📊 AZO Key Takeaways
Is Autozone Inc. (AZO) a Good Investment?
AutoZone exhibits strong operational profitability with healthy margins (51.7% gross, 16.7% operating) and substantial cash generation ($1.3B operating cash flow), but faces critical balance sheet deterioration with negative stockholders' equity of -$2.9B and liquidity ratios below 1.0. Combined with stagnant growth (2.4% revenue, 0% net income growth, -3.1% EPS decline), the company's structural financial weaknesses create material risk despite operational strength.
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.
Autozone Inc. Key Strengths (AZO)
- Strong and stable profit margins (51.7% gross, 16.7% operating, 11.2% net) demonstrate pricing power and cost control
- Substantial operating cash flow of $1.3B and positive free cash flow of $665.6M provide debt service capacity
- Adequate interest coverage ratio of 4.6x indicates near-term debt service sustainability
- 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
- Negative stockholders' equity of -$2.9B signals severe balance sheet deterioration and financial engineering risk
- Current ratio (0.89x) and quick ratio (0.63x) below 1.0 indicate potential short-term liquidity stress and refinancing dependency
- Stagnant growth trajectory with flat net income despite 2.4% revenue growth and declining EPS (-3.1%) suggests mature, declining business
- 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
- Path to positive stockholders' equity and deleveraging progress
- Operating and free cash flow sustainability amid weak revenue growth
- Working capital management and actual short-term liquidity position (current liabilities breakdown)
- Debt maturity schedule and refinancing capacity in potential tightening environment
- 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 Grade of B from Claude (C) and ChatGPT (A) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AZO's key strengths?
Claude: Strong and stable profit margins (51.7% gross, 16.7% operating, 11.2% net) demonstrate pricing power and cost control. Substantial operating cash flow of $1.3B and positive free cash flow of $665.6M provide debt service capacity. 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: Negative stockholders' equity of -$2.9B signals severe balance sheet deterioration and financial engineering risk. Current ratio (0.89x) and quick ratio (0.63x) below 1.0 indicate potential short-term liquidity stress and refinancing dependency. 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 $8.9B.
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 $58.68.
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 grade reflects both perspectives for balanced insights.
What is AZO's fundamental grade?
Based on our AI fundamental analysis in June 2026, Autozone Inc. has a B grade with 78% confidence. Review the strengths and risks sections above for full context. 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 11.2% (sector avg: 6%). Compare these metrics with sector averages to assess valuation.
What is AZO's AI grade for 2026?
Our dual AI analysis gives Autozone Inc. a combined B grade 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 $1.3B, with capital expenditures of $652.0M. FCF margin is 7.5%.
How does AZO compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 11.2% (avg: 6%), ROE N/A (avg: 12%), current ratio 0.89 (avg: 1.2).