Over time, the stock market generally climbs a wall of worry to enrich participants. But as we have been reminded more than once over the past year, that doesn't come without bumps in the road. Economic and geopolitical uncertainty around the world has pushed the S&P 500 index 9% lower during that time.

However, some stocks are more resilient in troubling periods. Even in a down market, shares of auto replacement parts and accessories retailer AutoZone (AZO 1.35%) have soared 25% in the last 12 months. But is it still a buy for growth investors after such a huge rally? Let's drill down into the company's fundamentals and valuation to resolve this question.

Sales and earnings are roaring ahead

AutoZone is a well-known auto parts retailer in the Americas. The company had over 6,200 stores in the U.S., more than 700 stores in Mexico, and 81 stores in Brazil. Its extensive offering of parts and helpful employees make its stores a one-stop shop for both types of customers: the do-it-yourselfers (DIYers) and professional repair shops.

The company's net sales increased 9.5% year over year to $3.7 billion in the fiscal second quarter (ended Feb. 11). AutoZone's same-store sales grew by 5.3% versus the year-ago period.

With the total average age of the U.S. vehicle fleet set to remain at over 12 years in 2023, demand for automotive replacement parts to keep older vehicles on the road has arguably never been greater. This is what drove AutoZone's same-store sales higher. Paired with a 2.9% rise in the company's total store count to 7,014, this explains how net sales rose at a high-single-digit clip in its fiscal second quarter.

AutoZone's diluted earnings per share (EPS) surged 10.5% over the year-ago period to $24.64. Faster growth in cost of sales (11.1%) than in net sales resulted in a 110-basis-point contraction in net margin to 12.9%. But this dip in profitability was more than offset by an 8.6% reduction in the weighted average diluted share count. As a result, the company's diluted EPS growth exceeded net sales growth.

AutoZone has tons of room for future expansion in the emerging markets of Mexico and Brazil. Along with its significant share buyback program, that's why analysts are forecasting 8.8% annual diluted EPS growth over the next five years. If anything, this estimate could be conservative and the company's growth could outpace the specialty retail industry average earnings growth projection of 9.4%.

A customer shopping for tires.

Image source: Getty Images.

The balance sheet is admirable

With the financial means and proper execution of its strategy already in place, AutoZone's international store presence should multiply in the coming years.

Analysts anticipate that the company's net debt will be approximately $6.7 billion for the current fiscal year. Against the $3.9 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) that is expected, that is a net debt-to-EBITDA ratio of 1.7. And as the company deleverages and EBITDA rises, the net debt-to-EBITDA ratio is forecast to fall to just 1 by 2025.

Quality at a fair price

Despite the surge in AutoZone's share price in the last 12 months, the stock still looks to be an enticing value for growth investors. Its forward price-to-earnings (P/E) ratio of 16.7 represents a slight premium over the specialty retail industry average forward P/E ratio of 15.8. But if any stock has earned the right to a modest premium over its peers, AutoZone has to be near the top of the list. That's why I believe it remains a buy for growth investors over the long run.