📊 AZO Key Takeaways
Is Autozone Inc. (AZO) a Good Investment?
AutoZone demonstrates strong operational efficiency with solid profitability margins (51.9% gross, 17.5% operating) and robust cash generation, but is severely over-leveraged with negative stockholders' equity (-2.8B) and weak liquidity ratios that create structural financial fragility. Stagnant growth (flat net income, declining EPS) combined with high debt burden and constrained financial flexibility present material risks that outweigh 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 profitability margins (51.9% gross, 17.5% operating, 11.9% net) demonstrating operational excellence and pricing power
- Robust cash flow generation with 2.1B operating cash flow and 1.1B free cash flow supporting debt service
- Adequate interest coverage ratio of 7.5x providing reasonable debt servicing capacity
- 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 -2.8B indicates liabilities exceed total assets, creating insolvency risk and eliminating financial flexibility
- Critically weak liquidity ratios (Current 0.89x, Quick 0.63x) below 1.0 threshold limit ability to meet short-term obligations
- Stagnant revenue growth (+2.4% YoY), flat net income (+0.0% YoY), and declining diluted EPS (-3.1% YoY) signal mature market saturation
- High debt burden of 9.0B long-term debt with minimal cash buffer (253.7M) leaves minimal margin for operational deterioration
- Leverage-dependent business model relying on continuous strong cash flows; vulnerable to economic downturn or liquidity squeeze
- 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
- Operating cash flow trends and sustainability under varying economic conditions
- Debt maturity schedule and refinancing requirements to assess solvency sustainability
- Revenue and comparable store sales growth rates as leading indicators of cash flow sustainability
- Working capital management and changes to liquidity ratios signaling financial strain
- Progress toward positive stockholders' equity through debt reduction or retained earnings
- 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 |
|---|---|---|---|
| Q3 2026 | $4.5B | $608.4M | $35.36 |
| 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 |
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 76% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AZO's key strengths?
Claude: Strong profitability margins (51.9% gross, 17.5% operating, 11.9% net) demonstrating operational excellence and pricing power. Robust cash flow generation with 2.1B operating cash flow and 1.1B free cash flow supporting debt service. 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 -2.8B indicates liabilities exceed total assets, creating insolvency risk and eliminating financial flexibility. Critically weak liquidity ratios (Current 0.89x, Quick 0.63x) below 1.0 threshold limit ability to meet short-term obligations. 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 $13.7B.
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 $96.69.
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 76% 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 11.9% (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 $2.1B, with capital expenditures of $997.5M. FCF margin is 8.2%.
How does AZO compare to other Automotive stocks?
Vs Automotive sector averages: Net margin 11.9% (avg: 6%), ROE N/A (avg: 12%), current ratio 0.89 (avg: 1.2).