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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.

While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.

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.

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AutoZone (AZO)

AutoZone, Inc. is one of the leading specialty retailers and distributors 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 2023, the company had 6,300 stores in the United States, 740 in Mexico and 100 in Brazil. The total store count was 7,140 as of Aug 26, 2023. 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 sits at a Zacks Rank #3 (Hold), holds a Value Style Score of B, and has a VGM Score of B. Compared to the Automotive - Retail and Wholesale - Parts industry's P/E of 22.5X, shares of AutoZone are trading at a forward P/E of 18.3X. AZO also has a PEG Ratio of 1.4, a Price/Cash Flow ratio of 16.6X, and a Price/Sales ratio of 2.7X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Four analysts revised their earnings estimate upwards in the last 60 days for fiscal 2024. The Zacks Consensus Estimate has increased $0.42 to $151.75 per share. AZO has an average earnings surprise of 5.8%.

Investors should take the time to consider AZO for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.

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

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Zacks Investment Research