Memphis, Tennessee-based AutoZone, Inc. (AZO) is a retailer and distributor of automotive replacement parts and accessories. Valued at a market cap of $61.6 billion, the company provides an extensive product line for cars, SUVs, vans, and light-duty trucks, specializing in both new and remanufactured hard parts, maintenance items, and non-automotive products.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and AutoZone fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the auto parts industry. The company's primary strength is its sophisticated 'Hub and Spoke' distribution network, anchored by over 140 Mega-Hubs that ensure industry-leading parts availability for both its traditional DIY customers and its rapidly growing Commercial segment.
This auto parts provider has dipped 15.7% from its 52-week high of $4,388.11, reached on Sep. 11. Shares of AZO have declined 3.3% over the past three months, underperforming the Dow Jones Industrial Average’s ($DOWI) marginal rise during the same time frame.
Moreover, in the longer term, AZO has gained 4% over the past 52 weeks, lagging behind DOWI’s 11.4% gain over the same period. However, on a YTD basis, shares of AZO are up 9.1%, outpacing DOWI’s slight drop.
To confirm its recent bullish trend, AZO has been trading above its 50-day moving average since mid-January. However, it has remained below its 200-day moving average since early December, with slight fluctuations.
On Mar. 3, shares of AZO plunged 6.3% after its mixed Q2 earnings release. The company’s revenue increased 8.1% year-over-year to $4.3 billion, but missed analyst estimates by a slight margin, which might have made investors jittery. Nonetheless, its EPS of $27.63 declined 2.3% from the year-ago quarter but topped Wall Street's $27.10 estimate.
AZO has underperformed its rival, O'Reilly Automotive, Inc. (ORLY), which gained 5.5% over the past 52 weeks. However, it has outpaced ORLY’s 3.3% YTD rise.
Despite AZO’s recent underperformance, analysts remain highly optimistic about its prospects. The stock has a consensus rating of "Strong Buy” from the 29 analysts covering it, and the mean price target of $4,267.74 suggests a 15.1% premium to its current price levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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