As of May 31, 2025, Autozone Inc's estimated intrinsic value ranges from $1684.11 to $5412.01 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $5412.01 | +45.0% |
| Discounted Cash Flow (5Y) | $4596.27 | +23.1% |
| Dividend Discount Model (Multi-Stage) | $3045.33 | -18.4% |
| Dividend Discount Model (Stable) | $3672.76 | -1.6% |
| Earnings Power Value | $1684.11 | -54.9% |
Is Autozone Inc (AZO) undervalued or overvalued?
With the current market price at $3733.04, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Autozone Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.57 | 0.61 |
| Cost of equity | 6.5% | 8.3% |
| Cost of debt | 4.0% | 4.6% |
| Tax rate | 20.7% | 21.1% |
| Debt/Equity ratio | 0.15 | 0.15 |
| After-tax WACC | 6.1% | 7.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $4,596 | $85,647M | 84.1% |
| 10-Year Growth | $5,412 | $99,294M | 71.4% |
| 5-Year EBITDA | $2,784 | $55,329M | 75.4% |
| 10-Year EBITDA | $3,640 | $69,647M | 59.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $2,504M |
| Discount Rate (WACC) | 7.7% - 6.1% |
| Enterprise Value | $32,631M - $41,222M |
| Net Debt | $8,751M |
| Equity Value | $23,880M - $32,471M |
| Outstanding Shares | 17M |
| Fair Value | $1,427 - $1,941 |
| Selected Fair Value | $1684.11 |
| Metric | Value |
|---|---|
| Market Capitalization | $62454M |
| Enterprise Value | $71205M |
| Trailing P/E | 23.96 |
| Forward P/E | 23.18 |
| Trailing EV/EBITDA | 10.40 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.15 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $1623.60 |
| Discounted Cash Flow (5Y) | 25% | $1149.07 |
| Dividend Discount Model (Multi-Stage) | 20% | $609.07 |
| Dividend Discount Model (Stable) | 15% | $550.91 |
| Earnings Power Value | 10% | $168.41 |
| Weighted Average | 100% | $4101.06 |
Based on our comprehensive valuation analysis, Autozone Inc's weighted average intrinsic value is $4101.06, which is approximately 9.9% above the current market price of $3733.04.
Key investment considerations:
Given these factors, we believe Autozone Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.