AZO
AUTOZONE INC
Consumer Discretionary • CIK: 0000866787
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Market Cap
$64.35B
P/E (TTM)
26.3x
Rev Growth (TTM)
+5.0%
Net Margin (TTM)
12.5%
FCF Yield (TTM)
2.5%
FCF Margin (TTM)
8.2%
What Changed
10-Q Q2 2026 vs 10-Q Q1 2026
Interest Rate Risk Added to Top-3top risks: Geopolitical and Trade Policy Uncertainty...→top risks: Geopolitical and Supply Chain Disruptions...
Accounting Red Flag Resolved1 flag: SBC expense increased by 17.6% while revenue...→0 accounting red flags
Forward Guidance Specificityno revenue or margin outlook (revenue_outlook: null,...→24-week net sales +8.2% YoY to $8.9B; 24-week gross...
Critical Liability Finding Resolvedvarious legal proceedings cited: wage and hour...→no critical findings
Total Debt Increased$8.67B total debt, nearest maturity 2026→$8.91B total debt, nearest maturity 2026 (+$240M,...
Gross margin trajectory: Q2 2026 LIFO charge compressed gross margin 138bp vs...·Debt maturity profile: $8.91B outstanding with nearest maturity in 2026 —...·ROIC trend: management's top concern shifted to ROIC compression — watch next...
Filing Intelligence
7.0/10
10-Q filed Mar 20, 2026 • Q2 2026
Executive Summary
Net sales increased 8.1% to $4.3 billion. See detailed pass outputs for comprehensive analysis.
Key Concerns
- ●Adjusted ROIC has declined year-over-year, though it remains at a high level, suggesting continued value creation but with slightly...
- ●Geopolitical and Supply Chain Disruptions (medium)
- ●Cyber and IT System Risks (medium)
Key Strengths
- ●Despite a non-cash LIFO charge impacting operating profit, the company demonstrated solid revenue growth of 8.1% driven by same-store sales...
- ●Investments in growth initiatives, including new stores and hub expansions, are driving increased capital expenditures and are expected to...
- ●The company maintains a confident outlook on its liquidity position, supported by strong operating cash flows and available credit...
Cash Flow Health
Free Cash Flow8/8 positive
TTM$1.6B
Q2 '26
$36M-94%
Q1 '26
$630M+23%
FCF Margin
TTM8.2%
Q2 '260.8%-94%
Sector: 2.7%Top 25%
OCF Margin15.5%
OCF/NI1.24x
CapEx Coverage2.1x
FCF Yield2.5%
FCF Growth (2Y)-14%
Cash Conversion Cycle
-300 days
DSO: 12+DIO: 0−DPO: 312
Capital Allocation & Returns
Balanced
Total Shareholder YieldTTM
TTM2.3%
Div Yield0.0%
+Buyback (TTM)2.3%
Balancing returns with reinvestment
Dividend & Payout Metrics
Dividend Yield (TTM)0.0%
Free Cash Flow (TTM)$1.6B
Stock Repurchases (TTM)$1.5B
Capital Return / FCF90.8%
Est. Dividends Paid (TTM)$0
Shows how management rewards shareholders
Operational Efficiency & Returns
Return on Invested CapitalTTM
30.7%
Moderate
-0.1% YoY-17.3%
P25MedianP75
75th pctl (med: 0.1%)
DuPont BreakdownROIC = Margin × Turn × (1+D/E)
NOPAT Margin
14.4%
8Q: 15.2%
Asset Turnover
1.02x
8Q: 0.98x
Leverage (1+D/E)
-2.06x
D/E: -3.06x
DuPont: -30.3% ≈ 30.7% ROIC
Asset & CapEx Efficiency
Fixed Asset Turn
2.80x
8Q:2.73x
-67.9%
Invested Cap Turn
2.14x
8Q:2.09x
-59.8%
CapEx Intensity
15.7%
8Q:14.0%
CapEx/Depreciation
2.29x
Asset-based ROIC formula
QUARTERLY TRENDS
Last 8 quarters + TTM
| Metric | TTM | Q2 2026 | Q1 2026 | Q4 2026 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2025 | Q3 2024 |
|---|---|---|---|---|---|---|---|---|---|
Revenue | $19.6B | $4.3B↓7.7% | $4.6B↓25.9% | $6.2B↑39.8% | $4.5B↑13.0% | $4.0B↓7.7% | $4.3B↓31.0% | $6.2B↑46.5% | $4.2B |
Operating Income | $3.5B | $698.5M↓10.9% | $784.2M↓34.4% | $1.2B↑38.1% | $866.2M↑22.6% | $706.8M↓16.0% | $841.1M↓35.1% | $1.3B↑44.0% | $900.2M |
Net Income | $2.4B | $468.9M↓11.7% | $530.8M↓36.6% | $837.0M↑37.6% | $608.4M↑24.7% | $487.9M↓13.6% | $564.9M↓37.4% | $902.2M↑38.4% | $651.7M |
Operating Cash Flow | $3.0B | $373.4M↓60.4% | $944.2M↓0.9% | $952.8M↑23.9% | $769.0M↑31.7% | $583.7M↓28.1% | $811.8M↓24.1% | $1.1B↑59.9% | $669.5M |
Free Cash Flow | $1.6B | $35.6M↓94.3% | $630.0M↑23.3% | $511.1M↑20.8% | $423.1M↑45.4% | $291.0M↓48.5% | $564.8M↓21.9% | $723.5M↑66.6% | $434.4M |
Total Equity | N/A |
Valuation Analysis
Fair Value
Price-to-EarningsTTM
26.3x
Volatile
8Q: 96.8x+5606%
Multiple expansion without fundamental improvement
High PEG ratio (5.2x) suggests expensive for growth
Valuation Lenses
Earnings
26.3x
vs – sector
Cash Flow
45.6x
EV/FCF vs –
Growth-Adj
5.2xPEG
Expensive for growth
Quality-Adj
0.9P/E per %ROIC
ROIC: 30.7%
Shareholder Returns
Dividend
–
Buyback
2.3%
Total Yield
2.3%
Market Cap$64.35B
EV$72.89B
Multi-angle valuation analysis with sector context
Business Quality & Moat
Overall Quality Score
8/100
Below Average
Composite score: Returns (40%) + Consistency (30%) + Earnings Quality (30%)
Returns on Capital
Return on Equity (ROE)Top 10%
-68.4%
8Q:–
Return on Invested Capital (ROIC)Top 25%
30.7%
8Q:–
-17.3%
vs Sector:0.1%
DuPont Analysis (ROIC = NOPAT Margin × Asset Turnover)
NOPAT Margin: 14.4%
Asset Turnover: 1.02x
Earnings Quality
Cash Conversion
1.24x
OCF / Net Income ✓
FCF Consistency
–
Positive quarters
Competitive Moat Indicators
Pricing Power
Gross Margin51.9%
Capital Efficiency
Invested Capital Turnover2.14x
Working Capital
Cash Conversion Cycle-300 days
Growth Quality & Momentum
Low Quality
Growth Quality Score
48/100
Growth 40%
Margins 30%
FCF 20%
Consistency 10%
Growth Rates
Revenue Growth YoY
5.0%
OpInc Growth YoY
-1.2%
EPS Growth YoY
-4.2%
FCF 3Y CAGR
-13.8%
Growth Quality Analysis
⚠Working Capital Drag: FCF growth lagging revenue by 18.8%
⚠Sustainability Index: 3.0/10 - Growth sustainability concerns
Margin Quality & Sustainability
Low Quality
Profitability Cascade
Gross
51.9%
Operating
18.1%
Top 25% in sector
Net
12.5%
Margins Unknown
Earnings Quality Signals
SBC / Revenue
—
FCF vs Net Gap
-4.3 pts
FCF: 8.2% | Net: 12.5%
Quality = stability + cash conversion + low dilution
Balance Sheet & Solvency
Solid
Net Debt / EBITDA
–Net Debt: $8.62B
Interest Coverage
–
Balance sheet risk & solvency analysis