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Why AutoZone (AZO) is a Top Value Stock for the Long-Term

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.

Achieving those goals is made easier with the Zacks Style Scores, a unique set of guidelines that rates stocks based on popular investing methodologies, namely value, growth, and momentum. The Style Scores can help you narrow down which stocks are better for your portfolio and which ones can beat the market over the long-term.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

AutoZone (AZO)

AutoZone, Inc. is one of the leading specialty retailers and distributor of automotive replacement parts and accessories in the United States. It operates in the Do-It-Yourself (DIY) retail, Do-It-for-Me (DIFM) auto parts and products markets. At the end of fiscal 2022, the company had 6,168 stores in the United States, 703 in Mexico and 72 in Brazil. The total store count was 6,943 as of Aug 27, 2022. Each store offers wide-ranging products for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products.

AZO boasts a Value Style Score of B and VGM Score of A, and holds a Zacks Rank #3 (Hold) rating. Shares of AutoZone are trading at a forward earnings multiple of 17.9X, as well as a PEG Ratio of 1.4, a Price/Cash Flow ratio of 15.7X, and a Price/Sales ratio of 2.5X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. 10 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2023. The Zacks Consensus Estimate has increased $1.81 to $129.64 per share. AZO has an average earnings surprise of 10.2%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding AZO to their portfolios.

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AutoZone, Inc. (AZO) : Free Stock Analysis Report

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