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Category: Stock Market and AutoZone (AZO)
Date: 22 September 2020 Stock Price of Autozone (AZO): $1169.84 We take a look at the 4th quarter earnings release of their 2020 fiscal year of Autozone a automotive replacement parts supplier operating in the Americas. The group reported $4.5 billion in revenues for the quarter and net income of $740 million.
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More About AutoZone (AZO)
AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the Americas. Each AutoZone store carries an extensive product line for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. Many stores also have a commercial sales program that provides commercial credit and prompt delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts.
Overview of AutoZone's 4th quarter 2020 earnings report
The numbers we are interested in (for the quarter):
- Net sales: $4.545 billion (up from $3.98 billion from the same quarter of the previous year)
- Net sales increased by 14.1% over the last 12 months
- Cost of Sales: $2.132 billion (up from $1.858 billion for the same quarter of the previous year)
- Cost of sales increased by 14.7% over the last 12 months
- Some margin squeeze on Autozone as their net sales increased at a slower rate than their cost of sales
- Net income: $740.457 million (down from $351.406 million for the same quarter of the previous year)
- Diluted income per share: $30.93 (up from $22.59 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 23.942 million (down from 25.019 million for the same quarter of the previous year)
- Cash and cash equivalents: $1.75 billion
- Cash and cash equivalents per share: $73.09
- Cash and cash equivalents makes up 6.2% of AutoZone's market capital
- Cash and cash equivalents makes up 12.13% of AutoZone's total assets
- Inventories : $4.474 billion
- Inventories makes up 31% of AutoZone's total assets
AutoZone's management commentary on their 4th quarter 2020 earnings
MEMPHIS, Tenn., Dec. 10, 2019 (GLOBE NEWSWIRE) -- AutoZone, Inc. (NYSE: AZO) today reported net sales of $2.8 billion for its first quarter (12 weeks) ended November 23, 2019, an increase of 5.7% from the first quarter of fiscal 2019 (12 weeks). Domestic same store sales, or sales for stores open at least one year, increased 3.4% for the quarter.
Under its share repurchase program, AutoZone repurchased 403 thousand shares of its common stock for $450.0 million during the first quarter, at an average price of $1,116 per share. At the end of the first quarter, the Company had $1.3 billion remaining under its current share repurchase authorization.
Under its share repurchase program, AutoZone repurchased 403 thousand shares of its common stock for $450.0 million during the first quarter, at an average price of $1,116 per share. At the end of the first quarter, the Company had $1.3 billion remaining under its current share repurchase authorization.
The Company’s inventory increased 9.1% over the same period last year, driven by new stores and increased product placement. Inventory per store was $694 thousand versus $658 thousand last year and $674 thousand last quarter. Net inventory, defined as merchandise inventories less accounts payable, on a per store basis, was a negative $71 thousand versus negative $59 thousand last year and negative $85 thousand last quarter.
“I would like to thank and congratulate our entire organization for delivering solid sales and earnings in our first fiscal quarter. Our business strengthened during the quarter with accelerated growth in both Retail and Commercial. The hard work of our AutoZoners and their dedication to providing superior customer service, again drove our strong quarterly performance. As our industry’s fundamentals remain healthy, we are optimistic about what we can accomplish this new year, with our ongoing initiatives in place to improve inventory availability, drive DIY sales, and continue to grow Commercial substantially faster than industry growth. We believe our efforts will allow us to meet or exceed our customers’ needs across all channels. As we opportunistically invest capital in our business, we remain committed to our disciplined approach of increasing operating earnings and cash flow, and of utilizing our balance sheet and capital effectively,” said Bill Rhodes, Chairman, President and Chief Executive Officer.
“I would like to thank and congratulate our entire organization for delivering solid sales and earnings in our first fiscal quarter. Our business strengthened during the quarter with accelerated growth in both Retail and Commercial. The hard work of our AutoZoners and their dedication to providing superior customer service, again drove our strong quarterly performance. As our industry’s fundamentals remain healthy, we are optimistic about what we can accomplish this new year, with our ongoing initiatives in place to improve inventory availability, drive DIY sales, and continue to grow Commercial substantially faster than industry growth. We believe our efforts will allow us to meet or exceed our customers’ needs across all channels. As we opportunistically invest capital in our business, we remain committed to our disciplined approach of increasing operating earnings and cash flow, and of utilizing our balance sheet and capital effectively,” said Bill Rhodes, Chairman, President and Chief Executive Officer.
AutoZone (NYSE: AZO) stock price history
The image below, obtained from Google, shows the stock price history of AutoZone (NYSE: AZO) over the last 5 year. And it's been a good time for AutoZone stockholders. 5 years ago the stock of AutoZone was trading at $753 a stock, and its currently it's trading at $1166.71 Thats s return of 56.8% offered over the last 5 years.
The stock of Autozone is trading at a lot closer to its 52 week high of $1274.41 than it is to its 52 week low of $684.91 which to us is a clear indication that the short term sentiment and momentum of the stock is very positive.
The stock of Autozone is trading at a lot closer to its 52 week high of $1274.41 than it is to its 52 week low of $684.91 which to us is a clear indication that the short term sentiment and momentum of the stock is very positive.
Autozone (AZO) stock vs O'Reilly (ORLY) stock over the last 5 years
The image below shows the stock price history of Autozone (AZO) and O'Reilly Automotive (ORLY) over the last 5 years. Both of these automotive parts suppliers stock has had a pretty decent run over the last couple of years. The summary below shows the stock price returns of Autozone and O'Reilly over the last 5 years:
- O'Reilly's Automotive (ORLY): 80.6%
- Autozone (AZO): 56.8%
Recent coverage of AutoZone (AZO)
The extract below covers the latest regarding Autozone from SeekingAlpha
AutoZone (AZO -0.1%) is in focus after the retailer turned in an impressive earnings beat this morning, although expectations were already pretty high following the +60% 6-month rally.
CFRA Research (Strong Buy rating): "We raise our 12-month target price by $50 to $1,400 based on 17.0x our FY 22 (Aug.) EPS estimate, a premium to AZO's 5-year mean forward P/E of 16.2x on commercial growth potential. We increase our EPS estimates by $2.40 to $73.55 for FY 21 and by $2.75 to $82.25 for FY 22. AZO posts Aug-Q EPS of $30.93 vs. $22.59 (+36.9%), well ahead of the $24.51 consensus. The beat was driven by a stronger-than-expected top-line, as revenue increased 14% to $4.55 billion on a 21.8% surge in same store sales, well above the consensus forecasts of $4.15 billion and a 10.2% SSS increase. Gross margin contracted 30 bps to 53.1% (50 bps shy of consensus). As the auto aftermarket retailer most levered to the Do-It-Yourself auto repair market (78% of total revenue last year), AZO has uniquely benefited from stay-at-home trends. AZO did not repurchase any stock during the quarter. We reiterate our Strong Buy, viewing the record-high U.S. vehicle age (11.9 years) and used car market strength as powerful secular demand drivers."
Read the original article here
AutoZone (AZO -0.1%) is in focus after the retailer turned in an impressive earnings beat this morning, although expectations were already pretty high following the +60% 6-month rally.
CFRA Research (Strong Buy rating): "We raise our 12-month target price by $50 to $1,400 based on 17.0x our FY 22 (Aug.) EPS estimate, a premium to AZO's 5-year mean forward P/E of 16.2x on commercial growth potential. We increase our EPS estimates by $2.40 to $73.55 for FY 21 and by $2.75 to $82.25 for FY 22. AZO posts Aug-Q EPS of $30.93 vs. $22.59 (+36.9%), well ahead of the $24.51 consensus. The beat was driven by a stronger-than-expected top-line, as revenue increased 14% to $4.55 billion on a 21.8% surge in same store sales, well above the consensus forecasts of $4.15 billion and a 10.2% SSS increase. Gross margin contracted 30 bps to 53.1% (50 bps shy of consensus). As the auto aftermarket retailer most levered to the Do-It-Yourself auto repair market (78% of total revenue last year), AZO has uniquely benefited from stay-at-home trends. AZO did not repurchase any stock during the quarter. We reiterate our Strong Buy, viewing the record-high U.S. vehicle age (11.9 years) and used car market strength as powerful secular demand drivers."
Read the original article here
AutoZone (NYSE: AZO) latest stock valuation
So based on the earnings report of AutoZone (NYSE: AZO) and the latest earnings guidance provided what do we value AutoZone (AZO) stock at? Based on their latest earnings report our target (full value) price for AutoZone at $1140 a stock. We therefore believe the stock of AutoZone is fully valued at its current price
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $1140 Therefore we believe the a good entry point into the stock is below $1026. We believe the stock of AutoZone will trade in a narrow range around our target price in coming weeks and months.
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $1140 Therefore we believe the a good entry point into the stock is below $1026. We believe the stock of AutoZone will trade in a narrow range around our target price in coming weeks and months.
Next earnings release of Autozone
It is expected that Autozone will release their 1st quarter 2021 earnings report in late December 2020