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Memphis, Tennessee-based AutoZone, Inc. (AZO) is a leading retailer in the automotive aftermarket industry, known for its comprehensive selection of automotive parts, tools, and accessories. With a market cap of $51 billion, AZO is a key player in the retail sector, offering exceptional customer service and expert advice to both professional mechanics and DIY enthusiasts. Competing fiercely with other automotive retailers, AutoZone's primary rival is O'Reilly Automotive (ORLY), renowned for its extensive inventory and top-tier customer service.
Companies valued at $10 billion or more are generally considered "large-caps," and AutoZone fits this criterion perfectly, signifying its substantial size, stability, and influence in the automotive aftermarket industry.
AZO shares are trading 8.3% below their 52-week high of $3,256.37, which they hit on Mar. 22. Also, the stock has declined 7.8% over the past three months, underperforming the S&P 500 Index’s ($SPX) 4.1% returns over the same time frame.
Longer term, AZO is up 15.5% on a YTD basis, and the shares have gained 23.2% over the past 52 weeks. In comparison, the S&P 500 has gained 14.2% in 2024 and 25.3% over the past year.
However, to confirm the bullish price action, AZO has been trading above its 200-day moving average since late May and has recently been trading above the 50-day moving average.
AZO reported its Q3 results on May 21. The company reported a profit of $651.7 million, translating to a net income of $36.69 per share, surpassing Wall Street expectations of $35.67 per share. However, the company's revenue of $4.24 billion fell short of the anticipated $4.29 billion forecasted by analysts. The stock declined 3.5% on the earnings release day.
Highlighting the contrast in performance, AZO's competitor, ORLY, has underperformed AZO, with a 14.1% gain on a YTD basis.
Despite AZO's recent underperformance compared to SPX, analysts are optimistic about its prospects. The stock has a consensus rating of "Strong Buy" from 22 analysts in coverage. The mean price target of $3181.35 reflects a 6.6% premium over current levels.
On the date of publication, Rashmi Kumari 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.
