In my opinion, AutoZone is overvalued and the company's balance sheet is problematic. (Current liabilities are greater than current assets, giving the stock a negative book value per share.) However, the book value is bad partly because management has opted to buy back shares rather than pay debts, which is good for share holders and for the stock price even if not for the financial health of the company. Also, the odds look good for Autozone to report strong results and to deliver strong guidance on its upcoming earnings date. In August, the price of used cars rose 5.4% on the CPI report, and parts were one of the fastest growing categories on the PPI report. We're headed into a recession economy, where people will buy used cars and fix them rather than buying new. That should be great for parts retailers like Autozone.
