AZO - Embedded Expectations Analysis - 2018 11 05
AutoZone, Inc. (AZO:USA) trades near recent averages relative to UAFRS-based (Uniform) Earnings, with an 18.4x Uniform P/E. At these levels, markets have bearish expectations for the firm, and management is concerned about current gas prices, their e-commerce positioning, and market share growth ratesSpecifically, management appears concerned about current gas prices, and about their e-commerce positioning. Additionally, they may lack confidence in their ability to maintain EPS growth rates, and may be exaggerating their intentions to advertise more aggressively. Moreover, they may be concerned about their slowing market share growth, and may lack confidence in their ability to drive sales through their existing programs. Finally, they may lack confidence in their plan to invest in wages for targeted positions across their hourly store teams, and may be exaggerating the impact that weather had on sluggish sales in their Western markets
AutoZone is a retailer and a distributor of automotive replacement parts and accessories. The company operates stores in the United States, including Puerto Rico and Saint Thomas, Mexico, and Brazil. Each store carries a 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. In addition, the company has a commercial sales program that provides commercial credit and delivery of parts and other products to local, regional and national repair garages, dealers, service stations and public sector accounts. The company also sells the ALLDATA brand automotive diagnostic and repair software.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.