Should I Buy AutoZone (AZO)? Finance YouTuber Analysis

The YouTuber highly recommends Autozone as a counter-cyclical stock that thrives during economic downturns. He notes it rose 16% in 2008 and has delivered a 17% annual return since, explaining that people repair existing cars rather than buying new ones during crises. He also points out its current reasonable valuation.

“Autozone, esta es una de mis empresas favoritas que me ha protegido mucho las crisis, en las cuales siempre he tenido inversiones... En 2008 subió un 16%, pero es que posteriormente ha dado un 17% en bolsa. Esto es esto es una barbaridad.”

AutoZone trades at a high share price, making it a potential candidate for a stock split. The auto parts sector is supported by the increasing average age of cars on the road, suggesting continued demand for its services.

“AutoZone ticker AO one of the three major auto parts stores trades for over $2,800 a share the stock split last in 1992 and 1994 but it's been three decades since”

The YouTuber recommends AutoZone, citing its historical outperformance during the 2008 crash and its current positive returns year-to-date. He argues that in a recession, people fix older cars rather than buying new ones, benefiting auto parts retailers. He also believes AutoZone has a stronger competitive advantage than its peers.

“I think either of those three AutoZone, O'Reilly or Advanced Auto Parts will help protect your portfolio... I think AutoZone has a stronger competitive advantage in the business.”

The analyst recommends buying AutoZone stock today for a 10-year hold, citing its strong cash flow, consistent revenue and earnings growth (7% annually), low debt (2x EBITDA), and share buybacks. He believes the company is well-positioned due to macroeconomic trends like increased vehicle mileage and elevated used car prices, leading to more maintenance and parts demand. The stock is considered well-priced, with a conservative forecast suggesting a 10% annual return, potentially outperforming the market.

“AutoZone stock is performing extremely well with lots of cash flow we're going to buy the stock today and hold it for 10 years and I'm gonna show you why it's going to outperform the market during that time.”

The YouTuber suggests AutoZone as a stock that benefits from cost-saving consumer behavior during a recession. He notes its 16.3% year-over-year growth in 2008, as people opt for DIY vehicle maintenance.

“AutoZone stock in 2008 had a 16.3 percent growth year every year”