.86M · 1.9% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$404.59M · 0.2% of book
- Baillie Gifford, BAILLIE GIFFORD & CO$271.19M · 0.3% of book
- Two Sigma, TWO SIGMA INVESTMENTS, LP$185.33M · 0.1% of book
- D. E. Shaw, D. E. Shaw & Co., Inc.$148.74M · 0.1% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is AutoZone Inc. (AZO) undervalued?
Against our discounted cash flow estimate of $2,914.07, AZO at $3,062.16 is 5% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own AZO?
5 of the institutions we track reported a position in AZO in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is AZO's P/E ratio?
AZO trades at 21.1 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.