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AutoZone Inc (NYSE:AZO)
Intrinsic Value: Projected FCF
$395.91 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, AutoZone Inc's projected FCF intrinsic value is $395.91. The stock price of AutoZone Inc is $744.85. Therefore, AutoZone Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 1.9.

AZO' s Price to Intrinsic Value: Projected FCF Range Over the Past 10 Years
Min: 0.77   Max: 38.86
Current: 1.89

0.77
38.86

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of AutoZone Inc was 38.86. The lowest was 0.77. And the median was 1.45.

AZO's Price to Intrinsic Value: Projected FCF is ranked lower than
70% of the 470 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.11 vs. AZO: 1.89 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here AutoZone Inc's FCF(6 year avg) is calculate as

AutoZone Inc Quarterly Data

201405201408201411201502201505201508201511201602201605201608
total_freecashflow 36119427384163382271074030
201111201202201205201208201211201302201305201308201311201402
total_freecashflow 2804824227623810329636427562
201011201102201105201108
total_freecashflow 31221364274

Add all the Free Cash Flow together and divide 6 will get AutoZone Inc's FCF(6 year avg) = $913.32.

AutoZone Inc's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Aug16)/0.8)/Shares Outstanding
=(14.8626533105*913.324833333+-1787.538/0.8)/29.847
=379.94

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

AutoZone Inc's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=744.85/379.937945444
=1.96

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

AutoZone Inc Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
Projected FCF 115.84126.65137.52169.90211.72241.64282.71323.32366.520.00

AutoZone Inc Quarterly Data

May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16
Projected FCF 327.98323.32346.67360.07362.97366.52379.94389.64395.910.00
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