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AutoZone (AZO) Valuation Check After Recent Share Price Pullback

Simply Wall St · 6d ago

AutoZone stock performance snapshot

AutoZone (AZO) has seen its share price under pressure recently, with a 2.6% decline over the past day and a 3.3% drop over the past week, drawing fresh attention from investors.

See our latest analysis for AutoZone.

The recent 30 day share price return of negative 13.6% and 90 day share price return of negative 19.1% suggest momentum has faded, even though the 5 year total shareholder return of 161.1% still reflects solid longer term compounding.

If AutoZone’s pullback has you reassessing opportunities in autos, this could be a useful moment to scan other auto manufacturers that fit your criteria.

With AutoZone shares under pressure and trading close to the estimated intrinsic value, yet at a discount of about 31% to analyst targets, investors may need to consider whether this represents a reset that opens a potential buying window or whether the market is already factoring in future growth.

Most Popular Narrative Narrative: 23.7% Undervalued

With AutoZone last closing at US$3,303.82 versus a narrative fair value of about US$4,331, the current gap centers on how future growth and margins play out.

In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 28.1x on those 2028 earnings, up from 28.0x today. This future PE is greater than the current PE for the US Specialty Retail industry at 18.7x.

Read the complete narrative.

Curious what kind of revenue and earnings path could support that higher multiple and fair value gap, and how buybacks fit in, without stretching the maths too far?

Result: Fair Value of $4,331.35 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you still need to weigh that foreign exchange and tariff pressures, along with higher SG&A from expansion and technology spend, could keep margins under pressure.

Find out about the key risks to this AutoZone narrative.

Build Your Own AutoZone Narrative

If you see the story differently or just prefer testing your own assumptions against the numbers, you can build a personalised view in a few minutes: Do it your way.

A great starting point for your AutoZone research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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If you are serious about sharpening your portfolio next, do not stop at one company. Use targeted stock ideas to spot opportunities before everyone else notices them.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.