AZO AutoZone Inc

AutoZone is a leading retailer and distributor of automotive replacement parts and accessories, serving both DIY customers and professional repair shops. Sector: Consumer Discretionary.

AutoZone Inc (AZO) is an individual stock. The analysis below presents key financial metrics for the company, covering profitability, capital efficiency, valuation, margins, and growth.

On the question of capital productivity, ROIC is 27.61%, WACC is 6.28%, and the economic spread is 21.34%. On balance, the economic spread is positive and meaningful, suggesting the company are building rather than eroding intrinsic value. Supporting metrics show ROE at N/A and ROA at 12.10%, a combination that helps frame whether profitability strength is broad enough to hold through different market conditions. Taken together, the return profile suggests a company with credible compounding capacity if current operating execution persists.

Assessed on a multiple basis, trailing P/E of 23.81, forward P/E of 21.96, PEG of 1.50. Forward P/E tracks closely with trailing P/E — a sign that the market sees the current earnings run rate as a reasonable baseline going forward. Growth-adjusted, the multiple is in an acceptable range — the company is neither pricing in perfection nor offering a meaningful valuation discount. The company carries an aggregate current ratio of 0.89, pointing to constrained near-term balance sheet coverage. Overall, the valuation setup reads as a balance between expected growth and execution risk, with liquidity acting as an important stabilizer if macro conditions become less favorable.

The margin stack reads as follows: gross margin sits at 51.88%, operating margin at 18.08%, and free cash flow margin at 8.16%. The gross margin reading points to the company with solid but not outsized pricing power relative to direct costs. The company's operating margins are solid, pointing to overhead management that appears to be a relative strength. FCF margins are in a reasonable range, though there is room for improvement in how efficiently revenues convert to free cash. The profile is not weak, but it is uneven enough that execution and cost control remain central to the forward case.

Where growth and expectations intersect, the estimated 12-month price change of 26.90%, where analyst assumptions support a moderate upside case if execution remains steady, while TTM revenue growth of 8.15% suggesting the company is growing revenues at a measured, sustainable pace. Analyst estimates point to EPS growth of 8.4%, suggesting steady earnings progress that supports the current multiple on a forward basis. Both signals are useful lenses, but they tend to diverge most sharply near inflection points in both business fundamentals and market sentiment. The durability of both the operating trend and analyst optimism will determine whether the current setup translates into measurable near-term returns. The estimated 12-month price change is based on analyst consensus price target estimates, sourced from publicly available data, and should not be interpreted as a reliable prediction of future performance.

Putting all the pieces together, the fundamental picture is one of the more convincing setups in these metrics — strong capital returns, reasonable pricing, and a healthy forward outlook.

This summary is based on publicly available quantitative data and is not intended as investment advice. Carefully consider your personal financial circumstances before making any decisions.