📊 AZO Key Takeaways
Is Autozone Inc. (AZO) a Good Investment?
AutoZone demonstrates strong operational profitability with solid 16.9% operating margins and robust free cash flow generation of $630M, but is significantly constrained by negative stockholders' equity of -$3.2B and high financial leverage with $8.6B long-term debt. The deteriorating interest coverage ratio of 2.4x and liquidity metrics below 1.0x raise concerns about financial flexibility despite consistent operational cash generation.
AutoZone shows strong core fundamentals with high gross, operating, and net margins for a retailer, alongside solid free cash flow generation. Revenue is still growing, but earnings per share declined and net income was flat, which points to slower profit momentum. The main constraint is financial health: negative equity, low liquidity, and only moderate interest coverage make leverage the key risk despite otherwise resilient operations.
Why Buy Autozone Inc. Stock? AZO Key Strengths
- Strong operating cash flow of $944.2M with healthy FCF conversion (13.6% FCF margin)
- Solid gross margin of 51% and operating margin of 16.9% indicating pricing power and operational efficiency
- Consistent revenue generation with 2.4% YoY growth in competitive auto parts retail sector
- Positive free cash flow enabling debt service despite capital structure constraints
- Strong profitability with 51.0% gross margin, 16.9% operating margin, and 11.5% net margin
- Healthy cash generation with $944.17M operating cash flow and $630.00M free cash flow
- Revenue remains positive year over year, indicating durable demand and operating resilience
AZO Stock Risks: Autozone Inc. Investment Risks
- Severely negative stockholders' equity of -$3.2B indicating aggressive financial engineering and equity destruction
- High financial leverage with $8.6B debt against only $287.6M cash creates refinancing and solvency risk
- Weak liquidity ratios (current 0.86x, quick 0.59x) below safe levels with tight interest coverage of 2.4x
- Flat net income growth (0.0% YoY) and diluted EPS decline (-3.1% YoY) suggest earnings pressure despite revenue growth
- Capital-intensive business model requiring ongoing investment ($314.2M capex annually)
- Negative stockholders equity signals an aggressive capital structure and reduces balance sheet flexibility
- Liquidity is tight with a 0.86x current ratio and 0.59x quick ratio
- Interest coverage of 2.4x and $8.62B of long-term debt create refinancing and earnings pressure risk
Key Metrics to Watch
- Operating cash flow trend and working capital management given liquidity constraints
- Interest coverage ratio and debt refinancing needs to ensure solvency
- Net margin trajectory and operating leverage given flat earnings despite revenue growth
- Free cash flow sustainability and dividend/debt reduction capacity
- Interest coverage and total debt trend
- Free cash flow and operating margin trend
Autozone Inc. (AZO) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
AZO Profit Margin, ROE & Profitability Analysis
AZO vs Automotive Sector: How Autozone Inc. Compares
How Autozone Inc. compares to Automotive sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Autozone Inc. Stock Overvalued? AZO Valuation Analysis 2026
Based on fundamental analysis, Autozone Inc. has mixed fundamental signals relative to the Automotive sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Autozone Inc. Balance Sheet: AZO Debt, Cash & Liquidity
AZO Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Autozone Inc.'s revenue has grown significantly by 29% over the 5-year period, indicating strong business expansion. The most recent EPS of $132.36 reflects profitable operations.
AZO Revenue Growth, EPS Growth & YoY Performance
AZO Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $4.0B | $468.9M | $27.63 |
| Q1 2026 | $4.3B | $530.8M | $31.04 |
| Q3 2025 | $4.2B | $608.4M | $35.36 |
| Q2 2025 | $3.9B | $487.9M | $28.29 |
| Q1 2025 | $4.2B | $564.9M | $32.52 |
| Q3 2024 | $4.1B | $647.7M | $34.12 |
| Q2 2024 | $3.7B | $476.5M | $24.64 |
| Q1 2024 | $4.0B | $539.3M | $27.45 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Autozone Inc. Dividends, Buybacks & Capital Allocation
AZO SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Autozone Inc. (CIK: 0000866787)
📋 Recent SEC Filings
❓ Frequently Asked Questions about AZO
What is the AI rating for AZO?
Autozone Inc. (AZO) has a Combined AI Rating of BUY from Claude (HOLD) and ChatGPT (BUY) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AZO's key strengths?
Claude: Strong operating cash flow of $944.2M with healthy FCF conversion (13.6% FCF margin). Solid gross margin of 51% and operating margin of 16.9% indicating pricing power and operational efficiency. ChatGPT: Strong profitability with 51.0% gross margin, 16.9% operating margin, and 11.5% net margin. Healthy cash generation with $944.17M operating cash flow and $630.00M free cash flow.
What are the risks of investing in AZO?
Claude: Severely negative stockholders' equity of -$3.2B indicating aggressive financial engineering and equity destruction. High financial leverage with $8.6B debt against only $287.6M cash creates refinancing and solvency risk. ChatGPT: Negative stockholders equity signals an aggressive capital structure and reduces balance sheet flexibility. Liquidity is tight with a 0.86x current ratio and 0.59x quick ratio.
What is AZO's revenue and growth?
Autozone Inc. reported revenue of $4.6B.
Does AZO pay dividends?
Autozone Inc. does not currently pay dividends.
Where can I find AZO SEC filings?
Official SEC filings for Autozone Inc. (CIK: 0000866787) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AZO's EPS?
Autozone Inc. has a diluted EPS of $31.04.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is AZO a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Autozone Inc. has a BUY rating with 70% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is AZO stock overvalued or undervalued?
Valuation metrics for AZO: ROE of N/A (sector avg: 12%), net margin of 11.5% (sector avg: 6%). Compare these metrics with sector averages to assess valuation.
Should I buy AZO stock in 2026?
Our dual AI analysis gives Autozone Inc. a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is AZO's free cash flow?
Autozone Inc.'s operating cash flow is $944.2M, with capital expenditures of $314.2M. FCF margin is 13.6%.
How does AZO compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 11.5% (avg: 6%), ROE N/A (avg: 12%), current ratio 0.86 (avg: 1.2).