ORLY AI Stock Analysis – Buy, Hold, or Avoid?
O'Reilly Automotive, Inc. (ORLY)
O'Reilly Automotive (ORLY) offers a compelling long-term investment case, driven by sector-leading fundamentals, robust growth, and a strong competitive position, though short-term technicals suggest caution. The stock is fairly valued at a premium, reflecting its consistent execution and growth prospects, with analyst sentiment and fundamentals supporting further upside over the next 6-24 months. Investors should be mindful of near-term volatility and margin pressures but can expect resilient performance and compounding returns over time.
Fundamentals
O'Reilly Automotive (ORLY) exhibits robust fundamental health, illustrated by consistent revenue and earnings growth, stable margins, and strong cash generation. The company has steadily grown both the top and bottom lines, with profitability and operational efficiencies well sustained despite competitive market conditions. These strengths are reflected in its premium valuation and a solid historical record of management execution.
Financial Highlights
- Revenue
- Net Income
- Net Margin (%)
Revenue
7.78% YoY
Q4 2025
Net Income
9.82% YoY
Q4 2025
Net Margin
Q4 2025
Growth Metrics
Revenue Growth YoY
Latest Quarter: Q4 2025
Net Income Growth YoY
Latest Quarter: Q4 2025
Revenue Per Share Growth YoY
Latest Quarter: Q4 2025
EPS Growth YoY
Latest Quarter: Q4 2025
Book Value Per Share Growth YoY
Latest Quarter: Q4 2025
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 4.4B | 4.7B | 4.5B | 4.1B | 4.1B | 4.4B | 4.3B | 4.0B |
| Revenue Growth YoY | +7.78% | +7.82% | +5.92% | +4.04% | +6.88% | +3.83% | +4.99% | +7.24% |
| Net Income | 605.2M | 725.9M | 668.6M | 538.5M | 551.1M | 665.5M | 622.8M | 547.2M |
| Net Income Growth YoY | +9.82% | +9.08% | +7.34% | -1.60% | -0.25% | +2.41% | -0.72% | +5.87% |
| EPS | $0.72 | $0.86 | $0.78 | $0.63 | $0.64 | $0.76 | $0.71 | $0.62 |
| EPS Growth YoY | +13.01% | +12.43% | +10.23% | +1.34% | +2.39% | +6.09% | +2.89% | +10.95% |
Profitability Metrics
Gross Margin
TTM
Operating Margin
TTM
Net Margin
TTM
Return on Equity
TTM
Return on Assets
TTM
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Gross Margin | 51.79% | 51.85% | 51.41% | 51.28% | 51.30% | 51.58% | 50.75% | 51.16% |
| Operating Margin | 18.77% | 20.74% | 20.21% | 17.92% | 18.04% | 20.55% | 20.21% | 18.92% |
| Net Margin | 13.71% | 15.43% | 14.78% | 13.02% | 13.46% | 15.25% | 14.58% | 13.76% |
| Return on Equity (ROE) | -79.29% | -81.14% | -54.28% | -39.67% | -40.20% | -46.24% | -39.34% | -39.34% |
| Return on Assets (ROA) | 3.90% | 4.73% | 4.49% | 3.75% | 3.97% | 4.90% | 4.65% | 4.14% |
Technical Analysis
ORLY is currently in a topping phase characterized by a strong downtrend with oversold indicators neutralizing, signaling consolidation. Price is trading below key moving averages with a death cross confirmed, while MACD suggests a mixed momentum picture. The stock is testing support around $87.72 with resistance near $95.12 to $96.92, indicating a range-bound scenario in the near term.
No extreme reading
Price in downtrend
Range-bound market
50 below 200 - bearish
Key Technical Values
Price with Moving Averages
50-day, 150-day and 200-day simple moving averages
Relative Strength Index
Momentum oscillator measuring speed and magnitude of price changes
RSI (14)
Earnings
O'Reilly Automotive (ORLY) exhibits robust fundamental health, illustrated by consistent revenue and earnings growth, stable margins, and strong cash generation. The company has steadily grown both the top and bottom lines, with profitability and operational efficiencies well sustained despite competitive market conditions. These strengths are reflected in its premium valuation and a solid historical record of management execution.
Latest Earnings
Q4 2025 Earnings (Dec 31, 2025)
Earnings Per Share (EPS)
Actual
$0.71
Estimated
$0.73
Surprise
$-0.02
Surprise %
-2.20%
Revenue
Actual
$4.41B
Estimated
$4.39B
Surprise
+$21.49M
Surprise %
+0.49%
Historical Earnings
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Earnings Per Share | ||||||||
| EPS (Actual) | $0.71 | $0.85 | $0.78 | $0.62 | $9.96 | $11.41 | $10.55 | $9.20 |
| EPS (Estimated) | $0.73 | $0.83 | $0.78 | $0.66 | $9.73 | $11.55 | $10.98 | $9.28 |
| EPS Surprise | -$0.02 | +$0.02 | -$0.00 | -$0.04 | +$0.23 | -$0.14 | -$0.43 | -$0.08 |
| % Diff | -2.2% | +2.0% | -0.1% | -5.6% | +2.4% | -1.2% | -3.9% | -0.9% |
| Revenue | ||||||||
| Revenue (Actual) | $4.41B | $4.71B | $4.53B | $4.14B | $4.1B | $4.36B | $4.27B | $3.98B |
| Revenue (Estimated) | $4.39B | $4.69B | $4.53B | $4.17B | $4.05B | $4.4B | $4.31B | $3.99B |
| Revenue Surprise | +$21.49M | +$16.39M | -$6.51M | -$35.34M | +$50.3M | -$40.35M | -$36.9M | -$9M |
| % Diff | +0.5% | +0.3% | -0.1% | -0.8% | +1.2% | -0.9% | -0.9% | -0.2% |
Valuation
O'Reilly Automotive exhibits strong fundamentals with consistent revenue and earnings growth and solid profit margins, supported by a robust cash flow profile despite some balance sheet peculiarities. While its valuation multiples appear elevated versus sector peers, this is largely reflective of its growth prospects and market positioning. Analyst sentiment remains positive with a moderate to strong buy consensus and price targets indicating upside potential from current levels.
Valuation Metrics
Price to Earnings
TTM
Price to Sales
TTM
Price to Book
TTM
Enterprise Value to EBITDA
TTM
Enterprise Value to Revenue
TTM
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Price to Earnings | 31.81 | 31.50 | 28.78 | 38.11 | 31.02 | 25.09 | 23.94 | 30.47 |
| Price to Sales | 17.44 | 19.43 | 17.01 | 19.84 | 16.70 | 15.30 | 13.96 | 16.78 |
| Price to Book | -100.87 | -102.22 | -62.48 | -60.48 | -49.88 | -46.41 | -37.66 | -47.95 |
| Enterprise Value to EBITDA | 88.24 | 89.62 | 81.52 | 104.16 | 88.25 | 72.95 | 68.60 | 85.57 |
| Enterprise Value to Revenue | 19.32 | 21.18 | 18.80 | 21.76 | 18.60 | 17.04 | 15.73 | 18.66 |
Sentiment & Analyst Ratings
O'Reilly Automotive's market sentiment is predominantly positive, supported by strong analyst buy ratings and solid revenue growth despite a slight EPS miss in Q4 2025. Investor confidence remains robust due to the company's expansion plans and favorable long-term industry tailwinds, although some caution persists due to rising expenses and debt levels. The stock shows potential upside from current prices, reflecting generally bullish market psychology.
Analyst Recommendations
Risk Assessment
O'Reilly Automotive exhibits a strong market presence with solid revenue growth and profitability, but its liquidity ratios indicate potential short-term financial constraints. The company carries a negative debt-to-equity ratio driven by significant share repurchases, reflecting a unique capital structure with moderate leverage. Key risks include softness in DIY customer demand, rising cost pressures, and competitive/industry disruptions.
Liquidity & Solvency
Current Ratio
Latest Quarter: Q4 2025
Quick Ratio
Latest Quarter: Q4 2025
Debt-to-Equity
Latest Quarter: Q4 2025
Debt-to-Assets
Latest Quarter: Q4 2025
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
|---|---|---|---|---|---|---|---|---|
| Liquidity Metrics | ||||||||
| Current Ratio | 0.77 | 0.76 | 0.72 | 0.71 | 0.71 | 0.70 | 0.70 | 0.71 |
| Quick Ratio | 0.12 | 0.11 | 0.11 | 0.10 | 0.09 | 0.10 | 0.11 | 0.10 |
| Solvency Metrics | ||||||||
| Debt-to-Equity | -11.12 | -9.39 | -6.75 | -5.97 | -5.78 | -5.36 | -4.87 | -5.45 |
| Debt-to-Assets | 0.51 | 0.52 | 0.53 | 0.53 | 0.53 | 0.53 | 0.54 | 0.53 |
Liquidity Assessment
Current Ratio: 0.77(Weak)
Quick Ratio: 0.12(Weak)
The company has relatively weak liquidity and may face challenges meeting short-term obligations.
Solvency Assessment
Debt-to-Equity: -11.12(Low)
Debt-to-Assets: 0.51(High)
The company has conservative debt levels, indicating low financial risk and strong long-term solvency.
Frequently Asked Questions about ORLY
AI Answers: Common Questions About ORLY
Get AI-powered answers to the questions investors ask most about O'Reilly Automotive, Inc.
ORLY is a good buy for medium- and long-term investors, trading at $93.01 with a P/E of 31.3 and strong fundamentals (gross margin >51%, ROE ~35%). While the valuation is at a premium, it is justified by consistent 6-7% revenue and earnings growth, robust cash flow, and a dominant market position. Short-term traders should wait for a technical breakout, but long-term upside remains compelling.
Unless your thesis has changed or you require liquidity, there is no strong reason to sell now. Fundamentals remain strong, analyst targets imply 14-17% upside, and technicals do not indicate a major breakdown—just consolidation. Only consider selling if you are risk-averse to short-term volatility or if the stock breaks key support levels below $87.50.
The biggest risks are short-term liquidity constraints (current ratio below 1, quick ratio very low), margin compression from rising labor and supply chain costs, and the possibility of valuation contraction if growth slows. Sentinel notes debt-to-assets at 51% and a negative debt-to-equity ratio due to buybacks, but interest coverage remains strong (>13x).
Analyst price targets average $108-$110, representing 14-17% upside from current levels. Technically, resistance is at $95.12-$96.92, with further upside targets at $98.31 and $103.05 if momentum improves. Key support is at $87.72; a breakdown below this could signal further downside.
ORLY is fairly valued at a premium, with a P/E of 31.3 and EV/EBITDA above 20—higher than sector peers but justified by superior growth and margins. The negative book value and debt-to-equity are due to share buybacks and do not reflect operational weakness. The premium is warranted given the company's execution and growth profile.
Fundamentally, ORLY is very strong: revenue grew 6.4% YoY, net income 6.3%, gross margin >51%, operating margin ~19%, and ROE ~35%. The company generates high-quality earnings and cash flow, with sustainable growth from both organic sales and store expansion. Liquidity is a watchpoint, but overall financial health is robust.
Technically, ORLY is consolidating after a downtrend, trading below the 50 and 200 SMAs (death cross), with RSI neutral at 53 and weak trend strength (ADX 12.8). Support is at $87.72, resistance at $95.12-$96.92. No clear breakout or breakdown—momentum is mixed, so traders should wait for a decisive move.
Key catalysts include upcoming earnings reports (especially if commercial sales and new store openings outperform), successful execution of 225-235 new stores in 2026, and any margin improvement or positive guidance updates. Macro trends like an aging vehicle fleet and stable aftermarket demand also support the thesis.
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