O'Reilly Automotive, Inc. (ORLY)
NEUTRALFundamental
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
Parts and accessories sold over the counter to individual customers repairing their own vehicles.
Parts sold and delivered to professional repair shops and service technicians, O'Reilly's fastest-growing customer group.
Competitive moat
Scale · NarrowA 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
DefensiveCars 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
Fair Value
$76.76
Current Price
$90.44
Margin of Safety
-17.8%
Fair Value Range
$50.16 - $103.35
Estimation Methods
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
Strong financial health
Earnings Quality
High quality: earnings backed by cash
Share Dilution
Buying back shares. Shareholder friendly
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Gregory L. Henslee | Executive Chairman | 64 |
| Mr. Brad W. Beckham | Chief Executive Officer | 46 |
| Mr. David E. O'Reilly | Executive Vice Chairman | 75 |
| Mr. Brent G. Kirby | President | 56 |
| Mr. Jeremy Adam Fletcher CPA | Executive VP & CFO | 47 |
| Mr. Scott Richard Ross | Executive VP & Chief Information Officer | 59 |
| Mr. Jason Lee Tarrant | Executive Vice President of Store Operations & Sales | 44 |
| Ms. Tamara F. Conn | Senior VP of Legal & General Counsel | 54 |
| Ms. Shari Lynne Reaves | Senior Vice President of Human Resources & Training | 54 |
| Mr. Robert Allen Dumas | Senior Vice President of Eastern Store Operations & Sales | 51 |
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.
- 3/5/2026POSITIVECan 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