Key Stats for AutoZone Stock
- Price change for AutoZone stock: -10%
- $AZO Share Price as of May. 27: $3,042
- 52-Week High: $4,388
- $AZO Stock Price Target: $4,205
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
AutoZone (AZO) stock dropped sharply on Tuesday after the auto parts retailer reported Q3 results that came in just below Wall Street’s revenue expectations.
- Revenue for the quarter came in at $4.84 billion — up 8.4% from a year ago but slightly short of the $4.86 billion analysts had expected.
- Adjusted EPS of $38.07 topped the $36.22 consensus forecast by a solid margin.
- But in this market, the revenue miss was enough to send AutoZone stock down roughly 10%.
The shortfall wasn’t entirely surprising in hindsight.
- CEO Phil Daniele noted that the last two weeks of the quarter were notably soft — domestic comps came in at just +1.3% during that stretch.
- The culprit was unseasonably cool and wet weather, which hit demand for heat-related products like air conditioning and starting and charging parts.
- Those categories typically pick up in May as summer approaches, but that tailwind simply didn’t show up this quarter.
See analysts’ growth forecasts and price targets for AutoZone stock (It’s free) >>>
What the Market Is Telling Us About AutoZone Stock
AutoZone stock selloff pulled down the broader auto parts sector. Shares of O’Reilly Auto Parts fell roughly 4% as well.
The reaction may be somewhat overdone. Strip out the weather noise, and the underlying business looks healthy.
- Domestic commercial sales grew 10.4% in the quarter.
- Both national accounts and smaller independent shops grew in double digits.
- Gross margin, excluding a noncash LIFO inventory accounting charge worth 77 basis points, was actually up 20 basis points year-over-year.
- The LIFO charge itself — $20 million this quarter versus a $16 million credit a year ago — created a meaningful year-over-year headwind, making the headline numbers look worse than the underlying business performance.
- Excluding that swing, EPS would have grown 12.5% rather than 7.7%.
Looking ahead, management expressed confidence that the weather-related softness will reverse. The company expects a hot summer, which historically drives strong demand for the categories that underperformed in May.
AutoZone also opened 82 new stores in the quarter and remains on track to open approximately 365 stores globally this fiscal year — its most aggressive expansion pace in years.
The Mega-Hub build-out continues too. AutoZone now has 156 Mega-Hub locations and plans to reach roughly 300. These stores carry over 100,000 SKUs and are generating sales above initial forecasts.
AutoZone stock may face some near-term pressure as investors digest the revenue miss, but the business fundamentals remain intact.
Estimate a company’s fair value instantly (Free with TIKR) >>>
How Much Upside Does AutoZone Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
