- Price
- $2953.00
- Fair value
- $3700.00
- Discount
- 20.2%
- Uncertainty
- Medium
- LSEG rating
- 1.89
- Moat
- Wide
- Next earnings
- 2026-09-22
- Next earnings is estimate
- No
- Company name
- AutoZone
- Sector
- Auto parts retail
- About
- AutoZone sells car parts. It runs retail stores, and it also sells parts in bulk to repair shops (the commercial business). AutoZone does not grow mainly by opening many new stores. It grows profit per share mainly by buying back its own stock every year.
- Thesis
- AutoZone buys back about 8% of its shares every year. This shrinking share count is the main reason profit per share has grown for years. The company borrows money to fund part of this buyback. The market may be underestimating how long this buyback pace can continue. If store sales keep growing and debt stays stable, the buyback can continue, and profit per share keeps compounding. This can close the discount.
- Risks
- AutoZone borrows money to fund its buyback. Net debt is about 2.78 times EBITDA. This is above the company's own past target range.
The buyback needs steady cash flow. Cash flow has grown slower than the buyback pace in recent years. If this gap continues, AutoZone may need to slow the buyback.
If the buyback slows, profit-per-share growth slows too. Part of the stock's value depends on the buyback continuing at its current pace.
- Recent events
- 2026-09-22: AutoZone is due to report its next results (Q4 FY2026) on this date.
2026-06-01: AutoZone's most recent quarter: sales grew 8.4%. Operating profit (EBIT) grew 6.6%. EBIT grew slower than sales, so the operating margin fell slightly.