Yahoo Finance If You Invested $1000 in AutoZone 10 Years Ago, This Is How Much You'd Have Now
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in AutoZone (AZO) ten years ago? It may not have been easy to hold on to AZO for all that time, but if you did, how much would your investment be worth today?
AutoZone's Business In-Depth
With that in mind, let's take a look at AutoZone's main business drivers.
AutoZone, Inc. is one of the leading specialty retailers and distributor of automotive replacement parts and accessories in the United States. It operates in the Do-It-Yourself (DIY) retail, Do-It-for-Me (DIFM) auto parts and products markets. At the end of fiscal 2022, the company had 6,168 stores in the United States, 703 in Mexico and 72 in Brazil. The total store count was 6,943 as of Aug 27, 2022. Each store offers wide-ranging products for cars, sport utility vehicles, vans and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products.
Apart from providing automotive products, it also has many commercial sales programs, which provides commercial credit, and delivers parts and other products to local repair garages, dealers and service stations. AutoZone sells the ALLDATA brand’s automotive diagnostic and repair software through www.alldata.com and www.alldatadiy.com. This offers comprehensive factory-correct repair information to DIY customers along with ALLDATA repair subscription.
The company has online presence to sell automotive hard parts, maintenance items, accessories and non-automotive products through its website www.autozone.com. For commercial customers, it has www.autozonepro.com to make purchases. AutoZone selects and purchases merchandise from store support centers situated at Memphis, TN; Monterrey, MX; and Sao Paulo, BR. Also, it has office in Shanghai, China, to support sourcing efforts in Asia. This centralization improves the execution of merchandising and marketing strategies at the store level, as well as reduces expenses and cost of sales.
The company reported a 11.1% year over year increase in net revenues to $16.3 billion in fiscal 2022, with domestic same store sales rising 8.4%. AutoZone generated net income of $2.4 billion, up 11.9% on a year-over-year basis.
AutoZone ended fiscal 2022 with cash and cash equivalents of $264.4 million, down from $1,171.3 million as of fiscal 2021-end. The total debt amounted to $6,122.1 million as of Aug 27, 2022, marking an increase from $5,269.8 million on Aug 28, 2021.
Bottom Line
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For AutoZone, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in May 2013 would be worth $6,531, or a 553.10% gain, as of May 2, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 163.34% and gold's return of 28.86% over the same time frame.
Going forward, analysts are expecting more upside for AZO.
AutoZone has been generating record revenues since 24 consecutive years and the trend is expected to continue on the back of a resilient DIY business and a fast-growing commercial business. We expect the firm’s total revenues in fiscal 2023 to grow 6.2% year over year. AutoZone's high-quality products, store-expansion initiatives and omni-channel efforts are boosting the company’s market share. Robust buyback program of the firm also boosts investors' confidence. However, AutoZone's store expansion plans are likely to strain its near-term operating margins. Technology investments to improve electronic catalogue might limit cash inflows. Further, the stretched balance sheet of the auto parts retailer plays a spoilsport. Thus, investors are recommended to wait for a better entry point.
The stock is up 6.69% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 3 higher, for fiscal 2023. The consensus estimate has moved up as well.
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AutoZone, Inc. (AZO) : Free Stock Analysis Report
