DCF Studio

    AZO · NYQ · Consumer Cyclical

    AutoZone, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 4875.90

    Market price

    USD 3253.01

    Implied upside

    +49.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-08-31

    AdjustedCapital expenditure runs at 6.1% of revenue against depreciation of 3.1%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 4875.90+49.9%
    Exit multiple
    USD 4589.51+41.1%
    Market price
    USD 3253.01

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn2bn5bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 21.8bnUSD 23.4bnUSD 24.9bnUSD 26.3bnUSD 27.7bnUSD 29.1bnUSD 30.3bnUSD 31.4bnUSD 32.3bnUSD 33.1bn+4.8%
    EBITUSD 4.2bnUSD 4.5bnUSD 4.8bnUSD 5.1bnUSD 5.4bnUSD 5.6bnUSD 5.9bnUSD 6.1bnUSD 6.3bnUSD 6.4bn+4.8%
    NOPATUSD 3.4bnUSD 3.6bnUSD 3.9bnUSD 4.1bnUSD 4.3bnUSD 4.5bnUSD 4.7bnUSD 4.9bnUSD 5.0bnUSD 5.1bn+4.8%
    Add depreciation & amortisationUSD 677.8mUSD 725.5mUSD 772.4mUSD 817.9mUSD 861.5mUSD 902.6mUSD 940.5mUSD 974.7mUSD 1.0bnUSD 1.0bn+4.8%
    Less capital expenditureUSD -1.3bnUSD -1.4bnUSD -1.4bnUSD -1.4bnUSD -1.4bnUSD -1.4bnUSD -1.4bnUSD -1.3bnUSD -1.3bnUSD -1.2bn-0.8%
    Capex, % of revenue6.1%5.8%5.6%5.3%5.1%4.8%4.5%4.3%4.0%3.8%-
    Less increase in working capitalUSD 39.1mUSD 40.5mUSD 39.9mUSD 38.7mUSD 37.1mUSD 34.9mUSD 32.2mUSD 29.1mUSD 25.4mUSD 21.4m+6.5%
    Free cashflow to firmUSD 2.8bnUSD 3.0bnUSD 3.3bnUSD 3.5bnUSD 3.8bnUSD 4.0bnUSD 4.3bnUSD 4.5bnUSD 4.7bnUSD 4.9bn+6.7%
    Discount factor0.96780.90660.84930.79550.74520.69800.65390.61250.57380.5375-
    Present valueUSD 2.7bnUSD 2.7bnUSD 2.8bnUSD 2.8bnUSD 2.8bnUSD 2.8bnUSD 2.8bnUSD 2.8bnUSD 2.7bnUSD 2.7bn-
    Present Value Of The ForecastUSD 27.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.580Reported 0.373, pulled toward 1.0 (Blume)
    Cost of equity7.35%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 7.7x interest cover. Book interest / average debt was lower, at 3.9%.
    Market capitalisationUSD 52.4bn80.3% of capital
    Total debtUSD 12.9bn19.7% of capital, book value as a proxy
    Tax rate20.3%Effective, capped at statutory
    WACC6.75%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 4875.90

    70% of EV

    Forecast FCFF, final year
    USD 4.9bn
    Capex at depreciation, working capital in reinvestment
    USD 5.1bn
    Less reinvestment at g/ROIC (4.2% of NOPAT)
    USD -214.1m
    Capitalised
    USD 4.9bn
    ROIC (reported)
    60.0%
    Terminal value, undiscounted
    USD 118.6bn
    Terminal value, discounted
    USD 63.8bn
    Enterprise value
    USD 91.4bn
    Less net debt
    USD 12.5bn
    Equity value
    USD 78.9bn

    Exit at 14.7x EBITDA

    Value per shareUSD 4589.51

    68% of EV

    Terminal value, undiscounted
    USD 110.0bn
    Terminal value, discounted
    USD 59.1bn
    Enterprise value
    USD 86.8bn
    Less net debt
    USD 12.5bn
    Equity value
    USD 74.2bn

    Spread between methods: 6%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.75%7337.508430.0410010.4012495.7116968.26
    5.75%5376.195928.416652.397641.669072.76
    6.75%4164.844482.324875.915376.036031.77
    7.75%3343.513541.263777.794065.334421.86
    8.75%2750.732880.773032.513211.603425.85

    Outlined: this model. Green text: above today's price of 3253.01. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year5.2%5.0%1.2%
    EBIT margin20.5%19.4%14.0%
    Discount rate-6.8%8.4%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.