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AutoZone's EPS Misses Expectations Despite Revenue Beat

AutoZone's recent report indicates mixed results, with adjusted earnings per share falling short of estimates while revenue exceeded forecasts. Analysts maintain a strong buy rating on the stock, showcasing confidence despite the company's underperformance against the broader market.

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AI Rating:   5

According to the report, AutoZone, Inc. has experienced an underperformance compared to the broader market, with its stock gaining only 22.1% over the past year, compared to the S&P 500's 32.6% increase. This underwhelming performance could raise investor concerns about the company's growth prospects.

In terms of key financial metrics, AutoZone reported adjusted earnings of $48.11 per share for Q4, which is below the Wall Street expectation of $53.31 per share. This denotes a significant miss of approximately 9.5%, which could negatively influence investor sentiment regarding the stock. However, the report highlights that the company's revenue of $6.2 billion surpassed the expected $6.18 billion, indicating strong sales performance and potentially offsetting negative sentiment from the EPS miss.

For the fiscal year ending in August 2025, analysts forecast an EPS of $158.09, which indicates a growth of 8.2% annually. This positive outlook may provide some reassurance to investors about AutoZone's long-term potential, particularly in the face of recent mixed quarterly results.

The analysis of AutoZone’s earnings surprise history shows a mixed performance, having beaten consensus estimates in three of the last four quarters while missing once. Consistent earnings growth and the prospect of exceeding EPS estimates in the future could aid in restoring investor confidence.

The consensus rating among 25 analysts remains a "Strong Buy," reflecting optimism towards the stock, despite its recent performance metrics. This rating and the fact that it has increased from 18 analysts suggesting a “Strong Buy” two months ago suggest growing confidence in AutoZone’s market position.

Furthermore, the report notes that Roth MKM analyst Scott Stember resumed coverage with a “Buy” rating and a price target of $3,634, citing AutoZone's resilient market position and opportunities for growth in professional auto repair services as key advantages going forward. The mean price target of $3,294.83 suggests a 4% premium from current price levels, which could indicate potential for upward price movement.

Stocks:  AZO