O'Reilly Automotive is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional service provider markets. The company was founded in 1957 and is based in Springfield, Missouri.
ORLY Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for O Reilly Automotive Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that O Reilly Automotive Inc ranked in the 47th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for O Reilly Automotive Inc ended up being:
ORLY's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 25.86% of tickers in our DCF set.
Relative to other stocks in its sector (Consumer Cyclical), O Reilly Automotive Inc has a reliance on debt greater than just 18.28% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Cyclical that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as ORLY, try LCII, BWA, MYE, SGA, and UONE.
(Pexels) Of all the companies I've research, AutoZone (AZO) is among the most stable. The auto parts company has nearly constant margins, constant leverage, and almost always trades at the same valuation. This has made it very attractive to many investors, particularly with its slow but steady revenue growth over...
Harrison Schwartz on Seeking Alpha | September 18, 2020
The auto parts retailers have been hot for a long time. None have been hotter than O’Reilly (ORLY), which has proven time and again it is the best of the group that also includes Advance Auto Parts (AAP) and AutoZone (AZO), as well as conglomerate Genuine Parts (GPC). O’Reilly has...
O'Reilly Automotive broke out on the upside Thursday on the heels of their earnings beat. In this daily bar chart of ORLY, below, we can see that prices made a "V" bottom in late March followed by a very brief retest before prices raced higher. Prices rallied up into June and then traded sideways for a few weeks before their recent upside breakout to new highs.
At this time, I'd like to introduce Greg Johnson. Participating on the call with me this morning are Jeff Shaw, our Chief Operating Officer and Co-President and Tom McFall, our Chief Financial Officer.
O'Reilly Automotive (NASDAQ: ORLY) posted a 7.24% decrease in earnings from Q1. Sales, however, increased by 24.88% over the previous quarter to $3.09 billion. Despite the increase in sales this quarter, the decrease in earnings may suggest O'Reilly Automotive is not utilizing their capital as effectively as possible. O'Reilly Automotive earned $409.31 million and $2.48 billion in sales in Q1.What Is Return On Capital Employed? Changes in earnings and sales indicate shifts in O'Reilly Automotive's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed in a business. Generally, a higher ROCE suggests successful growth in a company and is a sign of higher earnings per share for shareholders in the future. In Q2, O'Reilly Automot...