AutoZone’s valuation dips below its five-year average despite beating earnings and posting 10% commercial sales growth.
AutoZone’s forward price-to-earnings ratio dropped to 18, below its five-year average, after reporting Q3 earnings per share of $38.07, surpassing the $36.17 consensus. Commercial sales grew 10%, though shares fell 16% while the S&P 500 gained 24% over the same period.
The company’s valuation discount contrasts with strong industry tailwinds, including O’Reilly Automotive’s 8.1% comparable sales growth. Despite steep online discounts, only 1-2% of AutoZone’s sales are digital, as customers prefer in-store visits, paying $20 more on average than online orders.
Analysts highlight AutoZone’s resilience against e-commerce competition, noting Amazon’s failed push into auto parts in 2017 did little to disrupt incumbents.