AutoZone is a retailer and distributor of automotive replacement parts and accessories in the United States. The company offers various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. The company was founded in 1979 and is based in Memphis, Tennessee.
AZO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Autozone Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Autozone Inc ranked in the 38th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 30.67%. The most interesting components of our discounted cash flow analysis for Autozone Inc ended up being:
Autozone Inc's weighted average cost of capital (WACC) is 7%; for context, that number is higher than just 20.97% of tickers in our DCF set.
AZO's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than just 20.97% of tickers in our DCF set.
Relative to other stocks in its sector (Consumer Cyclical), Autozone Inc has a reliance on debt greater than merely 23.54% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Autozone Inc? See HHS, ROST, DNKN, DPZ, and RH.