GET DAILY SIGNALSWhy Is AutoZone (AZO) Stock Down -5% Today?
Key Takeaways
- AZO shares are trading roughly 5% lower in premarket action on May 26, 2026, following the release of third-quarter fiscal 2026 earnings before the opening bell.
- While adjusted earnings per share of $38.07 topped analyst expectations of $36.22 — a beat of $1.85 — quarterly revenue of $4.84 billion fell short of the anticipated $4.86 billion consensus.
- Domestic same-store sales grew 4.1% and total company same-store sales rose 3.9% in constant currency — both solid in isolation, but evidently below the bar the market had set for a stock trading near all-time highs.
- Gross margin contracted by 57 basis points, partly due to a non-cash LIFO effect, adding pressure to investor sentiment.
- Traders are now watching the earnings conference call at 10:00 a.m. ET for management commentary on consumer trends, international expansion, and the remainder of fiscal 2026.
Opening Summary
AutoZone, Inc. (AZO) is the largest retailer and distributor of automotive replacement parts and accessories in the United States, with more than 7,800 locations across the Americas serving both do-it-yourself consumers and commercial repair professionals. Shares are trading approximately 5% lower in premarket trading on May 26, 2026, after the company released its fiscal third-quarter results before the market open. AZO closed at $3,406.50 on May 22, 2026 — the most recent regular session — and is indicated near the $3,236 range in premarket activity. The immediate market reaction reflects disappointment with a top-line revenue miss and below-expectation same-store sales growth, which overshadowed a meaningful earnings-per-share beat.
Earnings Miss on Revenue and Same-Store Sales
AutoZone reported fiscal Q3 2026 net revenue of $4.84 billion, an increase of 8.4% year over year but approximately $20 million below the Wall Street consensus of $4.86 billion. EPS came in at $38.07 on a GAAP basis, exceeding analyst forecasts of $36.22 by $1.85, or roughly 5.3% — a meaningful beat in absolute terms. However, investors zeroed in on the revenue shortfall and the pace of same-store sales growth: domestic comparable-store sales rose 4.1% and total company comps increased 3.9% in constant currency, figures that, while positive, appear to have fallen short of higher buy-side expectations heading into the print.
Margin Pressure Adds to the Selloff
Beyond the top-line miss, gross margin contracted by 57 basis points compared to the prior-year period, driven in part by a 77-basis-point non-cash LIFO inventory accounting effect. Operating margin held at 19.1% of sales, roughly flat year over year, supported by disciplined expense management and strong sales growth — a relative bright spot. Nevertheless, the combination of compressing gross margins and a revenue miss created enough uncertainty to push the stock sharply lower in premarket trading, as investors recalibrated expectations for the company's pricing power and cost structure in the current environment.
Store Expansion Continues, International Progress Noted
AutoZone continued its aggressive store rollout during the quarter, opening 82 net new locations globally — 57 in the United States, 20 in Mexico, and 5 in Brazil — bringing the worldwide store count to 7,856. Net income for the quarter rose to $641.5 million, up from $608 million in the same period last year, reflecting the benefits of scale and execution on the commercial side of the business. CEO Phil Daniele highlighted strong domestic results and operating income growth exceeding 19% for the quarter as evidence of operational discipline, though the market's focus remained squarely on the revenue and comparable sales shortfall.
Market Context and Trading Activity
The premarket decline in AZO comes against a backdrop where the stock had already shown some softness through May, closing at $3,321.15 on May 15 after trading near $3,477 earlier in the month. With AZO typically commanding a premium valuation relative to auto parts peers such as O'Reilly Automotive and Advance Auto Parts, any top-line disappointment tends to generate an outsized price reaction. Volume in the premarket session is likely to be elevated relative to AutoZone's average daily turnover of approximately 280,000–500,000 shares, as traders reposition around the earnings catalyst. Key technical support sits near the $3,302–$3,372 range based on recent lows and standard deviation bands.
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What Comes Next for AZO
The most immediate catalyst ahead is the earnings conference call on May 26, 2026 at 10:00 a.m. ET, where management is expected to address the revenue shortfall directly and provide context on consumer demand trends, international growth momentum, and any outlook commentary for the fiscal fourth quarter. Analysts will scrutinize whether the 4.1% domestic same-store sales growth represents a durable acceleration from Q2's 5.2% print — which itself was considered a miss at the time — or signals a softening demand trend that could weigh on full-year estimates. Macro factors including consumer spending resilience, vehicle age trends (which historically drive aftermarket parts demand), and any tariff-related cost commentary from management will be closely watched. With the average analyst price target sitting near $4,200–$4,300, a wide gap versus the current premarket level implies that the bull case remains intact for longer-term holders, even as near-term sentiment is under pressure.
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AZO's RSI Indicator recovers from overbought zone
The 10-day RSI Oscillator for AZO moved out of overbought territory on October 23, 2026. This could be a sign that the stock is shifting from an upward trend to a downward trend. Traders may want to look at selling the stock or buying put options. Tickeron's A.I.dvisor looked at 36 instances where the indicator moved out of the overbought zone. In 28 of the 36 cases the stock moved lower in the days that followed. This puts the odds of a move down at 78%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 36 of 66 cases where AZO's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 55%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AZO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 49%.
AZO broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 13, 2026. You may want to consider a long position or call options on AZO as a result. In 54 of 78 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 69%.
The Moving Average Convergence Divergence (MACD) for AZO just turned positive on October 06, 2026. Looking at past instances where AZO's MACD turned positive, the stock continued to rise in 26 of 45 cases over the following month. The odds of a continued upward trend are 58%.
AZO moved above its 50-day moving average on October 15, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for AZO crossed bullishly above the 50-day moving average on October 19, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 11 of 19 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 58%.
Following a +3.70% 3-day Advance, the price is estimated to grow further. Considering data from situations where AZO advanced for three days, in 189 of 337 cases, the price rose further within the following month. The odds of a continued upward trend are 56%.
The Aroon Indicator entered an Uptrend today. In 105 of 240 cases where AZO Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 44%.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 3 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: AZO's P/B Ratio (-17.883) is very low in comparison to the industry average of (0.781). P/E Ratio (21.575) is within average values for comparable stocks, (39.881). Projected Growth (PEG Ratio) (1.318) is also within normal values, averaging (1.494). Dividend Yield (0.000) settles around the average of (0.043) among similar stocks. P/S Ratio (2.426) is also within normal values, averaging (49.456).
The Tickeron Profit vs. Risk Rating rating for this company is 44 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. AZO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 65 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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General Information
a distributor of automotive replacement parts and accessories
Industry AutoPartsOEM
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