Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- AZO's revenue growth has slightly outpaced the industry average of 6.6%. Since the same quarter one year prior, revenues slightly increased by 8.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 34.93% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AZO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- AUTOZONE INC has improved earnings per share by 24.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AUTOZONE INC increased its bottom line by earning $19.58 versus $15.06 in the prior year. This year, the market expects an improvement in earnings ($23.46 versus $19.58).
- The gross profit margin for AUTOZONE INC is rather high; currently it is at 54.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.30% is above that of the industry average.
- Net operating cash flow has increased to $118.92 million or 41.98% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 20.11%.
AutoZone, Inc. engages in retailing and distributing automotive replacement parts and accessories. AutoZone has a market cap of $12.65 billion and is part of the services sector and retail industry. The company has a P/E ratio of 14.4, below the S&P 500 P/E ratio of 17.7. Shares are down 1.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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