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What this page is: Delvantic's full research page for O'Reilly Automotive Inc. (ORLY) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-08-23): Designation Watch · Gem Score +4 (−100…+100 Quality+Value blend) · Quality 58 · Value -40 · Sentiment -9 (timing only, not weighted)
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reference-name attribute you can cite):
profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
price-history,income-trend,key-metrics,financials(statement tables),insider-trading. The analysis above is public; the raw data tables require a free account.
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raw inputs are public-company filings and market data (via licensed data feeds);
every model, score, lens read, and prediction on this page is Delvantic's own analysis.
O'Reilly Automotive Inc.
ORLY NASDAQO'Reilly Automotive Inc. is a leading specialty retailer and distributor of automotive aftermarket parts, tools, supplies, equipment, and accessories. Operating under the O'Reilly Auto Parts brand, the company serves both professional service providers and do‑it‑yourself customers through an extensive network of retail locations and robust online channels. Its stores and distribution centers focus on replacement parts, maintenance items, performance products, and repair tools for a wide range of domestic and imported vehicles, including cars, trucks, and SUVs. O'Reilly Automotive Inc. also offers value-added services such as parts lookup, repair advice, and in-store support to assist customers with vehicle maintenance and repair decisions. Headquartered in Springfield, Missouri, and founded in the United States, the company plays a significant role in the North American automotive aftermarket ecosystem by ensuring timely availability of critical parts and related products to both commercial repair shops and individual vehicle owners.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 2.97
Total Equity: -$763.35M
Shares: 855,919,000
Total Debt: $6.02B
Cash: $193.79M
EBITDA: $3.97B
Total Debt: $6.02B
Cash: $193.79M
Revenue: $17.78B
Revenue: $17.78B
Revenue: $17.78B
Total Equity: -$763.35M
Tax Rate: 21.7%
Equity: -$763.35M
Total Debt: $6.02B
Cash: $193.79M
Current Liabilities: $8.78B
Long-Term Debt: $6.02B
Total Debt: $6.02B
Total Equity: -$763.35M
Shares: 855,919,000
Shares: 855,919,000
CapEx: -$1.17B
Shares: 855,919,000
Stock Price: $93.26
Net Income: $2.54B
Industry Benchmarks
Income Statement (Annual)
Last updated: Aug 11, 2026 11:57am (12d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $13.3B | $14.4B | $15.8B | $16.7B | $17.8B |
| Cost of Revenue | $6.3B | $7.0B | $7.7B | $8.2B | $8.6B |
| Gross Profit | $7.0B | $7.4B | $8.1B | $8.6B | $9.2B |
| Operating Expenses | $4.1B | $4.4B | $4.9B | $5.3B | $5.7B |
| Operating Income | $2.9B | $3.0B | $3.2B | $3.3B | $3.5B |
| Net Income | $2.2B | $2.2B | $2.3B | $2.4B | $2.5B |
| EBITDA | $3.2B | $3.3B | $3.6B | $3.7B | $4.0B |
| EPS | $31.39 | $33.75 | $38.80 | $40.91 | $2.98 |
| EPS (Diluted) | $31.10 | $33.44 | $38.47 | $40.66 | $2.97 |
Balance Sheet (Annual)
Last updated: Aug 11, 2026 11:34am (12d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $362.1M | $108.6M | $279.1M | $130.2M | $193.8M |
| Total Current Assets | $4.5B | $5.0B | $5.6B | $5.8B | $6.7B |
| Total Assets | $11.7B | $12.6B | $13.9B | $14.9B | $16.5B |
| Current Liabilities | $5.9B | $7.1B | $7.7B | $8.3B | $8.8B |
| Long-Term Debt | $3.8B | $4.4B | $5.6B | $5.5B | $6.0B |
| Total Liabilities | $11.8B | $13.7B | $15.6B | $16.3B | $17.3B |
| Total Equity | -$66.4M | -$1.1B | -$1.7B | -$1.4B | -$763.4M |
| Retained Earnings | -$1.4B | -$2.4B | -$3.1B | -$2.8B | -$2.3B |
Cash Flow (Annual)
Last updated: Aug 11, 2026 11:57am (12d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $3.2B | $3.1B | $3.0B | $3.0B | $2.8B |
| Capital Expenditure | -$442.9M | -$563.3M | -$1.0B | -$1.0B | -$1.2B |
| Free Cash Flow | $2.8B | $2.6B | $2.0B | $2.0B | $1.6B |
| Acquisitions (net) | — | — | — | — | — |
| Net Debt Issued / (Repaid) | $0 | $847.3M | $749.7M | $498.9M | $0 |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$2.5B | -$3.3B | -$3.2B | -$2.1B | -$2.1B |
| Net Change in Cash | -$103.5M | -$253.5M | $170.5M | -$148.9M | $63.5M |
Growth Trends (YoY %)
Last updated: Aug 11, 2026 11:57am (12d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +8.1% | +9.7% | +5.7% | +6.4% |
| Gross Profit Growth | +5.2% | +9.8% | +5.5% | +7.2% |
| Operating Income Growth | +1.3% | +7.8% | +2.0% | +6.4% |
| Net Income Growth | +0.4% | +8.0% | +1.7% | +6.3% |
| EBITDA Growth | +2.1% | +8.5% | +3.3% | +7.0% |
Deep Analysis
Narrative Economics
market-narrative step).
AI Lens 4th lens · how AI reaches this business · 5-yr
2026-08-11AI-assisted diagnosis and repair guidance lowers the competence barrier that has been pushing consumers out of DIY and into shops; DIY is O'Reilly's higher-gross-margin channel, so a partial reversal of DIY share erosion flows straight to mix.
Agentic and AI-mediated shopping strips the advisory and search friction that lets a local store charge more than a marketplace, converting a relationship-and-expertise sale into a price-and-availability API query.
Whether AI intermediaries route on availability-within-the-hour (O'Reilly wins) or on landed price (marketplaces win); observable in DIY comparable-store ticket and gross margin per transaction versus online-fulfilled share.
The dual-market hub-and-spoke network — thousands of stores, distribution and hub centers holding deep slow-moving SKU coverage, plus delivery fleets and installer credit relationships that make 30-minute fill rates possible.
AI Lens thesis
O'Reilly's monetized unit is a physical part delivered inside a repair's time window, and the economics rest on inventory breadth placed near demand — not on information processing. AI's real transmission channels are three: (1) it commoditizes the counter person's fitment and diagnostic expertise, historically part of the reason a professional installer or DIYer calls O'Reilly rather than ordering online; (2) it improves the company's own demand forecasting and SKU-to-store allocation, where marginal fill-rate gains on a $17.8B revenue base with ~51.6% gross margin have leverage and could ease the working-capital and capex intensity visible in falling FCF; (3) it changes who decides what part is needed — if vehicle telematics plus AI diagnostics push repair routing toward OEM and dealer channels, the aftermarket loses the decision point, though that is a slow, fleet-first mechanism. Net: exposure is genuinely modest, the direction mildly positive, and the real bear case here (EV parts content, capex cadence) is not an AI story.
What the market may be underestimating
Upside AI-driven store-level assortment and hub replenishment could raise first-time fill rates while cutting inventory per store — the single largest lever on O'Reilly's deteriorating free cash flow conversion, and nobody underwrites it.
Downside The professional installer's own AI diagnostic tools increasingly specify exact OEM part numbers, making the order commodity-priceable across three suppliers and quietly compressing DIFM gross margin without any visible share loss.
Outcome range spread 41
Claude Reading
The raw numbers describe a fundamentally healthy, boring compounder that the synthesis model is trying to torch. Revenue grew from $13.33B (2021) to $17.78B (2025) — a 7.5% CAGR, not the 6.1% the momentum block reports, and the most recent quarter ($4.56B vs $4.14B a year prior) shows 10.1% YoY acceleration, not deceleration. Net income margins have held a remarkable 13-15% band across eight quarters, operating margin sits at 19.5%, ROA at 15.4%, and FCF is $1.59B on $2.76B of OCF. Negative equity of -$763M and a 0.77 current ratio look scary in isolation but reflect deliberate buyback-funded capital return, not distress — this is the AutoZone playbook and has been for a decade. The "fcf_cagr: -11.4%" flag is the one legitimate concern: capex has ramped ($1.17B) and FCF is compressing even as OCF grows, which matters if it persists but is consistent with the distribution center buildout cycle ORLY has telegraphed.
The synthesis verdict of $42 fair value against a $93 price is where I part ways hard. A DCF that outputs a 55% discount on a business compounding revenue high-single-digits with 19%+ operating margins and $1.6B+ FCF is almost certainly using either a punitive terminal growth assumption or a discount rate that ignores the aftermarket's proven cycle-resistance. EV/EBITDA of 21.5x and P/E of 31x are premium but not absurd for a business that has beaten the S&P for 20+ years; AZO trades ~20x because it has slower comps and lower professional mix, not because 20x is the "right" multiple for the category. The narrative-economics layer calling this a "fallen angel" at 31x P/E is category confusion — fallen angels trade at 8x with falling revenue, not 31x with accelerating comps. The market-forces "neutral" read and the pre-flight "defensive compounder" framing are much closer to reality than the DCF's $42.
The contrarian short case is real but narrower than the bear story suggests: (1) EV mix eventually compresses parts-per-vehicle (but the current US fleet age is ~12.6 years and rising, giving a decade+ runway); (2) the 4-for-1 split in mid-2025 mechanically explains why per-share optics look different and may have pulled forward retail demand that now unwinds; (3) insider activity shows net selling (84,600 + 1,200 + 2,595 shares sold against option exercises and awards, no open-market buys), which is neutral-to-slightly-negative but typical for mature-comp exec teams; (4) the recent quarterly margin has drifted from 15.4% (Q3 2025) to 13.2% (Q1 2026) — that's a genuine 220bp compression in two quarters and deserves scrutiny, possibly tariff/mix related. If margin compression is structural rather than seasonal, a 25x multiple on normalized ~$8.50 EPS gets you to ~$210 pre-split or ~$52 post-split, which is closer to the synthesis number than my base case.
Committing: I dissent from the synthesis "overvalued to $42" verdict but partially agree the stock is not cheap. The $42 fair value is model artifact, not reality — no aftermarket peer trades there and ORLY's fundamentals don't justify a 55% haircut. But at $93 with margin compression showing up in Q1 2026 and FCF CAGR negative, this isn't a screaming buy either. Fair value in the $75-85 range (roughly 26-28x forward EPS, in line with historical premium to AZO) is defensible; current price embeds continued execution with no cushion for the tariff/margin question. I'd want to see Q2 2026 margins recover to 14%+ before adding; below $80 becomes interesting, above $100 is where the narrative-fragility argument gets teeth. The prior models are directionally right that there's no margin of safety, but wildly wrong on magnitude.
GPT Reading
What stands out is not fragility in the business but the mismatch between business quality and what the current quote demands. O’Reilly has been remarkably steady: revenue rose from $13.33B in 2021 to $17.78B in 2025, a solid 7.5% annualized pace, while net income moved from $2.16B to $2.54B. Gross margin is still elite at 51.6%, operating margin 19.5%, and net margin 14.3% for a retailer selling replacement parts into a mission-critical category. Quarterly numbers also show resilience rather than deterioration: the latest quarter did $4.56B of revenue and $604M of net income versus $4.14B and $539M a year earlier, so roughly 10% sales growth and 12% earnings growth in the most recent reported quarter. That is better than the “mature earner” label implies. The problem is that the market is already paying for this stability as if it were still a long-duration compounder. At 31.4x earnings, 21.5x EV/EBITDA, and 4.5x sales, the stock is priced like a premium consumer compounder, not a mid-single-digit to high-single-digit grower with modest margin expansion left.
The underlying economics are good, but the balance between growth, buybacks, and reinvestment is less flattering than the headline EPS-style narrative usually suggests. Free cash flow was $1.59B in 2025 against $2.54B of net income, a 63% conversion rate, with capex running a hefty $1.17B. That capex burden matters because this is not a software-like business where accounting earnings cleanly translate to distributable cash. The balance sheet also deserves more respect than bulls typically give it: $6.02B of debt, only $194M of cash, negative equity of $763M, and a sub-0.8 current ratio. Negative equity is not automatically alarming for a repurchasing retailer, but it does mean the equity story depends heavily on continuity of cash generation and access to financing. If I take 2025 free cash flow of $1.59B against a $75.3B market cap, the equity is trading around a 2.1% FCF yield. For a business growing revenue 6%-7% and earnings 4%-6%, that is simply too expensive. Even granting high quality and defensiveness, the valuation leaves little room for any normalization in margins, traffic, or multiples.
The recent quarter cadence actually reinforces my caution. Revenue has continued to rise, but margins are not obviously on a one-way path upward. Net margin was 15.4% in 2025’s September quarter but 13.7% in December and 13.2% in the latest March quarter, which is seasonally normal to a point but still reminds you this is an operating business, not a perpetual margin escalator. Annual operating income increased from $3.25B in 2024 to $3.46B in 2025, only about 6.5%, while EV/revenue of 4.8x and EV/EBITDA above 21x imply a much richer embedded expectation. The cleanest way to frame it is that O’Reilly looks like a terrific company whose stock now requires either sustained double-digit EPS growth, continued aggressive repurchases, or a market willing to perpetually capitalize defensive retail earnings at a luxury multiple. The data here support the first only intermittently, the second less comfortably once you account for leverage and capex, and the third is not something I like underwriting.
The strongest case against my view is straightforward: this company has earned its premium. Over five years, revenue has compounded steadily, margins have held in a narrow and attractive band, and ROA of 15.4% is excellent. The latest quarterly comparison is stronger than the annual CAGR summary suggests, and the aftermarket category has structural support from an aging car parc, rising repair complexity, and a professional customer base that is less discretionary than general retail demand. Negative equity is largely self-inflicted through capital returns rather than distress, and O’Reilly has historically been able to borrow cheaply because its earnings are stable. If the market is really paying for recession resistance and share gains, 31x earnings may not be absurd in a world where many lower-quality consumer names trade richly on far worse margins and much shakier cash flows. I weigh that evidence differently because even a great retailer usually cannot outrun the math of a 2% FCF yield forever; if growth settles near the reported 6.1% revenue CAGR and 4.0% earnings CAGR, multiple compression can overwhelm business execution.
What would change my mind is not another decent quarter; it would be proof that the business can sustainably grow faster than the current valuation implies while converting earnings to cash more efficiently. Specifically, I would want to see revenue growth hold above 8%-9% for several quarters, operating margin stay near or above 19.5%, and free cash flow move materially above $2.0B despite capex, not just because working capital happened to cooperate. A clearer deleveraging trend or evidence that incremental store and distribution investments are lifting returns rather than just supporting maintenance growth would also help. Conversely, if same-store momentum softens and net income growth drops back toward low single digits, I think the stock has meaningful de-rating risk. My base case is that O’Reilly deserves a premium, just not anything close to this one; a multiple in the low-20s on current earnings would be easier to defend, which points to a materially lower price than $93.
Grok Reading
O'Reilly’s raw financials describe a high-quality mature earner that is simply no longer cheap enough to own at $93. Revenue compounded from $13.33B in 2021 to $17.78B in 2025 at a 6.1% CAGR, with trailing twelve-month net income of $2.54B and a net margin locked near 14.3%. Gross margin holds at 51.6% and operating margin at 19.5%—elite retail economics—while ROA of 15.4% confirms the store base still throws off cash. Yet free-cash-flow tells a colder story: FCF fell to $1.59B on $1.17B of capex, producing an FCF CAGR of –11.4% even as reported earnings grew 4%. The balance sheet is pure capital-return theater—$6.02B of debt, only $194M of cash, and negative equity of –$763M—financed by the same buybacks that have kept the share count shrinking. Quarterly progression is steady rather than accelerating: the March 2026 quarter printed $4.56B of revenue (+10% versus the year-ago $4.14B) and a 13.2% net margin, but the sequential pattern remains mid-single-digit growth with seasonal margin peaks in the back half. At 31.4× earnings, 4.5× sales and 21.5× EV/EBITDA, the market is capitalizing a 6% grower with declining FCF as if it were still a structural compounder.
The valuation models’ $42–46 fair-value range is directionally correct even if the absolute number is harsh; a more charitable 20–22× multiple on $2.54B of earnings still lands closer to $55–65, leaving the current $93 print 40–70% above any cash-flow-anchored anchor. Negative equity and a 0.77 current ratio are not distress signals for this model—they are the deliberate residue of decades of aggressive repurchase—but they do mean equity holders are levered to continued FCF generation and multiple stability. Insider activity is noise: option exercises and offsetting sales in May 2026, plus routine awards, carry no directional information. The narrative layer is doing almost all the work: the stock trades at a roughly 100% premium to DCF because investors still believe the aging ICE fleet, professional-mix shift, and DIY stickiness will offset EV penetration and DIY share loss for years. That story has held, but it is fragile—any acceleration in EV adoption curves or a consumer pullback that hits DIY volumes would collapse the multiple without needing an earnings miss.
The strongest case against calling the stock overvalued is simply the track record and the competitive moat. O'Reilly has taken share for more than a decade, expanded operating margin from the high teens into the low twenties at times, and consistently converted revenue into high-teens ROIC stores. A smart bull will note that recent-quarter revenue growth of 6–10% still beats the broader aftermarket, that professional customers are less price-elastic than DIY, and that the 31× P/E is only modestly above AutoZone once growth differentials are considered. They will also argue that FCF compression is temporary store-build investment rather than structural decay, and that negative equity is an accounting artifact of value-accretive buybacks, not leverage risk. Those points have merit on quality; they do not justify paying 21× EBITDA for mid-single-digit growth when FCF is already shrinking. Quality is already in the price—twice over.
What would flip the verdict is concrete evidence that FCF can re-accelerate above $2B while revenue growth sustains high-single digits, or a multiple compression into the low-20× P/E zone ($60–70) that finally aligns price with the mature-earner cash flows. Conversely, two consecutive quarters of sub-4% revenue growth or further FCF erosion below $1.4B would confirm the overvaluation is even worse than the models imply.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
O'Reilly is a mature, high-quality retailer running the classic auto-parts playbook: revenue grew from $13.3B (2021) to $17.78B (2025), a ~7.5% CAGR, with gross margin stable in a tight 51-53% band and operating margin holding near 19.5-21.9%. Net income compounded from $2.16B to $2.54B. Earnings quality is pristine — OCF/NI at 1.32x, accruals at -5.5% of assets, Beneish M at -2.48, and Altman Z at 4.03. Nothing in the mechanical checks suggests aggressive accounting.
Verify before trusting this (5)
- Confirm the 2025 share-count jump reflects a stock split (not an actual issuance) — verify split ratio in 10-K
- Reconcile the FCF decline 2021-2025: is it capex intensity (new stores, distribution), working capital build, or something structural
- Check debt maturity ladder and interest coverage given $5.82B net debt
- Same-store sales trend and any customer-mix shift (DIY vs professional)
- Confirm no material off-balance-sheet obligations (lease liabilities, supplier financing)
The e2e composite fair value of $45.71 and signal-adjusted $41.96 imply -55% downside from $93.19, which would be a screaming short if believed. I don't. The DCF ($45.69), EPV floor ($38.14), and anchored P/E ($53.33) all cluster in the $38-53 range, which is the classic pattern of models that under-reward a high-ROIC, low-reinvestment-need compounder with durable pricing power and elite earnings quality. ORLY has historically traded at premium multiples for good reason - steady mid-teens EPS growth, aggressive buybacks, and defensive cash flows. Applying a quality premium to the anchored-P/E of $53.33 (say 40-60% for the franchise) gets you to roughly $75-85 deserved value - still below $93.19. So the price isn't heroic, but it's also not offering margin of safety. The market has already paid for the quality. Bear risks (EV mix shift, DIY erosion, leverage) are real long-tail concerns but not yet in the numbers. Bull case of continued compounding is largely priced in. Verdict: fair, leaning slightly rich, but the composite FV is not credible as a target.
Verify before trusting this (4)
- Forward SSS guidance and pro vs DIY mix trends
- FCF trajectory and capex cadence for new stores
- Buyback pace and remaining authorization
- Any commentary on EV parts exposure and category mix
ORLY sits in an odd sentiment pocket. The tape is mildly risk-on (regime +47, VIX 15.5), but with beta 0.52 the market's push barely reaches this name either way. What actually drives sentiment here is the narrative: a 'defensive compounder with pricing power' story that has kept the multiple stretched well above any fundamental anchor. That story is strong in intensity but flagged fragile in durability, which is the key tension - the market is paying a premium for stability while the durability of the story itself is in question. Recent analyst tone (RBC pointing to upper-end guidance) is a small, concrete tailwind that reinforces the defensive-compounder framing and helped drive a 3.6% pop in late July. That is the kind of incremental positive that keeps the narrative alive month to month. Against that, the macro backdrop - 10y at 4.65%, market PE 26 - is a headwind for any high-multiple name, and the emerging bear framing (EV disruption, OEM DTC, DIY erosion) is a slow-drip narrative risk that has not yet broken but is visibly forming. Net: the forces roughly offset. The name is not being rewarded by the risk-on tape (too low-beta) and not being punished by macro (defensive positioning), while the narrative is intact but brittle.
Verify before trusting this (4)
- Q3 print and comp-store sales trajectory - a miss would crack the compounder narrative fast
- Any high-profile sell-side downgrade citing EV or OEM DTC risk (narrative pivot trigger)
- 10y yield direction - a move above 4.8% pressures premium defensives
- Sector rotation signals - if defensives lead, ORLY benefits; if cyclicals lead, it lags
O'Reilly's monetized unit is a physical part delivered inside a repair's time window, and the economics rest on inventory breadth placed near demand — not on information processing. AI's real transmission channels are three: (1) it commoditizes the counter person's fitment and diagnostic expertise, historically part of the reason a professional installer or DIYer calls O'Reilly rather than ordering online; (2) it improves the company's own demand forecasting and SKU-to-store allocation, where marginal fill-rate gains on a $17.8B revenue base with ~51.6% gross margin have leverage and could ease the working-capital and capex intensity visible in falling FCF; (3) it changes who decides what part is needed — if vehicle telematics plus AI diagnostics push repair routing toward OEM and dealer channels, the aftermarket loses the decision point, though that is a slow, fleet-first mechanism. Net: exposure is genuinely modest, the direction mildly positive, and the real bear case here (EV parts content, capex cadence) is not an AI story.
None surfaced.
Verify before trusting this (8)
- first-time fill rate disclosures
- hub/DC store counts
- inventory per store trend
- US average vehicle age trend
- miles driven per vehicle
- EV share of repair-age fleet
- online-fulfilled share of DIY sales
- same-day delivery competition from marketplaces
This lens hasn't been run for this ticker yet.
Prediction unavailable. valuation-synthesis has no result for ORLY — the prediction needs its fair-value anchors.