AZO
AutoZone, Inc.$3637.17
Unclear
Target $3438.53
Report: Feb 19, 2026Consumer Cyclical • Auto - Parts • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$3637.17-5.5%
Rec: UnclearConviction: High
Entry Target
$2645.02
(27% below current)
Fair Value
$3438.53
(5% below current)
Stop Loss
$2256.42
(38% below current)
Position Size
Half
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$4,388.11
52 Week Low$3,210.72
Avg. 3 Month Volume156K
Efficiency
LTM Gross Margin51.9%
LTM EBITDA Margin21.4%
LTM EBIT Margin18.1%
LTM Operating Margin18.1%
LTM ROA12.5%
LTM ROE-72.3%
LTM ROIC16.5%
LTM ROCE36.8%
Capital Structure
Market Cap (MM)$55.7B
Enterprise Value (MM)$67.8B
Shares Outstanding16.57M
Total Debt (MM)$12.41B
Cash & Equivalents (MM)$285.49M
LTM Net Debt (MM)$12.13B
LTM Net Debt/EBITDA2.9x
Growth
TTM Rev. Growth5.0%
Last 3-Yr Rev. CAGR5.1%
Last 3-Yr EBITDA CAGR3.8%
Last 3-Yr EPS CAGR5.3%
Valuation
Street Target Price$4,228.85
LTM EV/Revenue3.5x
LTM EV/Gross Profit6.7x
LTM EV/EBIT19.1x
LTM EV/EBITDA16.2x
LTM P/E22.8x
LTM EV/FCF42.4x
LTM P/FCF34.8x
LTM P/TB2.8x
LTM P/B-19.1x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $3637.17 versus fair value $3438.53 (-5.5% expected return), and valuation confidence is stable. Debate: Bull case depends on FY26 350-360 net new stores (up 15% YoY) and Mega Hubs to 300 validate moat via commercial comps +9.8%; addresses market LIFO fears by proving network scale offsets mix drag. Bear case centers on Moat erosion via EV adoption shrinking ICE parts TAM; mechanics: fleet electrification reduces hard parts demand, hitting 52.1% gross margins. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Aging U.S. fleet at 12.8 years drives $413B TAM (5.1% growth); 52.1% gross margin premium persists; $15.1B buybacks yield 31.8% net over 4.8 years boosting EPS 82%; Mega Hubs exceed models with commercial +9.8% comps.
Bear Case
LIFO $60M/quarter compresses margins (op margin -140bps to 19.1% FY25); EV shift erodes ICE parts; CapEx 7.3% revenue outpaces 3.8% TTM growth; incremental ROIC -13.5% signals new stores lag.
Key Catalysts
Mid-Term (6-18 months)Impact: High
FY26 350-360 net new stores (up 15% YoY) and Mega Hubs to 300 validate moat via commercial comps +9.8%; addresses market LIFO fears by provi...
Near-Term (0-6 months)Impact: Moderate
Merch margin actions fully offset $60M/Q LIFO, restoring op margin to 20%+; counters bear margin fade narrative with proven 52.1% gross stab...
Long-Term (18+ months)Impact: Moderate
Recent director buys totaling $1.2M (Dec 2025) and Q2 FY26 3.4% comps amid weather signal entry amid LIFO fog.
Primary Risks
Concern: Medium
Moat erosion via EV adoption shrinking ICE parts TAM; mechanics: fleet electrification reduces hard parts demand, hitting 52.1% gross margin...
Concern: High
Tariff/LIFO persistence compressing margins; $60M/Q LIFO already -140bps op margin FY25, eroding ROIC to 16.9%.
Concern: Medium
Strong stewardship: 82% independent board with retail experts (Lead Director Hannasch, Circle K CEO 12 years); equity-heavy comp (97% stock...
Recent Activity
2025-12-09SEC Filing (8-K)
-7.17%Excerpt: Source: Attachment (EX-99.1) Edgar Filing EXHIBIT 99.1 Auto Zone 1st Quarter Total Company Same Store Sales Increase 4.7%; Domestic Same Store Sales Increase 4.8%; 1st Quarter EPS of $31.04 MEMPHIS, Tenn., Dec. 09, 2025 (GLOBE...
2024-02-27SEC Filing (8-K)
+6.66%Excerpt: Source: Attachment (EX-99.1) Edgar Filing EXHIBIT 99.1 Auto Zone 2nd Quarter Total Company Same Store Sales Increase 1.5%; Domestic Same Store Sales Increase 0.3%; EPS Increases to $28.89 MEMPHIS, Tenn., Feb. 27, 2024 (GLOBE...
2023-05-23SEC Filing (8-K)
-5.97%Excerpt: Source: Attachment (EX-99.1) Edgar Filing EXHIBIT 99.1 Auto Zone 3rd Quarter Same Store Sales Increase 1.9%; EPS Increases to $34.12 MEMPHIS, Tenn., May 23, 2023 (GLOBE NEWSWIRE) -- Auto Zone, Inc. (NYSE: AZO) today reported net...
2022-05-24SEC Filing (8-K)
+5.82%Excerpt: Source: Attachment (EX-99.1) Edgar Filing EXHIBIT 99.1 Auto Zone 3rd Quarter Same Store Sales Increase 2.6%; EPS Increases to $29.03 MEMPHIS, Tenn., May 24, 2022 (GLOBE NEWSWIRE) -- Auto Zone, Inc. (NYSE: AZO) today reported net...
2021-12-07SEC Filing (8-K)
+7.64%Excerpt: Source: Attachment (EX-99.1) Edgar Filing EXHIBIT 99.1 Auto Zone 1st Quarter Same Store Sales Increase 13.6%; EPS Increases to $25.69 MEMPHIS, Tenn., Dec. 07, 2021 (GLOBE NEWSWIRE) -- Auto Zone, Inc. (NYSE: AZO) today reported net...
Valuation Table
9.8/10Decision Grade
Scenario Range
$2256
Bear
$3697
Base
$4724
Bull
$3637