O'Reilly Auto Parts
ORLY
$89.08
-2.32%
O'Reilly Automotive, Inc. is a leading specialty retailer of automotive aftermarket parts, tools, supplies, equipment, and accessories, operating nearly 6,600 stores across the U.S., Puerto Rico, Mexico, and Canada. The company serves both do-it-yourself (DIY) and professional customers, with a balanced revenue mix of approximately 49% from each segment, positioning it as a dominant player in the fragmented auto parts industry. Currently, the stock is in focus due to robust sales growth and market share gains, but investors are weighing short-term margin pressures and the potential acquisition of Genuine Parts' Napa distribution business, which could reshape the competitive landscape. The narrative centers on whether O'Reilly can sustain its growth trajectory while navigating industry consolidation and evolving consumer demand.…
ORLY
O'Reilly Auto Parts
$89.08
Related headlines
Investment Opinion: Should I buy ORLY Today?
We rate O'Reilly as a Buy, given its strong revenue growth, high gross margins, and positive analyst sentiment. The consensus recommendation is 'Buy' with an average target price of $108.17, implying 18.8% upside. The thesis is that O'Reilly's market share gains and potential Napa acquisition will drive earnings growth, justifying the premium valuation.
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ORLY 12-Month Price Forecast
The AI assessment leans bullish, driven by strong revenue growth and high gross margins, which indicate a competitive advantage. The potential Napa acquisition could be a significant catalyst, but the high valuation and margin pressures warrant caution. If margins stabilize and the acquisition proceeds, the stock has upside to $108; otherwise, it may trade sideways. We would upgrade to high confidence if operating margins expand above 20% or revenue growth exceeds 12%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on O'Reilly Auto Parts's 12-month outlook, with a consensus price target around $107.80 and implied upside of +21.0% versus the current price.
Average Target
$107.80
0 analysts
Implied Upside
+21.0%
vs. current price
Analyst Count
—
covering this stock
Price Range
$89 - $120
Analyst target range
The target price range spans from a low of $89.00 to a high of $120.00, with the low target slightly below the current price, suggesting some analysts see limited downside, while the high target implies a 31.8% upside. The wide spread of $31 between low and high reflects moderate uncertainty about the company's future, likely due to factors such as the potential Napa acquisition and margin pressures. The consensus leans bullish, with the average target well above the current price, and the recent ratings actions show no downgrades, reinforcing positive sentiment.
Bulls vs Bears: ORLY Investment Factors
O'Reilly presents a mixed picture: strong revenue growth and high gross margins are offset by a premium valuation and margin pressures. The bull case is supported by robust sales and potential Napa acquisition, while the bear case highlights high leverage and negative ROE. Currently, the bull case has slightly stronger evidence given the consistent growth and analyst optimism, but the key tension is whether margin expansion can justify the high PE. If margins stabilize and the Napa deal materializes, the stock could re-rate higher; otherwise, valuation compression is a real risk.
Bullish
- Strong Revenue Growth: Q1 2026 revenue grew 10.2% YoY to $4.56B, with consistent sequential growth from $4.41B in Q4 2025. This demonstrates robust demand across both DIY and professional segments, underpinning market share gains.
- High Gross Margin: Gross margin stands at 51.6%, reflecting strong pricing power and efficient supply chain. This high margin provides a buffer against cost inflation and supports profitability.
- Positive Analyst Sentiment: With 24 analysts, the consensus rating is 'Buy' and the average target price is $108.17, implying 18.8% upside from the current price of $91.05. No recent downgrades reinforce the bullish outlook.
- Low Beta Provides Stability: Beta of 0.52 indicates the stock is less volatile than the market, making it a defensive choice in uncertain economic times. This stability is attractive for risk-averse investors.
Bearish
- High Valuation Multiple: Trailing PE of 30.6x and forward PE of 24.9x are premium to the market, leaving little room for error. If earnings growth disappoints, the stock could face multiple compression.
- Negative ROE: ROE is -332.5%, indicating the company is generating losses relative to shareholder equity, likely due to significant share buybacks and debt. This raises concerns about capital allocation efficiency.
- High Debt Levels: Debt-to-equity ratio is -11.1x, reflecting a highly leveraged balance sheet. High interest expenses (e.g., $62.7M in Q1 2026) could pressure margins if rates rise.
- Margin Pressure: Operating margin declined from 20.7% in Q3 2025 to 18.5% in Q1 2026, indicating rising costs. This trend, if continued, could erode profitability.
ORLY Technical Analysis
O'Reilly's stock is currently in a recovery phase after a significant downtrend, with the price at $91.05 as of August 14, 2026, reflecting a 1-year decline of -10.3%. The stock is trading at 83.7% of its 52-week range (between $82.59 low and $108.72 high), indicating it has recovered from the lows but remains well below its highs. This positioning suggests the market is cautiously optimistic, with the stock having bounced off the low but still facing overhead resistance from prior support levels.
Beta
0.52
0.52x market volatility
Max Drawdown
-23.3%
Largest decline past year
52-Week Range
$83-$109
Price range past year
Annual Return
-14.3%
Cumulative gain past year
| Period | ORLY Return | S&P 500 |
|---|---|---|
| 1m | +1.3% | +1.9% |
| 3m | -2.9% | +2.3% |
| 6m | -4.7% | +10.6% |
| 1y | -14.3% | +19.5% |
| ytd | -1.4% | +11.8% |
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ORLY Fundamental Analysis
O'Reilly's revenue growth has been robust, with the most recent quarter (Q1 2026) reporting revenue of $4.56 billion, a 10.2% year-over-year increase. This growth is consistent with the prior quarters, as Q4 2025 revenue was $4.41 billion, Q3 2025 was $4.71 billion, and Q2 2025 was $4.53 billion, showing a stable upward trajectory. The company's growth is driven by both DIY and professional segments, with balanced contributions, and the recent news of a potential Napa acquisition could further accelerate market share gains.
Quarterly Revenue
$4.6B
2026-03
Revenue YoY Growth
+10.2%
YoY Comparison
Gross Margin
51.5%
Latest Quarter
Free Cash Flow
$1.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ORLY Overvalued?
Given that O'Reilly is profitable, the primary valuation metric selected is the price-to-earnings (PE) ratio. The trailing PE is 30.6x, while the forward PE is 24.9x, indicating that the market expects earnings growth of approximately 23% over the next year. This gap between trailing and forward multiples suggests optimism about future profitability, likely driven by margin expansion and continued revenue growth.
PE
30.6x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 17x~38x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
21.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant: the company carries a high debt load with a debt-to-equity ratio of -11.1x, and interest expenses of $62.7M in Q1 2026 could rise with rates. The negative ROE of -332.5% suggests that share buybacks have reduced equity, but the company still generates strong operating cash flow (FCF TTM of $1.91B). However, the current ratio of 0.77 indicates potential liquidity concerns, as current liabilities exceed current assets. Margin pressure is evident with operating margin down to 18.5% in Q1 2026 from 20.7% in Q3 2025, which could impact earnings growth if not reversed.