AZO · AutoZone
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a weekly close above $3,308.97
Updated ·
Price against the kill line
1.5% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a weekly close above $3,308.97, set on 13 November 2026; only a weekly close settles it. The shares are up 8.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A weekly close above $3,308.97, the 5 November 2026 close, which would show the rebound from the October low extending and the shares leading; or first-quarter fiscal 2027 domestic same-store sales growth above 3% on 8 December 2026.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Consumer Discretionary
Quarter to 9 May 2026, filed 12 June 2026
- Revenue, latest quarter ($M)
- 4,841
- Revenue, change on a year (%)
- +8.4
- Gross margin (%)
- 52.2
- Operating margin (%)
- 19.1
- Net cash, cash less debt ($M)
- −8,799
All filed numbers
What AutoZone reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| filed | 4,841 | +8.4 | 52.2 | 19.1 |
| filed | 4,274 | +8.1 | 52.5 | 16.3 |
| filed | 4,629 | +8.2 | 51.0 | 16.9 |
| filed | 4,464 | +5.4 | 52.7 | 19.4 |
| filed | 3,952 | +2.4 | 53.9 | 17.9 |
| Pre-tax income ($M) | 813 |
| Net income ($M) | 642 |
| Diluted shares, change on a year (%) against the quarter to 10 May 2025 | −2.1 |
| Operating cash flow ($M) | Not available |
| Capital spending ($M) | Not available |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 326 |
| Debt ($M) | 9,125 |
| Net cash, cash less debt ($M) | −8,799 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 755 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | −2,503 |
| Market value ($M) | 52,463 |
| Enterprise value, market value plus net debt ($M) | 61,262 |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not available |
| Price to book value (×) | Not meaningful |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 13 November 2026): 3.6% of shares outstanding sold short, 2.9 days of average trading to cover, +8.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $22.9M |
| 12 monthsfrom | $1.7M | $61.8M |
The thesis
AutoZone is more likely to lag the S&P 500 over the next three months. Its domestic same-store sales are growing far more slowly than O'Reilly Automotive's, and the latest quarter's profit growth leaned on one-time margin gains. The first-quarter fiscal 2027 report on 8 December 2026 shows whether sales start to speed up, as the chief executive said they would.
For the 16 weeks ended 29 August 2026, AutoZone reported domestic same-store sales growth of 1.6%, according to its 22 September 2026 results release. Diluted earnings per share (EPS) rose 15.1% to $56.05. Gross margin rose 182 basis points to 53.3%, but 145 basis points of that came from tariff refunds and 105 basis points from a net non-cash LIFO (last-in, first-out inventory accounting) benefit. Operating expenses rose to 33.4% of sales from 32.4%. Without the two accounting and refund items, the quarter shows costs growing faster than sales.
The rating is Low because O'Reilly, the closest peer, reported comparable store sales growth of 7.2% for the quarter ended 30 September 2026 and raised its full-year range to 5.5%–6.5%. AutoZone's chief financial officer is also leaving on 25 November 2026 with no permanent successor named. The release gave no numeric guidance for fiscal 2027.
On price, the shares closed at $3,252.19 on 12 November 2026. That is 18.6% below the 52-week intraday high of $3,996.24 from 1 December 2025 and level with the 200-day moving average. In the market's view, the slowdown is partly priced, but so is a fiscal 2027 recovery that same-store sales have not yet shown.
Bullish and bearish views on AutoZone, Inc.
The bull case on AutoZone, Inc. (AZO), in brief: commercial sales are still growing fast. The bear case: losing ground to O'Reilly.
Bull case
- Commercial sales are still growing fast. Domestic commercial sales rose 8.6% to $1.9 billion in the fourth quarter of fiscal 2026, and average weekly sales per commercial program rose 2.7%, according to the 22 September 2026 release.
- Steady buybacks shrink the share count. AutoZone bought back 579,000 shares for $2.0 billion in fiscal 2026, including $697.5 million at an average of $3,125 in the fourth quarter. It had $1.6 billion of authorization left at year end, according to the 22 September 2026 release.
- Store growth is speeding up. The company opened 374 stores in fiscal 2026, ending with 8,031, including 1,001 in Mexico and 167 in Brazil. It opened 16 US Mega Hub stores in the fourth quarter, according to the 22 September 2026 release.
- The trend improved late in the quarter. Domestic same-store sales averaged about 1.4% in the first 12 weeks of the fourth quarter, then 2.1% in August, according to earnings-call coverage of 22 September 2026.
- Some analysts see upside. Bank of America reinstated coverage at Buy with a $3,800 target on 26 October 2026, citing commercial growth. Rothschild & Co Redburn's target is $4,450, cut from $4,700 on 26 October 2026.
Bear case
- Losing ground to O'Reilly. O'Reilly's comparable store sales rose 7.2% in its quarter ended 30 September 2026, with professional sales up slightly more than 10%. AutoZone's domestic same-store sales rose 1.6% in its quarter ended 29 August 2026. The two quarters end a month apart, but the gap is wide.
- Margin gains will not repeat. Tariff refunds added $96 million and 145 basis points to fourth-quarter gross margin, according to the 22 September 2026 release. For fiscal 2026 as a whole, gross margin fell to 52.3% from 52.6%.
- Costs are rising faster than sales. Operating expenses rose to 33.4% of sales from 32.4% in the fourth quarter, which the company put down to growth spending. Full-year operating profit rose 3.1% on sales up 7.4%.
- Inventory is growing faster than sales. Merchandise inventory rose 10.1% to $7.7 billion while quarterly sales grew 5.6%. Net inventory per store, after payables, moved to negative $107,000 from negative $131,000, so suppliers are funding less of the stock.
- The finance chief is leaving. Jamere Jackson resigned on 20 October 2026, effective 25 November 2026, to become chief financial officer of FedEx, according to AutoZone's 8-K of 26 October 2026. Controller J. Scott Murphy will act as principal financial officer while an outside search runs.
Price setup
The shares closed at $3,252.19 on 12 November 2026. That is just above the 200-day moving average of $3,242.90 and well above the 50-day moving average of $3,013.69, both from adjusted daily closes as of 12 November 2026. Over three months the shares gained 7.5%, from a $3,025.00 close on 14 August 2026.
The 52-week closing low was $2,792.03 on 2 October 2026. The rebound since then took the shares to a $3,308.97 close on 5 November 2026, then back to between $3,216.35 and $3,252.19 in the four sessions after it. The 52-week intraday high is $3,996.24, from 1 December 2025.
The case turns on two levels. Holding above the 200-day average would show buyers paying for a fiscal 2027 sales recovery before the 8 December 2026 report. Weekly closes back below the 50-day average would put the shares back where they traded around the fiscal 2026 report.
Catalysts ahead
- 25 November 2026: CFO Jamere Jackson's resignation takes effect; Controller J. Scott Murphy becomes interim principal financial officer. AutoZone reports its first quarter without a permanent finance chief. Naming an outside successor would remove a source of uncertainty about how capital, buybacks and margins are managed.
- 8 December 2026: First-quarter fiscal 2027 results, for the quarter ended 21 November 2026. Domestic same-store sales show whether the 2.1% August pace is speeding up toward O'Reilly's growth rate. Gross margin shows how much of fiscal 2026's margin gain disappears without tariff refunds.
What would change the view
A weekly close above $3,308.97, the 5 November 2026 close, which would show the rebound from the October low extending and the shares leading; or first-quarter fiscal 2027 domestic same-store sales growth above 3% on 8 December 2026.
What it trades with
AutoZone trades mainly with the other auto-parts retailers, O'Reilly Automotive and Advance Auto Parts, and on its own same-store sales figures. It has little exposure to the technology and AI names that drive much of the S&P 500. That makes the three-month comparison mostly a question of whether AutoZone's sales recover while the index's growth leaders keep rising.
Over long periods it has compounded well. Benzinga calculated on 11 November 2026 that the shares returned 18.11% a year on average over 20 years, 9.31 percentage points a year ahead of the market, with a market capitalization of $51.78 billion. Bank of America took AutoZone out of its "Value 10" portfolio in the 4 November 2026 rebalance after the company's earnings-surprise ratings fell below that list's threshold.
Notes
- AutoZone's fiscal year ends in late August. Its first three quarters are 12 weeks long and the fourth quarter is 16 weeks, so quarterly figures are not directly comparable to calendar-quarter peers.
- AutoZone pays no dividend. It returns capital to shareholders through share buybacks, which totalled $2.0 billion in fiscal 2026.
The evidence, claim by claim (8)
- Fourth-quarter fiscal 2026 net sales rose 5.6% to $6.6 billion. Domestic same-store sales rose 1.6%, and diluted EPS rose to $56.05 from $48.71. AutoZone fourth-quarter fiscal 2026 results release (8-K exhibit 99.1) · as of
- Fourth-quarter gross margin rose 182 basis points to 53.3%. Tariff refunds added 145 basis points and a net non-cash LIFO impact added 105 basis points. AutoZone fourth-quarter fiscal 2026 results release (8-K exhibit 99.1) · as of
- Fourth-quarter operating expenses rose to 33.4% of sales from 32.4%. Full-year fiscal 2026 operating profit rose 3.1% on sales up 7.4%. AutoZone fourth-quarter fiscal 2026 results release (8-K exhibit 99.1) · as of
- Domestic commercial sales rose 8.6% to $1.9 billion in the fourth quarter of fiscal 2026. Merchandise inventory rose 10.1% to $7.7 billion. AutoZone fourth-quarter fiscal 2026 results release (8-K exhibit 99.1) · as of
- O'Reilly Automotive's comparable store sales rose 7.2% in the quarter ended 30 September 2026. It raised its full-year comparable sales range to 5.5%–6.5%. O'Reilly Automotive third-quarter 2026 results release (8-K exhibit 99.1) · as of
- CFO Jamere Jackson resigned on 20 October 2026, effective 25 November 2026. Controller J. Scott Murphy will serve as principal financial officer during an external search for a successor. AutoZone 8-K filed 26 October 2026 · as of
- Bank of America reinstated coverage of AutoZone at Buy with a $3,800 price target, citing commercial growth. Benzinga report on Bank of America note, 26 October 2026 · as of
- CFO Jamere Jackson exercised options on 6,900 shares at $1,139.99 and sold 6,900 shares at an average of $3,319.71 on 4 November 2026. SEC Form 4 filed 6 November 2026 · as of
Sources
- AUTOZONE INC - Form 8-K - FY2026 · sec.gov
- AUTOZONE INC - Form 8-K - FY2026 · sec.gov ·
- O REILLY AUTOMOTIVE INC - Form 8-K - FY2026 · sec.gov
- cfo.com
- AutoZone Q4 FY26 EPS rises 15.1% to $56.05; net sales climb 5.6% to $6.6 billion · capital.com
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