AutoZone Inc (AZO, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $2,548.65, AutoZone Inc has witnessed a daily gain of 2.97%, marked against a three-month change of 3.76%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that AutoZone Inc is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
AutoZone Inc's GF Score components are as follows:
- Financial strength rank: 4/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 5/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in profitability, growth, and momentum, and moderate ranks in financial strength and GF value, GuruFocus assigned AutoZone Inc the GF Score of 93 out of 100, which signals the highest outperformance potential.
AutoZone Inc Business Overview
AutoZone Inc is the premier seller of aftermarket automotive parts, tools, and accessories to do-it-yourself customers in the United States. The company derives an increasing proportion of its sales from domestic commercial customers, although its presence in its home market is still dominated by its do-it-yourself operation, which accounts for around 70% of sales in country. AutoZone also has a growing presence in Mexico and Brazil. AutoZone had 6,943 stores in the U.S. (6,168), Mexico (703), and Brazil (72) as of the end of fiscal 2022. The company has a market cap of $45.51 billion and sales of $17.11 billion, with an operating margin of 19.6%.
Profitability Rank Breakdown
The Profitability Rank shows AutoZone Inc's impressive standing among its peers in generating profit. AutoZone Inc's Operating Margin has increased (23.31%) over the past five years, as shown by the following data: 2019: 18.68; 2020: 19.14; 2021: 20.13; 2022: 20.13; 2023: 19.90.
The Piotroski F-Score confirms AutoZone Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency. AutoZone Inc's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, AutoZone Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 19%, which outperforms better than 81.39% of 1048 companies in the Retail - Cyclical industry. Moreover, AutoZone Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 20.8, and the rate over the past five years is 18.3. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given AutoZone Inc's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential outperformance. This analysis suggests that AutoZone Inc is a compelling investment opportunity for those seeking robust growth and profitability. GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
