AutoZone, Inc. Fundamental Analysis (NYSE: AZO)
AutoZone, Inc. (NYSE: AZO) shows weak financial fundamentals with a PE ratio of 18.30, profit margin of 12.65%, and ROE of -90.08%. The company generates $20.1B in annual revenue with weak year-over-year growth of 2.43%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 11.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze AZO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentAZO demonstrates superior asset utilization.
Valuation Score
ModerateAZO shows balanced valuation metrics.
Growth Score
WeakAZO faces weak or negative growth trends.
Financial Health Score
ModerateAZO shows balanced financial health with some risks.
Profitability Score
WeakAZO struggles to sustain strong margins.
Key Financial Metrics
Is AZO Expensive or Cheap?
P/E Ratio
AZO trades at 18.30 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, AZO's PEG of 3.73 indicates potential overvaluation.
Price to Book
The market values AutoZone, Inc. at -18.81 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 8.24 times EBITDA. This is generally considered low.
How Well Does AZO Make Money?
Net Profit Margin
For every $100 in sales, AutoZone, Inc. keeps $12.65 as profit after all expenses.
Operating Margin
Core operations generate 18.31 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-90.08 in profit for every $100 of shareholder equity.
ROA
AutoZone, Inc. generates $11.89 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
AutoZone, Inc. produces operating cash flow of $2.10B, showing steady but balanced cash generation.
Free Cash Flow
AutoZone, Inc. produces free cash flow of $1.11B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $68.08 in free cash annually.
FCF Yield
AZO converts 2.40% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
18.30
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.73
vs 25 benchmark
P/B Ratio
Price to book value ratio
-18.81
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.29
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-4.97
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.90
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.90
vs 25 benchmark
ROA
Return on assets percentage
0.12
vs 25 benchmark
ROCE
Return on capital employed
0.32
vs 25 benchmark
How AZO Stacks Against Its Sector Peers
| Metric | AZO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 18.30 | 23.63 | Better (Cheaper) |
| ROE | -90.08% | 996.00% | Weak |
| Net Margin | 12.65% | -3056.00% (disorted) | Strong |
| Debt/Equity | -4.97 | 0.59 | Strong (Low Leverage) |
| Current Ratio | 0.90 | 2.34 | Weak Liquidity |
| ROA | 11.89% | 346.00% | Weak |
AZO outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews AutoZone, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
110.21%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
102.13%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
60.69%
Industry Style: Cyclical, Growth, Discretionary
High Growth