Stock of the Day

May 9, 2023

O'Reilly Automotive (ORLY)

$88.50
+$1.81 (+2.1%)
Market Cap: $70.13B

About O'Reilly Automotive

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, Puerto Rico, and Mexico. 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. It also offers auto body paint and related materials, automotive tools, and professional service provider service equipment. In addition, the company 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. Further, it offers do-it-yourself and professional service for domestic and imported automobiles, vans, and trucks. The company was founded in 1957 and is headquartered in Springfield, Missouri.

O'Reilly Automotive Bull Case

Here are some ways that investors could benefit from investing in O'Reilly Automotive, Inc.:

  • The stock is currently trading at $86.01, which is significantly below the average analyst price target of $107.235, suggesting substantial upside potential as the consensus rating remains a Moderate Buy.
  • O'Reilly Automotive, Inc. recently reported second-quarter revenue of $4.89 billion, beating analyst expectations of $4.86 billion, with year-over-year revenue growth of 8.1% indicating strong underlying business momentum.
  • The company maintains a low beta of 0.54, meaning its stock price tends to be less volatile than the broader market, which can provide a defensive characteristic for investors during periods of market uncertainty.
  • O'Reilly Automotive, Inc. has guided for full-year 2026 earnings per share between $3.20 and $3.30, a range that aligns with the current analyst consensus estimate of $3.25, reflecting confidence in continued profitability.
  • Institutional interest remains robust, with hedge funds and other institutional investors owning 85.00% of the company's stock, signaling strong long-term confidence in the company's market position.

O'Reilly Automotive Bear Case

Investors should be bearish about investing in O'Reilly Automotive, Inc. for these reasons:

  • The stock is trading at $86.01, which is below its 50-day simple moving average of $87.99 and 200-day simple moving average of $89.36, indicating a recent downward trend in price momentum.
  • Insider selling has been notable recently, with directors and senior executives selling a total of 6,000 shares worth $550,530 in the last three months, which may signal a lack of confidence in near-term stock performance.
  • Short interest has increased to 25,741,427 shares as of September 15, 2026, representing 3.21% of the float, suggesting that a significant portion of investors are betting against the stock's future performance.
  • The company's price-to-earnings ratio of 27.39 is relatively high, which may indicate that the stock is overvalued compared to its earnings growth rate, particularly if future earnings do not meet the high expectations set by analysts.
  • O'Reilly Automotive, Inc. reported a negative return on equity of 232.45% in the most recent quarter, which, while potentially influenced by accounting adjustments, raises concerns about the efficiency of the company in generating profits from shareholder equity.
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