Value
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.0 |
| P/S | 8.5 |
| EV/EBITDA | 2.6 |
| Fwd P/E | 7.2 |
| PEG | 5.5 |
| Analyst target | 4.0 |
- ▸Forward P/E: 17.3x
- ▸PEG: 1.36
AZO · Why this verdict
Why AutoZone (AZO) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroRISK_OFF
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Upside to the analyst target is only 4.1% against 13.9% downside to the stop, a reward-to-risk of 0.29 that offers little compensation for risk. Bear case | Price should either pull back toward a better entry or the analyst target should rise enough to lift upside above ~10% over 12 months. | ↓Deteriorating |
| CounterAnalyst targets lag a quality compounder; a rising earnings base could lift targets and make the thin upside temporary. | ||
Quality is strong, with a Piotroski F-Score of 8/9 and best-in-class margins versus peers, supporting a durable operating franchise. Quality breakdown | Margins and the F-Score should hold at current levels across the next 12 months. | ↓Deteriorating |
| CounterEarnings quality shows a red flag at 46% FCF/NI, suggesting reported profits are not converting to cash well. | ||
The stock trades below its 200-day average with a 30-day slope of -2.2%, and the recent bounce is an overbought bear rally at RSI 72. Momentum breakdown | Price should reclaim the 200-day average and the slope turn positive if the downtrend is ending within 12 months. | ↑Improving |
| CounterRising OBV shows volume accumulation and MACD is improving, so the recovery may be real rather than a bear rally. | ||
Forward P/E of 16.5x and PEG of 1.35 pair with modest growth scores (revenue 3.9, earnings 5.0 out of 10), so valuation is reasonable but not cheap for the growth delivered. Valuation breakdown | Earnings growth should accelerate enough to hold the PEG near or below 1.35 over the next year. | ↓Deteriorating |
| CounterA 16.5x forward multiple for a best-in-class retailer is not demanding, and steady buybacks could keep EPS compounding. | ||
Insider selling is immaterial at $4,510,500 (0.009% of market cap) and institutions are accumulating, so ownership flows are not a source of pressure. Insider breakdown | Insider selling should stay below 0.05% of market cap while institutional holdings keep rising. | →Stable |
| CounterThe insider signal is still marked bearish, and any acceleration of selling would undermine the supportive ownership picture. | ||
Upside to the analyst target is only 4.1% against 13.9% downside to the stop, a reward-to-risk of 0.29 that offers little compensation for risk.
↓DeterioratingBear case
- Expectation
- Price should either pull back toward a better entry or the analyst target should rise enough to lift upside above ~10% over 12 months.
CounterAnalyst targets lag a quality compounder; a rising earnings base could lift targets and make the thin upside temporary.
Quality is strong, with a Piotroski F-Score of 8/9 and best-in-class margins versus peers, supporting a durable operating franchise.
↓DeterioratingQuality breakdown
- Expectation
- Margins and the F-Score should hold at current levels across the next 12 months.
CounterEarnings quality shows a red flag at 46% FCF/NI, suggesting reported profits are not converting to cash well.
The stock trades below its 200-day average with a 30-day slope of -2.2%, and the recent bounce is an overbought bear rally at RSI 72.
↑ImprovingMomentum breakdown
- Expectation
- Price should reclaim the 200-day average and the slope turn positive if the downtrend is ending within 12 months.
CounterRising OBV shows volume accumulation and MACD is improving, so the recovery may be real rather than a bear rally.
Forward P/E of 16.5x and PEG of 1.35 pair with modest growth scores (revenue 3.9, earnings 5.0 out of 10), so valuation is reasonable but not cheap for the growth delivered.
↓DeterioratingValuation breakdown
- Expectation
- Earnings growth should accelerate enough to hold the PEG near or below 1.35 over the next year.
CounterA 16.5x forward multiple for a best-in-class retailer is not demanding, and steady buybacks could keep EPS compounding.
Insider selling is immaterial at $4,510,500 (0.009% of market cap) and institutions are accumulating, so ownership flows are not a source of pressure.
→StableInsider breakdown
- Expectation
- Insider selling should stay below 0.05% of market cap while institutional holdings keep rising.
CounterThe insider signal is still marked bearish, and any acceleration of selling would undermine the supportive ownership picture.
Per-dimension breakdown
Quality
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 7.3 |
| Gross margin | 6.3 |
| Op margin | 7.2 |
| Net margin | 6.3 |
| Current ratio | 3.6 |
| FCF quality | 3.7 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: 46% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
4.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.9 |
| EPS growth | 5.0 |
Momentum
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 3.8 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 4.1 |
| Analyst rating | 9.0 |
| Price target | 6.5 |
Insider
6.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.6 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $4,510,500 (0.008% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.6 |
| quality rank | 8.6 |
| growth rank | 6.0 |
- ▸Best-in-class margins
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.9 |
| support resistance | 0.4 |
| 52w position | 5.5 |
| gap | 5.0 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 9.2 |
| volatility | 5.9 |
| put call | 2.8 |
| implied vol | 4.8 |
| max pain risk | 3.0 |
| beta | 10.0 |
| news risk | 5.5 |
- ▸Elevated put/call: 1.58
- ▸Above max pain $3020
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.2 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.4>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (2)
- DEATH_CROSS:momentum=7.4>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.05
Upside
-0.8%
Downside
14.6%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 68, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.05 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.4, Sentiment at 6.7, and Insider at 6.5; the weakest are Technical at 3.0, Growth at 4.5, and Catalyst at 5.2. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.05 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Thin Upside To Target
Trip ifAnalyst-target upside stays below 5% while downside to the stop exceeds 10% for 2 consecutive quarters.
- P2Confirmed Downtrend Bear Rally
Trip ifPrice stays below the 200-day average with slope worse than -2% per 30 days for 3 more months.
- P3Best In Class Margins Quality
Trip ifPiotroski F-Score falls below 6 of 9 from current 8.
- P4Modest Growth Fair Valuation
Trip ifPEG ratio exceeds 2.0 from current 1.35.
- P5Institutions Accumulating Low Insider Pressure
Trip ifInsider selling exceeds 0.1% of market cap in a 90-day window.