O’Reilly Automotive (ORLY)
NASDAQConsumer DiscretionarySpecialty RetailSnapshot 2026-09-04
$87.89+0.58%
Close 2026-09-04 · 1-day change
NASDAQConsumer DiscretionarySpecialty RetailSnapshot 2026-09-04
Intact: The reason to own it still holds.
O'Reilly Automotive grows revenue about 10% yearly, hitting $18.85 billion in 2026. Profit margins stay strong near 19.55%. Free cash flow is solid at about $1.85 billion. The company is buying back shares, supporting shareholder value.
Revenue growth could slow below 7%, hurting earnings. Profit margins may compress below 19%. Capital spending might rise, reducing free cash flow. The stock trades expensive with fragile quality signals.
The price is about 6% above our fair value near $82, below the Street median of $110. Analysts expect 30% revenue growth, which is optimistic versus our model's 2% implied growth. We see risk in margin and growth sustainability.
Breaks if: Capital expenditures exceed $1.5 billion in FY26
Breaks if: Free cash flow falls below $1.5 billion in FY26
Breaks if: Operating margin falls below 18.5% in FY26
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on steady growth. The current thesis state indicates a fragile recovery, with management making efforts to improve performance while facing sector headwinds.
The market has priced in an expensive valuation, reflecting a premium compared to peers. There is an expectations gap, suggesting that the current stock price may not fully account for potential risks and uncertainties.
Fundamentals are likely to remain stable in the near term, as management is on track with store expansion and maintaining capital expenditures. However, there is a moderate risk of missing earnings expectations, which could impact sentiment.
The thesis hinges on management's ability to maintain comparable store sales growth and the broader Consumer Discretionary sector's performance. Key factors include guidance updates and inflation trends that could affect consumer spending.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports this improved outlook. There are no new threats impacting the thesis at this time.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: Revenue falls below $17.7 billion in FY26
Over the next 1 to 3 years, ORLY's performance will depend on its execution and external economic conditions. Not investment advice.