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AutoZone Inc (NYSE:AZO)
Intrinsic Value: Projected FCF
$403.74 (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 $403.74. The stock price of AutoZone Inc is $792.82. Therefore, AutoZone Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 2.0.

AZO' s Price to Intrinsic Value: Projected FCF Range Over the Past 10 Years
Min: 0.77   Max: 38.86
Current: 1.96

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
74% of the 466 Companies
in the Global Specialty Retail industry.

( Industry Median: 1.06 vs. AZO: 1.96 )

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

201408201411201502201504201505201508201511201602201604201605
total_freecashflow 19427384164163382271074030
201202201205201208201211201302201305201308201311201402201405
total_freecashflow 4824227623810329636427562361
201102201105201108201111
total_freecashflow 21364274280

Add all the Free Cash Flow together and divide 6 will get AutoZone Inc's FCF(6 year avg) = $930.74.

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

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(May16)/0.8)/Shares Outstanding
=(14.8626533105*930.735+-1863.282/0.8)/30.405
=378.36

* 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
=792.82/378.361753953
=2.10

* 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

Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15
Projected FCF 96.54115.84126.65137.52169.90211.72241.64282.71323.32384.87

AutoZone Inc Quarterly Data

Aug14Nov14Feb15Apr15May15Aug15Nov15Feb16Apr16May16
Projected FCF 323.32346.67360.07426.56373.66384.87408.23397.12403.740.00
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