Wall Street Slept on This Amazon-Proof Business Model. It’s Now at a 5-Year Discount.

While the marketplace obsesses implicit each NVIDIA net whisper, an unglamorous parts retailer successful Memphis has softly go 1 of the astir absorbing contrarian setups of 2026. On a caller Barron's Streetwise episode, big Jack Hough and D.A. Davidson expert Michael Baker laid retired a thesis that cuts against the existent AI mania: AutoZone is "the other of what the marketplace is fixated connected close now," and the terms tag has yet travel down to conscionable the opportunity.

The "Consult to Sell" Moat Wall Street Keeps Underestimating

The casual abbreviated transportation connected car parts retailers was simple: Amazon volition devour them. Baker's effect is that the experimentation already ran. Amazon pushed aggressively into car parts backmost successful 2017, and the incumbents kept compounding close done it.

The astir damning grounds for the Amazon carnivore lawsuit comes from the retailers' ain pricing. AutoZone (NYSE:AZO) and its peers connection steep online discounts, typically $20 disconnected a $100 bid shipped to your door, yet lone 1% to 2% of income really hap that way. As Baker enactment it connected the podcast, "Customers are really paying an other $20 to spell into the store due to the fact that they request to speech to the associates."

That is the moat. Baker calls it "consult to sell." Even experienced DIY mechanics privation a quality to corroborate they are buying the close caliper for a 2014 Silverado. Add successful the nonrecreational mechanic who needs the portion successful 30 minutes, and the e-commerce transportation exemplary breaks down. "If they were going to beryllium impacted by Amazon, we would've seen it already," Baker said.

A Five-Year Valuation Discount

AZO is down 16% implicit the past twelvemonth and down 8% twelvemonth to date, portion the SPY is up 24% implicit the aforesaid one-year stretch. The guardant P/E sits astatine 18 with a trailing P/E of 21, against an expert people of $3,937. AutoZone's guardant P/E has fallen to 18, beneath its five-year mean of much than 19, and that compression is happening portion net estimates person been moving up. Wall Street projects double-digit net gains successful the fiscal years ahead.