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Tickers in this Article: AZO
AutoZone (NYSE:AZO) is expected to report increased earnings when it releases its first quarter results on Tuesday, December 4, 2012. The consensus estimate is anticipating a profit of $5.40 a share, an increase from last year's $4.68 per share.

Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings. SEE: Surprising Earnings Results

What to Expect: The consensus estimate for AutoZone's earnings is $5.40 per share, up 15.4% from a year ago when the company reported earnings of $4.68 per share.

The consensus estimate, while unchanged in the past month, is down from $5.45 three months ago. For the fiscal year, analysts are projecting earnings of $27.58 per share.

AutoZone is expected to beat last year's reported revenue of $1.92 billion and come in at $2.02 billion for the quarter. The anticipated revenue for the fiscal year is $9.24 billion.

Company Performance: Revenue has grown over the past two quarters on a year-over-year basis. It increased 4.6% to $2.76 billion in fourth quarter of the last fiscal year and 6.7% in the quarter before.

P/E ratio for AZO is 16.3. A simple P/E ratio can reveal the stock's real market value and show how the valuation compares to its industry group or a benchmark like the S&P 500 Index. From the investor's perspective, a stock with a lower ratio is relatively cheaper than a stock with a higher ratio. SEE: Investment Valuation Ratios: Price/Earnings Ratio

Over the past quarter, the stock price has increased from $361.64 on August 31, 2012 to $383.86. The stock saw one of its worst stretches when its price fell $10.54 per share between October 5, 2012 and October 30, 2012.

The Competition: AutoZone is a specialty retailer of automotive replacement parts and accessories, offering an extensive line for cars, sport utility vehicles, vans, and light trucks. Analysts generally consider AutoZone a hold, with eight of 16 analysts rating it as such. This rating hasn't changed in three months.

The company's closest competitor in the retail (specialty) industry is CarMax (KMX). Analysts are less optimistic about AutoZone than about CarMax. Nine out of 12 analysts rate the latter a buy compared to eight of 16 for the former.

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