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Valued at a market cap of $59.8 billion, AutoZone, Inc. (AZO) retails and distributes automotive replacement parts and accessories. The Memphis, Tennessee-based company’s stores carry an extensive product line for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and AZO fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the specialty retail industry. As one of the largest retailers and distributors of automotive replacement parts and accessories in the U.S., the company benefits from a vast store network, a robust supply chain, and efficient inventory management, ensuring product availability and quick service. AutoZone’s competitive advantage is further strengthened by its focus on both DIY (do-it-yourself) and DIFM (do-it-for-me) customers, catering to individual car owners as well as professional mechanics.
This automotive parts retailer touched its 52-week high of $3,704.43 recently on Mar. 10 and is currently trading 3.8% below it. Shares of AZO have gained 6.6% over the past three months, considerably outpacing the broader Consumer Discretionary Select Sector SPDR Fund’s (XLY) 17% loss during the same time frame.
In the longer term, AZO has rallied 16.4% over the past 52 weeks, outpacing XLY’s 9.2% return. Moreover, on a YTD basis, shares of AZO are up 11.3%, compared to XLY’s 12.5% decline over the same time frame.
To confirm its bullish trend, AutoZone has been trading above its 200-day moving average since the past year and has remained above its 50-day moving average since late November 2024, with slight fluctuations.
On Mar. 4, shares of AZO saw a slight decline following its Q2 earnings release, as the company reported lower-than-expected earnings of $28.29 per share and revenue of approximately $4 billion. Additionally, its bottom line dropped 2.1% year-over-year. A decline in operating profit and a fall in international same-store sales due to currency headwinds mainly led to its below-par performance. However, on a positive note, revenue grew 2.4% from the previous year, driven by higher domestic DIY and commercial sales. Moreover, on a constant currency basis, international same-store sales increased by 9.5%.
AZO’s outperformance becomes even more evident when compared to its rival, Advance Auto Parts, Inc. (AAP), which declined 51.8% over the past 52 weeks and 22.8% on a YTD basis.
Given AZO’s recent outperformance relative to its broader sector, analysts remain strongly optimistic about its prospects. The stock has a consensus rating of “Strong Buy” from the 26 analysts covering it, and the mean price target of $3,774.78 suggests a nearly 6% premium to its current levels.
