| 2012 | 2018 | 2019 | 2020 (projected) | Consolidated Income | 1.34 B | 1.62 B | 1.86 B | 1.63 B | Direct Expenses | 5.25 B | 5.5 B | 4.95 B | 4.56 B |
What should you know about AutoZone (NYSE:AZO) volatility?
 | By Rifka Kats | Macroaxis Story |
Considering the 90-days investment horizon, AutoZone is expected to generate 0.99 times more return on investment than the market. However, the company is 1.01 times less risky than the market. It trades about 0.07 of its potential returns per unit of risk. The DOW is currently generating roughly 0.06 per unit of risk. As many old-fashioned traders are trying to avoid consumer cyclical space, it makes sense to outline AutoZone a little further and try to understand its current volatility patterns. We will inspect how risky is to take a position in AutoZone at this time.
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Reviewed by Michael Smolkin
AutoZone has roughly 543.5 M in cash with 2.14 B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 23.27. Volatility is a rate at which the price of AutoZone or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of AutoZone may increase or decrease. In other words, similar to AutoZone's beta indicator, it measures the risk of AutoZone and helps estimate the fluctuations that may happen in a short period of time. So if prices of AutoZone fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
How important is AutoZone's Liquidity
AutoZone financial leverage refers to using borrowed capital as a funding source to finance AutoZone ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. AutoZone financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to AutoZone's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of AutoZone's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between AutoZone's total debt and its cash.
AutoZone Gross Profit
AutoZone Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing AutoZone previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show AutoZone Gross Profit growth over the last 10 years. Please check AutoZone's gross profit and other fundamental indicators for more details.
AutoZone Volatility Drivers
AutoZone unsystematic risk is unique to AutoZone and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in AutoZone you can also buy Target. You can also mitigate this risk by investing in the consumer discretionary sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing AutoZone important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in AutoZone income statement and balance sheet. Here are more details about AutoZone volatility.Click cells to compare fundamentals
Breaking down AutoZone Indicators
The latest indifference towards the small price fluctuations of AutoZone could raise concerns from institutional investors as the firm it trading at a share price of 1186.01 on slow start in volume. The company executives did not add any value to AutoZone investors in August. However, most investors can still diversify their portfolios with AutoZone to hedge their inherited risk against high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 1.13. The below-average Stock volatility is a good sign for longer-term investment options and for buy-and-hold investors.
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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of AutoZone. Please refer to our Terms of Use for any information regarding our disclosure principles.