Financial Analysis: AutoZone (AZO) versus Its Peers

AutoZone (NYSE:AZO) is one of 286 publicly-traded companies in the “Specialty Retail” industry, but how does it compare to its peers? We will compare AutoZone to related businesses based on the strength of its dividends, profitability, earnings, risk, valuation, analyst recommendations and institutional ownership.

Risk and Volatility

AutoZone has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, AutoZone’s peers have a beta of 1.69, indicating that their average stock price is 69% more volatile than the S&P 500.

Insider & Institutional Ownership

92.7% of AutoZone shares are held by institutional investors. Comparatively, 51.6% of shares of all “Specialty Retail” companies are held by institutional investors. 2.6% of AutoZone shares are held by company insiders. Comparatively, 20.9% of shares of all “Specialty Retail” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for AutoZone and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AutoZone	0	6	20	1	2.81
AutoZone Competitors	3520	15162	21106	544	2.46

AutoZone currently has a consensus target price of $4,040.87, indicating a potential upside of 33.61%. As a group, “Specialty Retail” companies have a potential upside of 5.12%. Given AutoZone’s stronger consensus rating and higher possible upside, equities analysts plainly believe AutoZone is more favorable than its peers.

Profitability

This table compares AutoZone and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AutoZone	12.40%	-80.35%	12.33%
AutoZone Competitors	-2.75%	-25.53%	2.88%

Earnings & Valuation

This table compares AutoZone and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
AutoZone	$18.94 billion	$2.50 billion	20.79
AutoZone Competitors	$6.97 billion	$390.24 million	23.19

AutoZone has higher revenue and earnings than its peers. AutoZone is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

AutoZone beats its peers on 9 of the 13 factors compared.

AutoZone Company Profile

AutoZone, Inc. retails and distributes automotive replacement parts and accessories in the United States, Mexico, and Brazil. The company provides various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. It also offers A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps, as well as tire repairs. In addition, the company provides maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers. Further, it offers air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, tools, vehicle entertainment systems, and wash and wax products, as well as towing services. Additionally, the company provides a sales program that offers commercial credit and delivery of parts and other products; sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com. AutoZone, Inc. was founded in 1979 and is headquartered in Memphis, Tennessee.