Autozone

- Ankur Jaswal - Aaron Baumann - Lilly Li
Company Profile
Company Profile
Started under the name Auto Shack Inc. in Forrest

Industry Analysis
City, Arkansas in 1979

Key Statistics Technical Analysis SWOT Analysis Recommendation
Changed name to AutoZone in 1987
AutoZone IPOd in 1991 on the NYSE

Largest uto parts retailer with 4,534 stores in the US and Puerto Rico Nations leading retailer and distributor of automotive parts
Company Profile
Company Profile Industry Analysis Key Statistics
Autozone sells new and remanufactured hard parts,

maintenance items and accessories for most cars, trucks, and SUVs
Technical Analysis SWOT Analysis Recommendation
Also sells its computer-based automotive diagnostic

and repair guide ALLDATA to professional mechanics Primarily caters to DIY customer, though currently expanding to the commercial markets
Industry Analysis
Name
Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis Recommendation
Market Cap
P/E Ratio
Net Profit Margin
Quarterly Rev. Growth 8.1%
Autozone (AZO) OReilly Automotive (ORLY) Advanced Auto Parts (AAP) Pep Boys (PBY)
$12.80B
16.48
11.41
$9.67B
21.69
9.67
7.7%
$4.91B
14.24
7.21
4.2%
$572.57M
14.32
2.67
3.5%
Price: $325 Market Cap(mm): 14,552.1 Enterprise Value: 16,845 Average Daily Volume: 401,203 Net Cash/Share: $2.32 EPS (Net) 2010A Q1 $2.82 Q2 2.43 Q3 4.12 Q4 5.66 FY Aug $14.90A 2011A 3.77 3.34 5.29 7.18 $19.41A 2012E 4.31 3.68 6.09 7.69 $ 21.62
*All Estimates are calculated from Stifel Nicolaus models.
Introducing the PEG Ratio. Widely used indicator of a stocks potential value. Valued more over price/earnings ratio because it also accounts for GROWTH. = (P/E) / (Annual EPS Growth) AAP: .98 ORLY: 1.26 AZO: .98 ORLY is OVERVALUED in the sector.
Analysis Behind Estimates

Raised 1Q12 estimates from $4.05 to $4.31. (4.33 Street estimates). Driven by +2% comp sales, +2.5% YOY SG&A per foot (vs. +2.9% y/y prior). AZO repurchased $433 mm worth of stock in 4Q11. (1.5 mm shares). Management believes it is early innings for AZOs internet platform. Leveraging the internet for online ordering is a primary focus for FY12. (Improving their biggest weakness WEBSITE DESIGN)
-Take a look at the top-line on the financials
Continuous Stock Repurchases

Not as great as dividend (no yield support); however, company has one of the most buybacks on the street. Stock Repurchase (BUYBACK) is when a company purchase its OWN shares and removes them from the market. In terms of Supply and Demand for the company, there less supply of stock. 11 Billion in stock repurchases since 1998. Recently announced 750 mm buyback
IPO in 1991 - $23 / Share
-Considered overvalued at IPO dated
COMPETITORS 1 YEAR AAP vs ORLY

Now take a look at AZO 1 Year
Now take a look at AZO 1 Year
Euro-Crisis
Relative Strength Index
Williams % R
SWOT Analysis Strengths

Market share leader with over 4,600 stores nation wide Profit margins increasing from 50.5% to 51.2% through house-brands Stock repurchase of 1.5 million shares Strong store management and training programs helps keep a competitive advantage Loyal customers
SWOT Analysis Weaknesses

High staff turnover causes unstable customer experience Slow, but positive expansion Web 1.0 website: though easy to navigate, basic looks with little digital strategy in mind
SWOT Analysis Opportunities

Upgrade to Web 2.0 through redesign of website Create new market and services for older cars Expand parts holdings to more European makes Decrease in auto sales means less people are buying new cars Recession brings out the DIYer
SWOT Analysis Threats

Company Profile Industry Analysis Key Statistics Technical Analysis SWOT Analysis
Due to higher fuel costs, consumers are putting less miles on cars Government offering new car subsidy programs Competition from Pep Boys, Advanced Auto Parts, and big box stores (Wal-Mart, Costco)
Recommendation
Holiday Spending Outlook

According to the NRF consumers plan to spend an 2.1% less than last year and this estimate is expected to hurt retailers. Notable Increase in online spending YOY. An overall WEAK outlook for 4Q11. AZO is the best name going into the holiday season! -With our concerns about the broader macro environment over the near term (decrease in holiday spending and Europe) a low discretionary name as AZO has a lot of downside protection. -Only 17% of AZOs annual EPS comes from 4Q (holiday season). -Best retail stock.

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- Ankur Jaswal - Aaron Baumann - Lilly Li

Started under the name Auto Shack Inc. in Forrest

City, Arkansas in 1979

Changed name to AutoZone in 1987

AutoZone IPOd in 1991 on the NYSE

Autozone sells new and remanufactured hard parts,

Technical Analysis SWOT Analysis Recommendation

Also sells its computer-based automotive diagnostic

Net Profit Margin

Quarterly Rev. Growth 8.1%

*All Estimates are calculated from Stifel Nicolaus models.

Analysis Behind Estimates

-Take a look at the top-line on the financials

Continuous Stock Repurchases

IPO in 1991 - $23 / Share

-Considered overvalued at IPO dated

COMPETITORS 1 YEAR AAP vs ORLY

Now take a look at AZO 1 Year

Now take a look at AZO 1 Year

Relative Strength Index

SWOT Analysis Strengths

SWOT Analysis Weaknesses

SWOT Analysis Opportunities

SWOT Analysis Threats

Holiday Spending Outlook

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