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O'Reilly Auto (ORLY)
NASDAQ:ORLY
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O'Reilly Auto
(NASDAQ:ORLY)72Outperform
Positive Factors
Automation and Efficiency
O'Reilly Auto's new distribution center outside Atlanta includes automation technologies, enhancing productivity in a traditionally labor-intensive model.
Expansion and Growth
Management is planning to open between 200 and 210 new stores in 2025, including about 25 in Mexico, which indicates growth and expansion.
Negative Factors
Profitability Concerns
Self-insurance costs are rising for the company’s delivery fleet, which could impact future profitability.
O'Reilly Auto (ORLY) vs. S&P 500 (SPY)
Market Cap
$77.71B
Dividend YieldN/A
Average Volume (3M)357.17K
Price to Earnings (P/E)33.4
Beta (1Y)0.37
Revenue Growth5.67%
EPS Growth5.40%
CountryUS
Employees90,302
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)40.66
Shares Outstanding57,272,440
10 Day Avg. Volume359,131
30 Day Avg. Volume357,172
Financial Highlights & Ratios
PEG Ratio6.18
Price to Book (P/B)N/A
Price to Sales (P/S)4.72
Price to Cash Flow (P/CF)31.60
P/FCF Ratio29.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1,430.88Price Target Upside5.46% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
O'Reilly Auto Business Overview & Revenue Model
Company DescriptionFounded in 1957 and headquartered in Missouri, O'Reilly Automotive, Inc. is a retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States. The company is engaged in the distribution and retailing of automotive aftermarket parts, tools, supplies, equipment, and accessories in the U.S., serving both professional installers and do-it-yourself customers.
How the Company Makes MoneyO'Reilly Auto Parts generates revenue primarily through the sale of automotive parts and accessories. The company operates a dual market strategy, targeting both professional service providers and do-it-yourself customers, which allows it to capture a broad market segment. Revenue streams include sales from its extensive inventory of automotive parts, maintenance items like batteries and fluids, and a variety of accessories. The company benefits from significant economies of scale, enabling competitive pricing and a wide distribution network. O'Reilly also focuses on strategic partnerships with suppliers to ensure a steady supply of quality products, which contributes to its sustained earnings. Additionally, the company's loyalty programs and marketing initiatives help drive repeat customer business, further bolstering its revenue.
O'Reilly Auto Financial Statement Overview
Summary
O'Reilly Auto demonstrates strong financial performance with consistent revenue and profit growth, supported by robust cash flows. High profitability margins indicate operational efficiency. However, high leverage and negative equity pose potential financial risks, necessitating improvements in equity structure and debt management.Income Statement
O'Reilly Auto has demonstrated consistent revenue growth over the years, with a notable increase from $10.15 billion in 2019 to $16.71 billion in 2024. The gross profit margin is strong at 51.2% for 2024, reflecting efficient cost management. Net profit margin stands at 14.28% for 2024, indicating solid profitability. The EBIT and EBITDA margins are robust, both at 19.45% for 2024, showcasing operational efficiency. Overall, the company exhibits strong financial performance with stable growth and profitability.88
Very Positive
Balance Sheet
O'Reilly Auto's balance sheet shows a concerning negative stockholders' equity of $1.37 billion in 2024, primarily due to high total debt of $7.92 billion. The debt-to-equity ratio is not meaningful due to negative equity. Despite this, the return on equity is impressive at -174.11%, driven by substantial net income. The equity ratio is negative, highlighting the need for improved equity management. While the company's profitability is strong, the high leverage poses financial risk.65
Positive
Cash Flow
The company exhibits healthy operating cash flows, reaching $3.05 billion in 2024, indicating strong cash generation capability. The free cash flow is solid at $2.03 billion for 2024, with a stable growth rate over the years. The operating cash flow to net income ratio is 1.28, reflecting efficient conversion of income to cash. The free cash flow to net income ratio is 0.85, suggesting effective cash management despite high capital expenditures. Overall, the cash flow position is strong, supporting ongoing operations and investments.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 16.71B | 15.81B | 14.41B | 13.33B | 11.60B | Gross Profit |
| 8.55B | 7.70B | 7.38B | 7.02B | 6.09B | EBIT |
| 3.25B | 3.19B | 2.95B | 2.92B | 2.42B | EBITDA |
| 3.25B | 3.60B | 3.31B | 3.25B | 2.74B | Net Income Common Stockholders |
| 2.39B | 2.35B | 2.17B | 2.16B | 1.75B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 130.25M | 279.13M | 108.58M | 362.11M | 465.64M | Total Assets |
| 14.89B | 14.60B | 12.63B | 11.72B | 11.60B | Total Debt |
| 7.92B | 7.84B | 6.55B | 5.87B | 6.16B | Net Debt |
| 7.79B | 7.56B | 6.44B | 5.50B | 5.70B | Total Liabilities |
| 16.26B | 16.34B | 13.69B | 11.79B | 11.46B | Stockholders Equity |
| -1.37B | -1.74B | -1.06B | -66.42M | 140.26M |
| Cash Flow | Free Cash Flow | |||
| 2.03B | 2.03B | 2.58B | 2.76B | 2.37B | Operating Cash Flow |
| 3.05B | 3.03B | 3.15B | 3.21B | 2.84B | Investing Cash Flow |
| -1.17B | -995.94M | -739.99M | -615.62M | -614.89M | Financing Cash Flow |
| -2.03B | -1.87B | -2.66B | -2.69B | -1.80B |
O'Reilly Auto Technical Analysis
Positive
1356.77
Price Trends
1269.45
Positive
1242.49
Positive
1158.87
Positive
Market Momentum
23.56
Negative
61.08
Neutral
83.27
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORLY, the sentiment is Positive. The current price of 1356.77 is above the 20-day moving average (MA) of 1330.09, above the 50-day MA of 1269.45, and above the 200-day MA of 1158.87, indicating a bullish trend. The MACD of 23.56 indicates Negative momentum. The RSI at 61.08 is Neutral, neither overbought nor oversold. The STOCH value of 83.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ORLY.
O'Reilly Auto Risk Analysis
O'Reilly Auto disclosed 16 risk factors in its most recent earnings report. O'Reilly Auto reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
O'Reilly Auto Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $77.71B | 33.37 | -174.09% | ― | 5.67% | 5.40% | |
71 Outperform | $58.30B | 23.21 | -14.95% | ― | 5.19% | 8.31% | |
71 Outperform | $10.91B | 16.09 | 11.38% | 2.86% | 3.53% | -25.71% | |
67 Neutral | $17.05B | 18.98 | 20.84% | 3.23% | 1.71% | -30.78% | |
62 Neutral | $6.15B | 18.70 | 6.11% | 1.53% | -11.10% | -46.32% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
45 Neutral | $2.07B | 59.62 | -15.47% | 2.82% | -9.34% | -852.37% |
* Consumer Cyclical Sector Average
Performance Comparison
ORLY
O'Reilly Auto
1,356.77
275.12
25.44%
AAP
Advance Auto Parts
34.58
-35.93
-50.96%
AZO
AutoZone
3,473.66
369.46
11.90%
BWA
BorgWarner
29.19
-2.33
-7.39%
GPC
Genuine Parts Company
122.87
-23.65
-16.14%
LKQ
LKQ
42.08
-8.01
-15.99%
O'Reilly Auto Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: 0.63% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment with O'Reilly achieving record earnings and market share gains amidst challenging economic conditions and headwinds from insurance adjustments. Despite solid fourth-quarter sales growth and strategic investments, the overall sales fell below initial expectations, and there is cautious outlook for 2025.Highlights
Record Earnings Despite EPS Headwind
O'Reilly Auto Parts delivered record earnings in 2024 despite a $0.46 headwind to EPS from a $35 million charge. This represents a 1% headwind to the full-year EPS growth.
Fourth Quarter Comparable Store Sales Growth
Comparable store sales for the fourth quarter grew by 4.4%, driven by solid results in both professional and DIY sectors.
Strong Maintenance Category Performance
Continued strong demand in maintenance categories and winter weather-related categories, benefiting from easier comparisons to mild weather in the previous year.
Investment in Distribution and Expansion
Capital expenditures in 2024 exceeded $1 billion, with plans for 2025 to include further investment in store, hub, and distribution expansion.
Market Share Gains
O'Reilly continues to gain market share in a challenging environment, with expectations for further growth in their professional business in 2025.
Lowlights
Full-Year Sales Below Expectations
The sales growth in 2024 was at the high end of revised guidance but below the initial guidance range set at the beginning of the year.
EPS Impact from Self-Insurance Charge
A significant $35 million charge was recorded in the fourth quarter to adjust reserves for historic auto liability claims, impacting the EPS growth.
Continued Pressure on Discretionary Categories
There was continued softness in discretionary categories such as tools, accessories, and performance parts.
Challenging Start to 2025
The company remains cautious about 2025 due to potential short-term economic shocks, including consumer pressure from high prices and other economic factors.
Reduced Free Cash Flow Expectation
Free cash flow for 2025 is expected to decrease to a range of $1.6 billion to $1.9 billion, down from $2 billion in 2024.
Company Guidance
During the O'Reilly Automotive, Inc. earnings call, several key metrics and guidance for 2025 were discussed. The company reported a 2.9% increase in comparable store sales and a 5.7% increase in diluted earnings per share for 2024, despite facing industry headwinds and a significant $35 million charge to adjust auto claims self-insurance liabilities. For the fourth quarter, comparable store sales grew 4.4%, driven by balanced performance in both professional and DIY sectors. Looking ahead to 2025, O'Reilly provided a comparable store sales guidance range of 2% to 4%, with expectations for continued market share gains amidst challenging macroeconomic conditions. The company also plans to invest $1.2 billion in capital expenditures, focusing on store and distribution expansion, including 200 to 210 net new store openings. Additionally, O'Reilly aims for a gross margin range of 51.2% to 51.7% and an operating profit range of 19.2% to 19.7% for the year. The effective tax rate is expected to be 22.6%, and free cash flow is projected to be between $1.6 billion and $1.9 billion.O'Reilly Auto Corporate Events
Financial Disclosures
O’Reilly Auto Sets 2024 Earnings Release Dates
Neutral
Jan 2, 2025
O’Reilly Automotive, Inc. has announced the dates for its fourth quarter and full-year 2024 earnings release and conference call. The earnings report will be released on February 5, 2025, and a conference call will follow on February 6, 2025, allowing investors and analysts to discuss the company’s financial performance. This announcement is a key event for stakeholders to gain insights into O’Reilly’s financial health and operational progress.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.