O Reilly Automotive Inc (NASDAQ: ORLY)

Sector: Consumer Cyclical Industry: Auto Parts CIK: 0000898173
Market Cap 80.07 Bn
P/B -89.50
P/E 32.23
P/S 4.59
ROIC (Qtr) 36.32
Div Yield % 0.00
Rev 1y % (Qtr) 7.82
Total Debt (Qtr) 8.40 Bn
Debt/Equity (Qtr) -9.39

About

Price action

Investment thesis

Bull case

  • Operating cash flow of 2.75B provides exceptional 11.98x coverage of interest expenses 229.87M, showing strong debt service capability.
  • Operating cash flow of 2.75B provides strong 79.94x coverage of stock compensation 34.44M, indicating sustainable incentive practices.
  • Operating cash flow of 2.75B fully covers other non-current liabilities 499.56M by 5.51x, showing strong long-term stability.
  • Tangible assets of 15.33B provide robust 12.65x coverage of other current liabilities 1.21B, indicating strong asset backing.
  • Retained earnings of (2.44B) represent substantial 2.73x of equity (894.68M), indicating strong internal capital generation.

Bear case

  • Operating cash flow of 2.75B barely covers its investment activities of (1.18B), with a coverage ratio of -2.33, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 204.51M against inventory of 5.61B, the 0.04 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash reserves of 204.51M provide limited coverage of acquisition spending of (13.96M), which is -14.65x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Cash position of 204.51M provides weak coverage of payables of 7.06B, which is 0.03x, indicating potential working capital stress and supplier relationship risks.
  • Retained earnings of (2.44B) provide limited buffer against comprehensive income items of 15.62M, which is -156.06x, indicating elevated exposure to market risks.

Peer comparison

Companies in the Auto Parts
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ORLY O Reilly Automotive Inc 80.07 Bn 32.23 4.59 8.40 Bn
2 AZO Autozone Inc 57.24 Bn 23.23 2.97 12.05 Bn
3 APTV Aptiv PLC 19.67 Bn 66.67 0.98 8.03 Bn
4 GPC Genuine Parts Co 17.83 Bn 22.05 0.74 6.40 Bn
5 MGA Magna International Inc 15.86 Bn 15.36 0.38 7.48 Bn
6 ALV Autoliv Inc 9.72 Bn 12.92 0.92 2.19 Bn
7 MBLY Mobileye Global Inc. 9.47 Bn -28.17 4.88 0.00 Bn
8 BWA Borgwarner Inc 8.87 Bn 66.21 0.63 3.90 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 5.42 1.16
EV to Cash from Ops. EV/CFO 32.03 9.30
EV to Debt EV to Debt 10.50 34.64
EV to EBIT EV/EBIT 26.06 4.45
EV to EBITDA EV/EBITDA 22.79 7.40
EV to Free Cash Flow [EV/FCF] EV/FCF 55.61 17.25
EV to Market Cap EV to Market Cap 1.10 1.58
EV to Revenue EV/Rev 5.05 3.42
Price to Book Value [P/B] P/B -89.50 -0.33
Price to Earnings [P/E] P/E 32.23 11.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1.64
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 12.18
Dividend per Basic Share Div per Share (Qtr) 0.00 0.41
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 13.70
Interest Coverage Int. cover (Qtr) 14.72 -110.44
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -20.62 -13.49
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 76.89 27.17
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.96
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 3.95 5.41
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 5.05 -8.06
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.99 -22.36
EBT Growth (1y) % EBT 1y % (Qtr) 4.07 -123.98
EPS Growth (1y) % EPS 1y % (Qtr) 6.99 -110.42
FCF Growth (1y) % FCF 1y % (Qtr) -19.66 24.26
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.75 16.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.07 0.92
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.25
Cash Ratio Cash Ratio (Qtr) 0.02 0.69
Current Ratio Curr Ratio (Qtr) 0.76 2.88
Debt to Equity Ratio Debt/Equity (Qtr) -9.39 0.22
Interest Cover Ratio Int Coverage (Qtr) 14.72 -110.44
Times Interest Earned Times Interest Earned (Qtr) 14.72 -110.44
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 22.20 -952.44
EBIT Margin % EBIT Margin % (Qtr) 19.38 -997.37
EBT Margin % EBT Margin % (Qtr) 18.06 -987.56
Gross Margin % Gross Margin % (Qtr) 51.50 -122.43
Net Profit Margin % Net Margin % (Qtr) 14.20 -979.78