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There aren’t many stocks that are trading at a higher entry price than auto parts retailer AutoZone (NYSE: AZO). The stock is trading at over $4,000 per share — $4,065 per share to be exact – as of Tuesday afternoon.

The stock price was down about 1.3% on Tuesday after the company reported mixed fourth quarter results that missed earnings estimates.

• Net sales: $6.24 billion, up 1% year-over-year or 7% excluding sales from an extra week in Q4 a year ago. This met analysts’ expectations.
• Same store sales: up 4.5% year-over-year.
• Net income: $837 million, down 8% from Q4 a year ago.
• Earnings: $48.71 per share, down 6% year-over-year. This fell short of estimates of $50.93 per share.

Earnings were negatively impacted by higher costs of sales, which reduced the gross profit margin. Gross profit as a percentage of sales was down 98 basis points to 51.5%. Also, operating expenses accounted for 32.4% percent of sales, up from 31.6% a year ago.

Aggressively expanding

On the earnings call, president and CEO Phil Daniele said the higher expenses were primarily to fund its growth initiatives.

These investments will help us grow market share, improve the customer experience, speed up delivery times, and drive productivity. We remain committed to being disciplined on SG&A growth, and we will manage expenses in line with sales growth over time,” Daniele said on the earnings call.

The chain opened 141 new stores in Q4 alone and it launched 304 for the full fiscal year. Daniele said AutoZone plans to “aggressively open new stores” in this fiscal year as it seeks to gain market share.

Earnings were affected by an $80 million LIFO (last-in, first out) accounting charge. In Q1, AutoZone anticipates a $120 million LIFO charge due to “higher costs due to tariffs that impact our LIFO layers,” said Daniele.

Tariff impacts

The CEO added that a portion of the Q4 ticket growth, or money spent per transaction, is driven by cost increases from tariffs.

The entire industry has moved retail prices up accordingly. There is a very direct impact associated with tariffs and the fact that you’re starting to see more pronounced same SKU inflation, and as a result, retails across the industry are going up,” Daniele said.

Is AutoZone a buy?

AutoZone has an astronomical share price of $4,065 per share. It has not had a stock split since 1994 and there is no indication that one is coming. So, for now, investors will have to pony up to buy some shares.

Analysts view AutoZone as a solid buy, with a median price target of $4,800, suggesting 18% upside. It plans to open some 325 stores in fiscal 2026 so it is in a major growth spurt. Its free cash flow has been increasing, and it has a manageable debt-to-EBITDAR ratio of 2.5, so it has a solid foundation for growth.

AutoZone stock is up 27% YTD and has a reasonable forward P/E ratio of 24. It doesn’t look like a bad option right now.

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