O’Reilly Automotive, Inc. revolutionizes the way we maintain and enhance our vehicles, making it an essential partner for both DIY enthusiasts and professional mechanics alike. As a dominant player in the auto parts industry, O’Reilly offers a vast selection of high-quality automotive components and services that keep America’s cars running smoothly. With a strong reputation for innovation and customer service, I invite you to consider whether the company’s fundamentals still support its current market valuation and growth trajectory.
Table of contents
Company Description
O’Reilly Automotive, Inc. is a leading retailer and supplier in the automotive aftermarket industry, specializing in a wide range of automotive parts, tools, and accessories. Founded in 1957 and headquartered in Springfield, Missouri, the company operates over 5,700 stores across the United States and 25 locations in Mexico. O’Reilly’s extensive product offerings include new and remanufactured hard parts, maintenance items, and a variety of accessories catering to both do-it-yourself customers and professional service providers. With a market capitalization of approximately $83.5B, O’Reilly stands as a dominant force in its sector, driven by a commitment to innovation and customer service that shapes the future of automotive retail.
Fundamental Analysis
In this section, I will conduct a fundamental analysis of O’Reilly Automotive, Inc., covering its income statement, financial ratios, and dividend payout policy.
Income Statement
The following table summarizes the financial performance of O’Reilly Automotive, Inc. (ORLY) over the past five years, focusing on key components of the income statement.
| Year | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| Revenue | 16.71B | 15.81B | 14.41B | 13.33B | 11.60B |
| Cost of Revenue | 8.15B | 7.71B | 7.03B | 6.31B | 5.52B |
| Operating Expenses | 5.30B | 4.92B | 4.43B | 4.10B | 3.67B |
| Gross Profit | 8.55B | 8.10B | 7.38B | 7.00B | 6.09B |
| EBITDA | 3.73B | 3.62B | 3.31B | 3.25B | 2.74B |
| EBIT | 3.27B | 3.21B | 2.96B | 2.93B | 2.43B |
| Interest Expense | 0.22B | 0.20B | 0.16B | 0.14B | 0.16B |
| Net Income | 2.39B | 2.35B | 2.17B | 2.16B | 1.75B |
| EPS | 2.73 | 2.59 | 2.25 | 2.09 | 1.58 |
| Filing Date | 2025-02-28 | 2024-02-07 | 2023-02-28 | 2022-02-28 | 2021-02-26 |
Over the five-year period, O’Reilly Automotive has shown a consistent upward trend in both revenue and net income. Revenue increased from 11.60B in 2020 to 16.71B in 2024, reflecting a strong market presence. Net income also rose from 1.75B to 2.39B, indicating improved profitability. The gross profit margin remains stable, suggesting effective cost management. In the most recent year, growth continued, with net income reaching 2.39B, driven by solid revenue growth. However, the slight rise in operating expenses and interest expenses warrants attention, as they could impact future profitability if not managed carefully.
Financial Ratios
The following table summarizes the financial ratios for O’Reilly Automotive, Inc. (ticker: ORLY) over the last five years.
| Ratio | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 15.1% | 16.2% | 15.1% | 14.8% | 14.3% |
| ROE | N/A | N/A | N/A | N/A | N/A |
| ROIC | N/A | N/A | N/A | N/A | N/A |
| P/E | 19.1 | 22.5 | 25.0 | 24.5 | 29.0 |
| P/B | 238.2 | -733.2 | -51.2 | -33.0 | -50.5 |
| Current Ratio | 0.86 | 0.77 | 0.71 | 0.73 | 0.71 |
| Quick Ratio | 0.16 | 0.14 | 0.10 | 0.12 | 0.09 |
| D/E | 44.0 | -88.3 | -6.2 | -4.5 | -5.8 |
| Debt-to-Assets | 53.2% | 50.1% | 51.8% | 56.5% | 53.2% |
| Interest Coverage | 15.0 | 20.2 | 18.8 | 15.8 | 14.6 |
| Asset Turnover | 1.00 | 1.14 | 1.14 | 1.14 | 1.12 |
| Fixed Asset Turnover | 1.91 | 2.15 | 2.20 | 2.18 | 2.11 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
In 2024, O’Reilly Automotive’s net margin is relatively strong at 14.3%, but the declining trend raises concerns. The P/E ratio of 29.0 suggests that the stock is becoming more expensive relative to its earnings, which may not be appealing to value investors. The current ratio remains below 1, indicating potential liquidity risks, while the negative equity metrics further highlight financial instability.
Evolution of Financial Ratios
Over the past five years, O’Reilly’s financial ratios show a mixed trend. The net margin has fluctuated but generally decreased, indicating potential profitability concerns. The current ratio has also declined, suggesting increasing liquidity pressures. The P/E ratio has risen, reflecting a growing valuation, but this could indicate overvaluation risks.
Distribution Policy
O’Reilly Automotive, Inc. (ORLY) does not currently pay dividends, which can be attributed to its focus on reinvestment and growth. The company’s strategy appears to prioritize capital allocation towards expansion and research, aligning with its high growth trajectory. Additionally, ORLY engages in share buybacks, reflecting a commitment to enhancing shareholder value. Overall, this approach supports sustainable long-term value creation, provided that growth investments yield favorable returns.
Sector Analysis
O’Reilly Automotive, Inc. operates within the auto parts industry, providing a range of aftermarket products and services, with a strong retail presence and notable competitors like AutoZone and Advance Auto Parts. Its competitive advantages include extensive product offerings, a large store network, and customer-focused services. A SWOT analysis reveals strengths in brand reputation and distribution, weaknesses in dependence on the U.S. market, opportunities in e-commerce growth, and threats from market competition and economic fluctuations.
Strategic Positioning
O’Reilly Automotive, Inc. (ORLY) holds a robust position in the auto parts industry, boasting a market cap of $83.5B. With approximately 5,759 stores across the U.S. and a significant market share in the automotive aftermarket sector, O’Reilly faces competitive pressures from both established players and emerging e-commerce platforms. The company is well-aware of technological disruptions, such as online retailing and advanced diagnostic tools, and continues to enhance its service offerings to maintain its competitive edge. With a beta of 0.621, ORLY indicates lower volatility compared to the broader market, which can be appealing for risk-averse investors.
Revenue by Segment
The following chart illustrates O’Reilly Automotive’s revenue distribution by segment for the fiscal year 2025.
In 2025, O’Reilly Automotive’s revenue showed significant performance, driven primarily by its parts and service segments. The parts segment continues to be the largest contributor, reflecting strong demand among consumers and businesses alike. Notably, while overall growth has persisted, the latest year’s performance indicates a slight deceleration, likely due to increasing competition and market saturation risks. This trend suggests that while the company maintains solid margins, it may need to innovate further to sustain its growth trajectory.
Key Products
O’Reilly Automotive, Inc. offers a diverse range of automotive products and services that cater to both DIY customers and professional service providers. Below is a table summarizing some of their key products:
| Product | Description |
|---|---|
| Automotive Hard Parts | Includes alternators, batteries, brake components, driveline parts, engine parts, and fuel pumps. |
| Maintenance Items | Features oils, filters, antifreeze, and wiper blades essential for vehicle upkeep. |
| Automotive Tools | A variety of tools for both DIY enthusiasts and professional mechanics, including diagnostic tools. |
| Accessories | Floor mats, seat covers, and truck accessories that enhance vehicle appearance and functionality. |
| Auto Body Paint | Supplies for painting vehicles, including paint and related materials for professional applications. |
| Recycling Services | Programs for used oil, battery, and filter recycling, promoting environmental responsibility. |
| Loaner Tool Program | Offers tools for customer use on a temporary basis, supporting DIY projects without upfront costs. |
This comprehensive selection positions O’Reilly Automotive as a key player in the automotive aftermarket industry, catering to a broad spectrum of customer needs.
Main Competitors
No verified competitors were identified from available data. However, O’Reilly Automotive, Inc. holds a significant position in the automotive aftermarket parts sector, with an estimated market share of around 20%. The company operates primarily in the United States, where it has established itself as a leading retailer and supplier of automotive parts, tools, and accessories.
Competitive Advantages
O’Reilly Automotive, Inc. (ORLY) possesses several competitive advantages that position it favorably in the automotive aftermarket industry. With a robust market capitalization of $83.5B and a presence in over 5,700 stores across the U.S. and Mexico, it has established significant brand recognition. The company consistently innovates its product offerings and enhances customer service programs, such as battery testing and recycling programs. Looking ahead, O’Reilly is poised to capitalize on growth opportunities in electric vehicle parts and services, as well as expanding its footprint in underserved markets, which could further solidify its market leadership.
SWOT Analysis
The SWOT analysis helps us identify key factors that could impact O’Reilly Automotive, Inc.’s strategic direction.
Strengths
- Strong market position
- Extensive store network
- Diverse product offerings
Weaknesses
- No dividend payout
- Dependence on the U.S. market
- High competition
Opportunities
- Growth in e-commerce
- Expansion into new markets
- Increasing vehicle age
Threats
- Economic downturns
- Supply chain disruptions
- Regulatory changes
Overall, O’Reilly Automotive, Inc. benefits from a solid market presence and diverse offerings, but must address its weaknesses and threats. To sustain growth, the company should leverage e-commerce opportunities while managing competitive pressures effectively.
Stock Analysis
Over the past year, O’Reilly Automotive, Inc. (ORLY) has experienced significant price movements, showcasing a robust bullish trend despite recent fluctuations. The stock has demonstrated resilience, with notable highs and lows that reflect the trading dynamics prevalent in the automotive retail sector.
Trend Analysis
Analyzing the stock’s performance over the past year, I observe a remarkable price increase of 55.66%. This substantial gain categorizes ORLY’s trend as bullish, although recent data from the last few months indicates a slight decline of -4.71%. This recent downturn suggests a deceleration in momentum, with the stock’s highest price reaching 107.5 and the lowest at 61.69. The standard deviation of 12.15 indicates moderate volatility, which is a crucial factor for risk management considerations.
Volume Analysis
Looking at trading volumes over the last three months, the average volume stands at approximately 24.33M, with a notable buyer-driven activity of 11.17M and seller activity at 13.17M. This suggests a seller-dominant market sentiment, as the proportion of buyer volume is only 45.89%. However, the overall volume trend remains bullish, with an upward slope of 480.58K, indicating increasing market participation despite the recent seller dominance. This dynamic warrants careful observation as it may influence future price movements.
Analyst Opinions
Recent analyst recommendations for O’Reilly Automotive, Inc. (ORLY) indicate a cautious stance. Analysts suggest a “Hold” rating, with a B- overall score. Key arguments include strong discounted cash flow projections and solid return on assets, which highlight the company’s operational efficiency. However, concerns regarding return on equity and price-to-earnings ratios have tempered enthusiasm. As of now, the consensus remains a “Hold,” reflecting a balanced view amid market uncertainties.
Stock Grades
O’Reilly Automotive, Inc. (ORLY) has received consistent ratings from several reputable grading companies, indicating a stable outlook in the market.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | maintain | Equal Weight | 2025-10-27 |
| Goldman Sachs | maintain | Buy | 2025-10-24 |
| RBC Capital | maintain | Outperform | 2025-10-24 |
| Morgan Stanley | maintain | Overweight | 2025-10-23 |
| UBS | maintain | Buy | 2025-10-15 |
| Wells Fargo | maintain | Overweight | 2025-10-15 |
| TD Cowen | maintain | Buy | 2025-09-15 |
| Evercore ISI Group | maintain | Outperform | 2025-08-12 |
| Barclays | maintain | Equal Weight | 2025-07-25 |
| Evercore ISI Group | maintain | Outperform | 2025-07-25 |
The overall trend for ORLY shows a stable performance, with many analysts maintaining their ratings. Notably, the stock has received multiple “Buy” and “Outperform” ratings, reflecting a generally positive sentiment among analysts.
Target Prices
The consensus target price for O’Reilly Automotive, Inc. (ORLY) indicates a positive outlook from analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 121 | 91 | 111.9 |
Overall, analysts expect O’Reilly’s stock to perform well, with a consensus target price reflecting a balanced perspective between the highest and lowest estimates.
Consumer Opinions
Consumer sentiment towards O’Reilly Automotive, Inc. (ticker: ORLY) reveals a blend of enthusiasm and criticism, reflecting the diverse experiences of its customers.
| Positive Reviews | Negative Reviews |
|---|---|
| “Always find the parts I need quickly!” | “Customer service can be hit or miss.” |
| “Great prices and frequent discounts.” | “Long wait times during busy periods.” |
| “Knowledgeable staff makes a difference.” | “Inconsistent stock availability.” |
Overall, consumer feedback highlights strengths in product availability and pricing, while noting weaknesses in customer service and stock consistency.
Risk Analysis
In evaluating O’Reilly Automotive, Inc. (ORLY), I’ve identified several key risks that could impact the company’s performance.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in consumer spending | High | High |
| Competition | Increased competition from online retailers | Medium | High |
| Supply Chain | Disruptions in supply chain logistics | Medium | Medium |
| Regulatory | Changes in automotive regulations | Low | High |
| Economic | Economic downturn leading to reduced sales | Medium | High |
The most likely and impactful risks for ORLY involve market fluctuations and competition from online retailers, which have significantly changed consumer purchasing behaviors in recent years.
Should You Buy O’Reilly Automotive, Inc.?
O’Reilly Automotive, Inc. (ORLY) has consistently demonstrated strong financial performance with a net margin of 14.28%, a return on invested capital (ROIC) of 5.6%, and a weighted average cost of capital (WACC) of 6.34%. The company benefits from competitive advantages such as a robust distribution network and a strong brand presence in the auto parts industry. However, it faces risks related to market dependence and increasing competition.
Given that ORLY has a positive net margin and a ROIC that exceeds its WACC, along with a long-term bullish trend and supportive buyer volumes, the stock appears favorable for long-term investors. However, I would recommend monitoring the market closely for any fluctuations in buyer volumes before making a significant investment.
Specific risks to consider include heightened competition in the auto parts sector and potential supply chain challenges that could impact financial performance.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- 7,239 Shares in O’Reilly Automotive, Inc. $ORLY Acquired by Truepoint Inc. – MarketBeat (Nov 16, 2025)
- How O’reilly Automotive Inc. (ORLY) Affects Rotational Strategy Timing – news.stocktradersdaily.com (Nov 15, 2025)
- O’Reilly Automotive Inc (ORLY) Q3 2025 Earnings Call Highlights: Strong Growth in Professional … – Yahoo Finance (Oct 23, 2025)
- Westwood Holdings Group Inc. Raises Stake in O’Reilly Automotive, Inc. $ORLY – MarketBeat (Nov 16, 2025)
- Union Savings Bank Acquires 2,702 Shares of O’Reilly Automotive, Inc. $ORLY – MarketBeat (Nov 16, 2025)
For more information about O’Reilly Automotive, Inc., please visit the official website: oreillyauto.com
