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 $2,669.56, AutoZone Inc has witnessed a daily gain of 0%, marked against a three-month change of 2.57%. A thorough analysis, underlined by the GF Score, suggests that AutoZone Inc is well-positioned for substantial growth in the near future.
What Is 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.
- Financial strength rank: 4/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 6/10
- 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 a high profitability and growth rank, but a slightly lower financial strength rank, GuruFocus assigned AutoZone Inc the GF Score of 94 out of 100, which signals the highest outperformance potential.
Understanding AutoZone Inc's Business
AutoZone Inc is the premier seller of aftermarket automotive parts, tools, and accessories to do-it-yourself customers in the United States. With a market cap of $46.16 billion and sales of $17.66 billion, the company boasts an impressive operating margin of 20.38%. AutoZone Inc 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 the country. AutoZone also has a growing presence in Mexico and Brazil, with 7,140 stores across these regions as of the end of fiscal 2023.
Profitability Rank Breakdown
The Profitability Rank showcases AutoZone Inc's impressive standing among its peers in generating profit. The company's Operating Margin has increased by 6.53% over the past five years, with margins of 18.68% in 2019, 19.14% in 2020, 20.13% in 2021 and 2022, and 19.90% in 2023. 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. Furthermore, AutoZone Inc's strong Predictability Rank of 3.5 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 20.3%, which outperforms 82.61% of 1,041 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 21.2, and the rate over the past five years is 21.4. This trend accentuates the company's continued capability to drive growth.
Next Steps
Considering AutoZone Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on this momentum can explore more companies with strong GF Scores using the GF Score Screen. With a solid track record and a strategic focus on expansion, AutoZone Inc stands as a compelling investment for those looking to drive their portfolio forward.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
