* Note: Prices are in Million (M) USD.
Description:
AutoZone, Inc. is an American retailer of aftermarket automotive parts and accessories, the largest in the United States.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $269 M
Debt : $12,189 M
EBITDA : $5,169 M
Net Debt (Debt - Cash): $11,920 M
Since Net Debt is covered by EBITDA within 3 years, 1 points assigned.
This criteria used industry in which company operates:
Sector: Consumer cyclical
Industry: Specialty retail
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 26.31
Since Forward PE Ratio is between 25 - 35, 1 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $1,289 M
Average Revenue: $10,404 M
Revenue Converted To Free Cash Flow (%): 12.4%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-08-31): $18,490 M
Revenue 4 Years Ago (2020-08-31): $12,632 M
Last 5 Years Average Revenue Growth: 9%
Since Revenue Growth is between 5 - 10, 2 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-08-31): $18 M
Share Count 5 Years Ago (2020-08-31): $24 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $170.70
Trailing 12-Month Earnings Per Share (EPS): $148.48
Average Earnings Per Share (EPS): $159.59
Dividend Per Share (DPS): $0
Payout Ratio: 0%
Dividend Yield: 0%
Since Dividend Per Share is less than or equal to 0, 0 point assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 4 valid ROE years (max 20).Average ROE: 173.6%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $4,199
52-Week Low: $2,899
Threshold Price (15% Above 52-Week Low): $3,333
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $67,030 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Value-Trade has assigned 18 points to above AutoZone Inc (AZO) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• ROE Based PE
50.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 20 Years Avg P/E (19.06)
× EPS ($159.59) = $3,041.79.
Last 20 Years Avg PE 19.06, Fair Value PE 12, Industry Based PE 15, Growth Based PE 9, RCFC Based PE 21.91, ROE Based PE 50, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 20.58. Value-Trades has assined P/E value 20.58. Since an average (Current Year EPS + Next Year EPS) earning per share is $159.59.
The fair value of AutoZone Inc (AZO) stock should be (20.58 x $159.59) = $3284.23.
