Is AutoZone Stock Priced Right Against Its Peers?

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AutoZone (AZO) ranks second of five auto parts companies on both sales growth and operating margin. Investors value the retailer at a discount. Its shares trade at a lower price-to-earnings multiple than those of O’Reilly Automotive, the only rival remaining in the P/E ranking. AutoZone stock also underperformed three of its four peers over the past year. So how much less are you paying for AutoZone, and what do you give up for it?

How Much Less Do You Pay For AutoZone?

Investors pay 20.2 times AutoZone’s earnings over its latest four reported quarters, compared with 28.0 for O’Reilly over its four quarters ended June 30, 2026, which leave out the quarter O’Reilly reported on October 28. Yet buyers give up little on the business itself. AutoZone’s sales grew 7.4% over that period, against 8.5% at O’Reilly. Its operating margin was 18.3%, finishing just below O’Reilly’s 19.6%.

Advance Auto Parts, Genuine Parts and LKQ each reported a net loss in one of their latest four quarters, so their earnings multiples are excluded from the P/E ranking. AutoZone shares have also underperformed O’Reilly’s stock. AutoZone lost 12.9%, including dividends, in the year to November 3, 2026, compared with a 4.7% loss for O’Reilly.

Where Is AutoZone’s Sales Growth Coming From?

AutoZone now draws its growth from professional customers and new store openings, while its existing locations sell less to do-it-yourself shoppers. In the fiscal fourth quarter ended August 29, 2026, AutoZone’s domestic commercial sales to professional customers rose 8.6% from a year earlier. Domestic do-it-yourself same-store sales fell 0.6%.

Do-it-yourself customers spent more per visit, with the average ticket up roughly 5%, but fewer of these shoppers came in. Management said those customers were putting off repairs and trading down. Companywide, same-store sales grew just 1.5% at constant currency. Management conceded on its September 22, 2026 call that this growth was lower than it would have liked.

AutoZone opened 374 stores in fiscal 2026, the most it has ever opened in a single year. Management said these new locations are running slightly ahead of its sales and profit plans. The retailer also operated 172 Mega Hub stores, which management calls a key part of its commercial growth. This dynamic may be the worry reflected in AutoZone’s lower price: sales grow as the company builds stores, while fewer do-it-yourself customers visit the locations it already has.

AutoZone Expects Little Growth At Existing Stores

For fiscal 2027, management forecast domestic same-store sales to be flat to up low single digits, with the average ticket up about 4%. The company expects faster growth from professional customers, forecasting domestic commercial sales to rise at a high single-digit to low double-digit rate. AutoZone also plans to open about 400 stores. For the first quarter, management expects same-store sales to be relatively flat. This store expansion carries a cost. Management said faster store openings have pressured returns on capital, though it expects returns to rise as the new stores mature.

The lower valuation appears to assume that AutoZone’s existing stores will keep losing do-it-yourself customers while the company spends on new locations. So far, AutoZone’s professional sales and store count are growing, but its same-store sales have barely moved. Domestic same-store sales are the number to watch when AutoZone reports its first quarter of fiscal 2027, expected in December 2026.

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