So here’s a fun fact that’ll make you question everything: AutoZone stock is trading at over $4,000 per share. Yes, you read that right. Four. Thousand. Dollars. For one share. That’s more than most people’s monthly rent, and definitely more than that 2015 Honda Civic you’ve been eyeing on Craigslist.
The auto parts giant just dropped their Q4 earnings, and let’s just say the market wasn’t exactly throwing confetti. The stock dipped about 1.3% because apparently making $6.24 billion in sales and growing same-store sales by 4.5% isn’t impressive enough for Wall Street these days. Tough crowd.
Here’s where it gets interesting (and by interesting, I mean expensive): AutoZone missed earnings estimates, pulling in $48.71 per share instead of the expected $50.93. Now, before you panic-sell your imaginary AutoZone shares, let’s talk about why this happened.
The Plot Thickens: Growth Costs Money
CEO Phil Daniele basically said, “Hey, we’re spending money to make money,” which is business speak for “trust the process.” They opened 141 new stores in Q4 alone – that’s like opening a new store every 2.5 days. These aren’t corner lemonade stands; we’re talking full-scale auto parts operations.
The company’s gross profit margin took a hit (down to 51.5%), but here’s the thing – they’re playing the long game. All those new stores? They’re investments in market share. It’s like buying expensive gym equipment; it hurts your wallet now, but hopefully pays off later when you’re swole… or in this case, when you dominate the auto parts market.
The Tariff Situation (Because 2025 Keeps Getting Weirder)
Plot twist: tariffs are making everything more expensive. Shocking, I know. AutoZone got hit with an $80 million LIFO charge in Q4, and they’re expecting a $120 million hit in Q1. For those keeping score at home, that’s $200 million in tariff-related costs. That’s not pocket change, even for a company pulling in billions.
The silver lining? The entire industry is raising prices, so it’s not like AutoZone is the only one dealing with this mess. When everyone’s expensive, no one is… wait, that’s not how economics works.
So, Should You Buy This Ridiculously Expensive Stock?
Here’s where things get spicy: analysts are actually bullish on AutoZone. Their median price target is $4,800, suggesting 18% upside. That means they think this already expensive stock could get even more expensive. It’s like saying a $50 avocado toast could be worth $59.
The fundamentals aren’t terrible – the company’s up 27% year-to-date, has decent cash flow, and a manageable debt situation. Plus, they’re planning to open 325 more stores next year because apparently they’re not done with their expansion spree.
The catch? AutoZone hasn’t done a stock split since 1994. That’s 31 years of letting their stock price climb into the stratosphere while the rest of us mere mortals watch from the sidelines.
Bottom line: AutoZone might be expensive enough to make your wallet cry, but the company’s growth story isn’t over. Just maybe start saving now if you want to join the $4,000-per-share club.