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O'Reilly Automotive, Inc. (ORLY)

NEUTRAL
Consumer CyclicalAuto PartsUnited States

Fundamental

73

Price

$90.44

Market Cap

$73.36B

Part 1 · What the company is worth

Overview

O'Reilly Automotive sells replacement auto parts, tools, supplies and accessories through a large chain of retail stores backed by its own distribution network. It serves two very different customers with the same stores: everyday drivers fixing their own cars, and professional repair shops that need a part delivered within the hour to finish a job. Owning the distribution chain rather than relying on outside wholesalers is what lets it promise that speed.

How it makes money

Revenue is booked at the point of sale, whether over the counter to a walk-in customer or delivered to a professional repair shop's account. The DIY and professional halves of the business are roughly equal in size but behave differently: DIY sales follow store traffic and weather-driven repair needs, while professional sales depend on account relationships and, above all, on how fast O'Reilly can get the right part to a shop, which is what its hub-and-distribution-center network is built to deliver.

Revenue by segment

DIY Retail50%

Parts and accessories sold over the counter to individual customers repairing their own vehicles.

Professional Service Provider50%

Parts sold and delivered to professional repair shops and service technicians, O'Reilly's fastest-growing customer group.

Competitive moat

Scale · Narrow

A dense network of stores layered on regional distribution centers lets O'Reilly promise same-day or next-day parts availability that a small independent parts store cannot match, and that scale is expensive and slow for a new entrant to replicate. The advantage is real but not exclusive: a handful of comparably sized national chains run the same playbook, so no single player owns a durable edge.

What drives demand

Defensive

Cars break down regardless of the economy, and an aging vehicle fleet on the road tends to need more parts over time, which makes demand fairly resistant to downturns; some drivers even shift from buying a new car to repairing an older one when money is tight, which can help O'Reilly. Store growth and comparable sales still track broader consumer spending at the margin.

Key risks

  • Macroeconomic sensitivity of customers — The company cites inflation, consumer debt levels and general economic conditions as risks: deteriorating conditions can reduce product demand, limit customer and supplier access to credit, and cause financial hardship across the business.
  • Tariffs and trade policy — O'Reilly relies in part on imported parts, and new or increased tariffs raise costs and require further diversification of its supply chain, a process the company itself describes as ongoing rather than complete.
  • Intense competition in a fragmented market — The automotive aftermarket remains highly fragmented, and O'Reilly competes against comparably resourced national retailers as well as many independent and online sellers, limiting its pricing power.
  • Capital-intensive expansion — Growth depends on continuing to open new stores and expand the distribution network at a steady pace, which requires ongoing capital spending and execution; a slowdown in store openings would directly slow revenue growth.

The case for

Buyers argue that O'Reilly's distribution density gives it a durable speed advantage with professional customers, that an aging US vehicle fleet supports steady parts demand regardless of new-car sales, and that a long track record of disciplined store expansion and share buybacks has compounded returns for shareholders for decades.

The case against

Sellers fear that O'Reilly competes against equally well-capitalized national rivals with no clear way to widen the gap, that tariffs on imported parts squeeze margins the company cannot fully offset with price increases, and that continued growth increasingly depends on opening stores in markets it knows less well, including outside the United States.

Written by the editors, published on August 18, 2026

Direct competitors

Who this company fights with for the same customers

No editorial profile for this company yet

No competitor list for this company yet.

Balance Sheet & Liquidity

Revenue

$18.57B

Trailing 12 months (through 6/30/2026)

Net Income

$2.65B

Trailing 12 months (through 6/30/2026)

Free Cash Flow

$1.59B

Total Equity

$-763M

Total Liabilities

$17.30B

Current Ratio

0.75

Interest Coverage

14.37

Debt/EBITDA

2.41

Earnings Per Share

Revenue & Net Income

Free Cash Flow

Income Breakdown

Historical statement

Margins over time

Debt over time

How heavy the debt is

Growth grid

Growth — Revenue

Fair Value Estimation

Fairly Valued

Fair Value

$76.76

Current Price

$90.44

Margin of Safety

-17.8%

Fair Value Range

$50.16 - $103.35

Estimation Methods

Analyst Target:$107.80
DCF:$61.85
PE-based:$79.15
Graham Growth:$23.56
EPV:$43.28
Analyst Consensus:Strong Buy (29B / 7H / 0S)
Last Earnings Surprise:-2.25%

Valuation Metrics

P/E Ratio

28.79

ROE

-332.5%

P/B Ratio

-

P/FCF

34.02

Gross Margin

51.6%

ROIC

36.7%

Profitability Radar

Value Creation (Economic Moat)

ROIC

36.7%

WACC

7.3%

ROIC − WACC

+29.4 pp

ROIC exceeds the cost of capital — the company is creating value for shareholders.

Fundamental Analysis Criteria

Passed (18)

  • EPS shows upward trend
  • Price CAGR 16.99%
  • ROIC 36.7%
  • Gross Margin 51.6%
  • Operating Margin 19.6%
  • Positive Free Cash Flow
  • Current Ratio
  • Interest Coverage
  • Debt/EBITDA
  • Return on Tangible Assets
  • Low reliance on intangibles
  • ROE 423.4%
  • Revenue Growth 5Y 8.9%
  • Analyst Consensus 81% Buy
  • Earnings Quality (OCF/NI) 1.24
  • Share Dilution -3.0%
  • Net Margin Trend 14.3% vs 14.2%
  • Piotroski F-Score 7/9

Failed (5)

  • EPS CAGR 4.18%
  • P/FCF 34.02
  • CapEx intensity
  • DCF valuation (Overvalued)
  • Earnings Surprise avg -1.1%

Unavailable (5)

  • P/B Ratio NaN
  • Dividend Payout NaN%
  • Debt/Equity ratio
  • Price below Graham Number
  • PEG Ratio (need PE > 0 and growth > 0)

Piotroski F-Score

7/9

Strong financial health

score
criteria

Earnings Quality

1.24

High quality: earnings backed by cash

Share Dilution

-3.0%

Buying back shares. Shareholder friendly

Governance

Executive Team

NameTitleAge
Mr. Gregory L. HensleeExecutive Chairman64
Mr. Brad W. BeckhamChief Executive Officer46
Mr. David E. O'ReillyExecutive Vice Chairman75
Mr. Brent G. KirbyPresident56
Mr. Jeremy Adam Fletcher CPAExecutive VP & CFO47
Mr. Scott Richard RossExecutive VP & Chief Information Officer59
Mr. Jason Lee TarrantExecutive Vice President of Store Operations & Sales44
Ms. Tamara F. ConnSenior VP of Legal & General Counsel54
Ms. Shari Lynne ReavesSenior Vice President of Human Resources & Training54
Mr. Robert Allen DumasSenior Vice President of Eastern Store Operations & Sales51

Audit Risk

10

Board Risk

8

Compensation Risk

8

Shareholder Rights Risk

7

Part 2 · The price and when to enter

This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.

Latest News

Recent headlines for ORLY, sourced from Markets Gazette.

  • 3/5/2026POSITIVE
    Can O'Reilly Automotive Stock Beat the Market?

    O'Reilly Automotive Inc. (ORLY) has demonstrated exceptional performance over the past five years, with its shares more than tripling in value. This positive trend indicates strong growth and solid business management within the auto parts retail sector. For investors, this suggests a potential continuation of the upward trajectory, supported by consistent demand for vehicle maintenance and repair, making the stock an attractive candidate for a growth-oriented portfolio.

via Markets Gazette