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    Is AutoZone (AZO) Undervalued Following Its Latest Earnings Report?

    Simply Wall St·10/03/2026 11:20:09
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    Why AutoZone’s Latest Earnings Matter For Shareholders

    AutoZone (AZO) just posted fourth quarter results for the period ended August 29, 2026, with sales of US$6.59b and net income of US$931.59m, putting fresh numbers behind the auto parts retailer’s investment story.

    AutoZone’s latest quarterly report lands after a tougher stretch for the stock, with the share price down 11.62% over 90 days and the 1 year total shareholder return falling 33.76%. However, the 5 year total shareholder return of 66.06% shows longer term holders have still seen meaningful gains overall.

    Compare AutoZone’s latest move against a curated group of resilient retailers and parts suppliers by scanning the list of solid balance sheet and fundamentals (26 results) that may handle tougher stretches more consistently.

    AutoZone’s recent slide could be read as a verdict on the business or simply a sharp reset in mood around the stock. Which story do the current valuation markers point to next?

    Most Popular Narrative: 1% Undervalued

    AutoZone closed at $2,792.03 compared with a narrative fair value of $2,829.08, which keeps the focus on how management choices feed into that small gap.

    The new-store economics arrived this quarter with numbers attached. A store now assumes $1.7 million in first-year sales, ramping to $2.7 million by year six, against an average investment of $2.9 million, a path management says produces roughly 15% ROIC by year four and north of 20% by year six. The prior call’s answer to the same underlying question was qualitative; new stores were “performing better” than the pro forma, full stop. Investors who wanted math instead of adjectives got it.

    See why 1 investors see AutoZone as 1% undervalued.

    According to LunaRodas, this narrative effectively treats AutoZone as almost fairly priced, with only a 1% discount to the estimated fair value. That framing leans heavily on detailed store economics and return on invested capital, which give investors a concrete way to judge whether today’s earnings power can support the current share price plus that small implied upside.

    For shareholders weighing the recent 1 year total return decline of 33.76% against a 5 year gain of 66.06%, the narrative’s fair value of $2,829.08 suggests the recent pullback and the underlying fundamentals are not far apart.

    Result: Fair Value of $2,829.08 (ABOUT RIGHT)

    Still, AutoZone’s narrative depends on DIY traffic eventually stabilising and SG&A discipline improving, and any prolonged traffic weakness or higher expense run-rate could quickly challenge that story.

    Find out about the key risks to this AutoZone narrative.

    Next Steps

    If this mix of optimism and concern around AutoZone feels finely balanced, move quickly to test that impression against the underlying data and weigh both sides through the 4 key rewards and 2 important warning signs.

    Looking For More Investment Ideas Beyond AutoZone?

    Do not stop your research with AutoZone. Fresh ideas from different corners of the market can sharpen your judgment and help you spot patterns others miss.

    • Target overlooked quality by reviewing the 19 high quality undiscovered gems, where the focus is on businesses with strong fundamentals that have not yet attracted broad attention.
    • Prioritise resilience first by scanning the 31 resilient stocks with low risk scores, which highlights companies combining lower risk scores with sturdier financial profiles.
    • Hunt for value with a safety tilt by using the 31 high quality undervalued stocks, which surfaces stocks that pair solid cash generation with balance sheets that support long term compounding.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.