Download PDF

1. Company Snapshot

1.a. Company Description

O'Reilly Automotive, Inc., together with its subsidiaries, operates as a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States.The company provides new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting products, and oil and wiper blades; and accessories, including floor mats, seat covers, and truck accessories.Its stores offer auto body paint and related materials, automotive tools, and professional service provider service equipment.


The company's stores also provide enhanced services and programs comprising used oil, oil filter, and battery recycling; battery, wiper, and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; and professional paint shop mixing and related materials.Its stores offer do-it-yourself and professional service provider customers a selection of products for domestic and imported automobiles, vans, and trucks.As of December 31, 2021, the company owned and operated 5,759 stores in the United States, and 25 stores in Mexico.


O'Reilly Automotive, Inc.was founded in 1957 and is headquartered in Springfield, Missouri.

Show Full description

1.b. Last Insights on ORLY

O'Reilly Automotive's recent performance was negatively impacted by concerns over valuation, as some analysts consider the stock overvalued by about 55%. Additionally, despite reporting record revenue and earnings for Q3 2025, the company trimmed its full-year free cash flow guidance due to higher expenses. However, the company's reaccelerating comparable growth and robust profitability in the current tariff landscape alleviated previous concerns. O'Reilly Automotive's solid growth momentum, pricing power, and market share gains have led to a rating upgrade to "buy" from some analysts.

1.c. Company Highlights

2. O'Reilly Automotive's Q3 2025 Earnings: Steady Performance Amidst Inflation

O'Reilly Automotive, Inc. reported a robust third-quarter 2025 earnings, with a 5.6% increase in comparable store sales, driven by a 10% increase in professional business and a low single-digit increase in DIY business. The company's gross margin was 51.9%, up 27 basis points from the third quarter of 2024, and diluted earnings per share increased 12% to $2.83. The company updated its full-year guidance, expecting total revenues to be between $17.6 billion and $17.8 billion.

Publication Date: Oct -24

📋 Highlights
  • Comparable Store Sales Growth: Increased 5.6%, driven by 10% professional business growth and low single-digit DIY sales.
  • Gross Margin Expansion: Improved to 51.9%, up 27 basis points YoY, with diluted EPS rising 12% to $2.83.
  • New Store Openings: 55 net new stores in Q3, on track to open 200–210 stores in 2025, with $900M in first-nine-month capex.
  • Tax Rate Reduction: Effective tax rate of 21.4% for Q3, down from 22.3% guidance, and 21.6% full-year expectation.
  • Inventory and Free Cash Flow: Inventory per store rose 10% YoY to $858K; free cash flow guidance lowered to $1.5–1.8B, down from $1.6–1.9B.

Operational Highlights

The company opened 55 net new stores in the quarter and remains on track to achieve its 2025 new store opening target of 200 to 210 stores. Capital expenditures for the first nine months of 2025 were $900 million, and the company reduced its full-year capital expenditure guidance to $1.1 billion to $1.2 billion. Inventory per store finished the quarter at $858,000, up 10% from the same time last year and up 7% from the end of 2024.

Financial Performance and Guidance

The company's effective tax rate was 21.4% of pretax income, and it expects an effective tax rate of 21.6% for the full year 2025. Free cash flow for the first 9 months of 2025 was $1.2 billion, and the company updated its expected free cash flow guidance to a range of $1.5 billion to $1.8 billion. The company's adjusted debt-to-EBITDA ratio was 2.4x.

Valuation and Growth Prospects

With a P/E Ratio of 33.43 and an EV/EBITDA of 23.5, the market is pricing in a certain level of growth for O'Reilly Automotive. Analysts estimate next year's revenue growth at 6.8%. The company's ROIC is 33.15%, indicating a strong ability to generate returns on invested capital. As the company continues to accelerate its unit growth, with an expected growth rate of over 4% in 2026, it is well-positioned to drive long-term growth.

Inflation and Pricing

The company has seen a 4% same SKU inflation and believes that most of the cost has flowed through to it. O'Reilly Auto Parts is seeing a mix of effects from tariffs and pricing on its business, with some categories experiencing cost pressures while others remain strong. The company expects a mid-single-digit inflation benefit in 4Q, which may be the peak of the inflation contribution.

3. NewsRoom

Card image cap

Here Are Thursday’s Top Wall Street Analyst Research Calls: AutoZone, BXP, Fiserv, Meta Platforms, PayPal, Salesforce, Toast and More

Dec -04

Source:

Card image cap

Boston Family Office LLC Acquires 6,318 Shares of O’Reilly Automotive, Inc. $ORLY

Dec -02

Source: defenseworld.net

Card image cap

1 No-Brainer Stock-Split Stock to Buy Before the End of the Year, and 1 That Investors Would Be Wise to Avoid

Dec -02

Source: fool.com

Card image cap

Benzinga's 'Stock Whisper' Index: 5 Stocks Investors Secretly Monitor But Don't Talk About Yet

Nov -29

Source: feeds.benzinga.com

Card image cap

Alcosta Capital Management Inc. Raises Stock Position in O’Reilly Automotive, Inc. $ORLY

Nov -28

Source: defenseworld.net

Card image cap

Clarkston Capital Partners LLC Raises Stock Position in O’Reilly Automotive, Inc. $ORLY

Nov -28

Source: defenseworld.net

Card image cap

SEC Opens Civil Probe Into Jefferies Over $12B First Brands Collapse

Nov -27

Source: feeds.benzinga.com

Card image cap

Associated Banc Corp Invests $205,000 in O’Reilly Automotive, Inc. $ORLY

Nov -27

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Retail - Auto Parts

Expected Growth: 5.0%

O'Reilly Automotive's 5.0% growth is driven by increasing demand for aftermarket auto parts, expanding market share through strategic acquisitions, and a strong e-commerce platform. A growing vehicle age and mileage also boost demand for replacement parts, while the company's focus on DIY and professional customers supports sales growth.

7. Detailed Products

Automotive Parts

O'Reilly Automotive, Inc. offers a wide range of automotive parts, including brake pads, rotors, batteries, and engine components.

Tools and Equipment

The company sells various tools and equipment, such as air compressors, hydraulic presses, and diagnostic testers.

Accessories

O'Reilly Automotive, Inc. offers a variety of accessories, including floor mats, seat covers, and car audio systems.

Tires and Wheels

The company provides a range of tires and wheels, including passenger and light truck tires, as well as custom wheels.

Fluids and Chemicals

O'Reilly Automotive, Inc. sells various fluids and chemicals, such as motor oil, transmission fluid, and brake fluid.

Battery and Electrical

The company offers a range of battery and electrical products, including batteries, starters, and alternators.

8. O'Reilly Automotive, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

O'Reilly Automotive, Inc. operates in the auto parts industry, offering a wide range of products and services. The threat of substitutes is relatively low as customers typically seek specific parts or services for their vehicles, and O'Reilly's extensive product offerings and knowledgeable staff make it a preferred destination. Moreover, switching costs for customers are relatively high due to the complexity of finding compatible parts elsewhere.

Bargaining Power Of Customers

While O'Reilly Automotive has a large customer base, including professional mechanics and do-it-yourself customers, the bargaining power of customers is moderate. Customers have some ability to negotiate prices or seek better deals, especially with the presence of competitors. However, O'Reilly's strong brand reputation, extensive product selection, and services like professional advice and installation contribute to customer loyalty, somewhat mitigating this bargaining power.

Bargaining Power Of Suppliers

O'Reilly Automotive sources products from a variety of suppliers. While the company likely negotiates with multiple suppliers for similar products, which can somewhat mitigate supplier bargaining power, the auto parts industry can experience fluctuations in demand and supply chain disruptions. This situation gives suppliers some leverage, but O'Reilly's scale and market position allow it to negotiate effectively.

Threat Of New Entrants

The threat of new entrants in the auto parts retail industry is relatively low. High initial investment costs for setting up a comprehensive inventory, establishing a strong distribution network, and building brand recognition act as significant barriers to entry. Additionally, O'Reilly Automotive's long-standing presence, extensive store network, and strong relationships with suppliers further discourage new entrants.

Intensity Of Rivalry

The auto parts retail industry is highly competitive, with several major players, including O'Reilly Automotive, AutoZone, and Advance Auto Parts. The high level of competition is driven by the large and growing market for auto parts, relatively low switching costs for customers, and the presence of multiple players with significant resources. This competitive landscape leads to aggressive pricing strategies, extensive marketing efforts, and continuous improvements in product offerings and services, making the intensity of rivalry high.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 120.93%
Debt Cost 4.28%
Equity Weight -20.93%
Equity Cost 7.59%
WACC 3.58%
Leverage -577.76%

11. Quality Control: O'Reilly Automotive, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Build-A-Bear Workshop

A-Score: 6.1/10

Value: 5.1

Growth: 6.9

Quality: 7.0

Yield: 5.0

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
AutoZone

A-Score: 5.9/10

Value: 3.7

Growth: 7.2

Quality: 6.1

Yield: 0.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

View Full Report
Stock-Card
O'Reilly Automotive

A-Score: 5.8/10

Value: 2.9

Growth: 7.4

Quality: 6.0

Yield: 0.0

Momentum: 8.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
eBay

A-Score: 5.5/10

Value: 3.3

Growth: 6.1

Quality: 6.9

Yield: 3.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
Amazon

A-Score: 5.3/10

Value: 1.8

Growth: 8.8

Quality: 6.9

Yield: 0.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
Tractor Supply

A-Score: 5.0/10

Value: 2.4

Growth: 7.3

Quality: 5.4

Yield: 3.0

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

99.51$

Current Price

99.51$

Potential

-0.00%

Expected Cash-Flows