O'Reilly Automotive - Aggressive Growth
December 26 2011 - 7:00PM
Zacks
O'Reilly Automotive (ORLY) continues to rise despite lofty
valuation, the stock remains a Zacks #1 Rank (Strong Buy).
Company Description
O'Reilly Automotive is a specialty retailer of automotive
aftermarket parts, tools, supplies, equipment and accessories.
Good Earnings
We have to go back to Oct 26 for the last quarterly report, but
it was a good one. Net income increased 27% or $32 million ahead of
the year ago level of $117 million. Revenue for the period was up
8% to $1.54 billion.
Earnings per share came in at $1.10, 10% ahead of what analysts
polled by Zacks were expecting. After meeting earnings expectations
in the June quarter of 2011, ORLY has returned to posting an
earnings surprise.
More Shares to be Repurchased
On November 16, the company announced its intention to increase
a share repurchase program. Adding $500 million to the existing
program brings the total to $1.5 billion. Prior to the increase,
the company had repurchased 14.4 million shares for $859 million
for an average price of $59.81, well below current levels.
Valuations
Shares of ORLY are not cheap by most metrics, but underlying
metrics such as sales per store and sales per square foot increased
in the most recent quarter.
The stock is trading at a premium to its direct competitors with
a 21.4x forward PE. By comparison, Autozone (AZO), a Zacks #2 Rank
(Buy) stock trades at 14x forward earnings estimates.
The Chart
ORLY has a solid history of beating estimates, a key reason for
its Zacks #1 Rank (Strong Buy). A look at the price and consensus
chart below shows a consistent trend of higher earnings expecations
and a higher stock price.
O Reilly Automotive (NASDAQ:ORLY)
Historical Stock Chart
From May 2024 to Jun 2024
O Reilly Automotive (NASDAQ:ORLY)
Historical Stock Chart
From Jun 2023 to Jun 2024