Story updated at 10 a.m. to reflect market activity.
Autozonr was gaining 0.9% to $524.83 in morning trading.
According to Gabelli analysts, Autozone deserves a premium valuation despite its recent inventory concerns.
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Separately, TheStreet Ratings team rates AUTOZONE INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AUTOZONE INC (AZO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, solid stock price performance, impressive record of earnings per share growth and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 7.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The gross profit margin for AUTOZONE INC is rather high; currently it is at 55.03%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.68% is above that of the industry average.
- 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 29.67% 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 17.8% 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 $27.88 versus $23.57 in the prior year. This year, the market expects an improvement in earnings ($31.52 versus $27.88).
- The net income growth from the same quarter one year ago has exceeded that of the Specialty Retail industry average, but is less than that of the S&P 500. The net income increased by 9.4% when compared to the same quarter one year prior, going from $176.25 million to $192.83 million.
- You can view the full analysis from the report here: AZO Ratings Report