AutoZone, Inc. (AZO) DCF Valuation
TGM's two-stage DCF values AutoZone, Inc. (AZO) between $1,742.50 and $3,893.31 depending on assumptions, with a base case of $2,570.14. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$3,064.48 is justified only if free cash flow grows about +10.5% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 4.0%/yr | 8.5% | $1,742.50 |
| Base case | 7.0%/yr | 7.5% | $2,570.14 |
| Optimistic | 10.0%/yr | 6.5% | $3,893.31 |
| Analyst DCF (FMP) | independent reference — different model | $4,912.76 | |
Current Price
$3,064.48
Market-Implied Growth
+10.5%/yr
vs +7.0% 5Y actual
Model Scenario Range
$1,742.50 – $3,893.31
model output — not a price target
AZO DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for AZO (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.0B · 0.02B shares · net debt $8.5B
Estimated Fair Value
$3128.31
+2.1% vs $3064.48
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 7.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $3064.48; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $4463 | $5004 | $5724 | $6732 | $8245 |
| 6.5% | $3405 | $3714 | $4100 | $4596 | $5257 |
| 7.5% | $2703 | $2896 | $3128 | $3412 | $3767 |
| 8.5% | $2204 | $2333 | $2483 | $2661 | $2875 |
| 9.5% | $1832 | $1922 | $2025 | $2144 | $2282 |
About AutoZone, Inc.
AutoZone, Inc. operates as a leading retailer and distributor specializing in automotive replacement parts and accessories. The company's comprehensive inventory caters to a diverse range of vehicles, including cars, sport utility vehicles, vans, and light trucks. Their product offerings encompass both new and remanufactured critical hard parts, essential maintenance items, various accessories, and a selection of non-automotive goods. Key automotive components available include A/C compressors, batteries, bearings, belts, hoses, brake calipers, chassis parts, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting systems, mufflers, radiators, starters, alternators, thermostats, water pumps, and tire repair kits. For vehicle upkeep, AutoZone supplies antifreeze, windshield washer fluid, an extensive array of brake components (drums, rotors, shoes, pads), various automotive fluids (brake, power steering, oil, transmission), oil and fuel additives, and filters for oil, cabin air, engine air, fuel, and transmission. Other maintenance products cover oxygen sensors, paints, refrigerants, shock absorbers, struts, spark plugs, wires, and windshield wipers. Beyond functional parts, the company offers a wide assortment of accessories and general merchandise such as air fresheners, mobile phone accessories, snacks, drinks, floor mats, seat covers, interior and exterior styling products, mirrors, performance parts, protectants, cleaners, sealants, adhesives, steering wheel covers, car stereos, radios, various tools, and vehicle wash/wax supplies. Additionally, they provide towing services. AutoZone also extends its reach through several channels: a commercial program providing credit and delivery services for professional clients; sales of automotive diagnostic and repair software under the ALLDATA brand via alldata.com and alldatadiy.com; and online retail of its full product range (hard parts, maintenance, accessories, non-automotive items) through autozone.com. As of November 20, 2021, AutoZone maintained a significant operational footprint, with 6,066 stores in the United States, 666 stores in Mexico, and 53 stores in Brazil. The company was established in 1979 and is headquartered in Memphis, Tennessee.
- Sector
- Consumer Cyclical
- Industry
- Specialty Retail
- CEO
- Philip Daniele