What Can We Learn From O’Reilly Automotive Inc.(ORLY)’s Valuation Ratios?

O’Reilly Automotive Inc. (NASDAQ:ORLY) finished Friday with an addition of $3.86 to close at $628.99, an upside of 0.62 percent. An average of 276,560 shares of common stock have been traded in the last five days. There was a gain of $18.74 in the past week, and it reached a new high 39 times over the past 12 months. The last 20 days have seen an average of 401,865 shares traded, while the 50-day average volume stands at 403,766.

ORLY stock has increased by 3.64% in the last month. The company shares reached their 1-month lowest point of $592.22 on 09/20/21. With the stock rallying to its 52-week high on 10/15/21, shares of the company touched a low of $424.03 and a high of $629.40 in 52 weeks. It has reached a new high 40 times so far this year and achieved 38.98% or $176.42 in price. In spite of this, the price is down -0.06% from the 52-week high.


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Insider Transactions

52 days have passed since O’Reilly Automotive Inc. (ORLY) last reported insider trading activity. OREILLY DAVID E, who is EV CHAIRMAN OF THE BOARD, most recently acquired $10,000 shares at $605.00 per share on Aug 25. In this transaction, the insider spent $6,050,044. EV CHAIRMAN OF THE BOARD, OREILLY DAVID E, disposed of 5,000 shares at a price of $605.00 on Aug 25. The insider now owns more than $3,025,022 worth of shares. Prior to that, EV CHAIRMAN OF THE BOARD OREILLY DAVID E went on to Sale 10,000 shares at $601.56 each on Aug 19. An amount of $6,015,590 was transacted.

Valuation Metrics

O’Reilly Automotive Inc. (ORLY) has a trailing price-to-earnings (P/E) ratio of 22.57, which compares with the 21.00 for the broader industry and 31.76 for the sector. In the last five years, O’Reilly Automotive Inc.’s PE ratio has ranged between 27.64 and 14.58. The stock’s beta is 1.02. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 3.45, the price-to-book (PB) ratio at 200.96, and the price-to-cash flow ratio at 17.07.

The company has a payout ratio of 0.00%.

The quick ratio of O’Reilly Automotive Inc. for the three months ended June 29 was 0.20, and the current ratio was 0.80, indicating that the company is not able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 17.57 and a total debt to equity ratio of 0.00 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 52.60% against a 5-year average of 52.7%. O’Reilly Automotive Inc.’s EBITDA margin for the year ending June 29 is 23.59%, while its operating margin for the same period stands at 21.80%. Its gross profit as reported stood at $6.09 billion compared to revenue of $11.6 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, O’Reilly Automotive Inc.’s return on assets was 16.80%, compared to 15.6% over the last five years. In the past year, the return on investment has been 44.70%, and the 5-year average is 32.4%. Meanwhile, the return on equity (ROE) for the past 12 months has been 757.30% and the 5-year average holds at 288.6%. For the broader industry, ROE averaged 10.33 over the past year.

Earnings Surprise

For the three-month period that ended June 29, O’Reilly Automotive Inc. had $3.83 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $585.45 million in the quarter, while revenues of $501.61 million were grew 9.19%. The analyst consensus anticipated O’Reilly Automotive Inc.’s latest quarter earnings to come in at $7.56 per share, but it turned out to be $8.33, a 10.20% surprise. For the quarter, EBITDA amounted to $875.88 million. Shareholders own equity worth $68.95 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at O’Reilly Automotive Inc. (ORLY) price momentum. RSI 9-day as of the close on 15 October was 66.84%, suggesting the stock is Neutral, with historical volatility in this time frame at 12.69%.

As of today, ORLY’s price is $616.12 +3.07% or $18.74 from its 5-day moving average. ORLY is currently trading +4.95% higher than its 20-day SMA and +17.61% higher than its 100-day SMA. However, the stock’s current price level is +3.94% above the SMA50 and +39.22% above the SMA200.

The stochastic %K and %D were 77.58% and 60.45%, respectively, and the average true range (ATR) was 10.90. With the 14-day stochastic at 89.39% and the average true range at 10.88, the RSI (14) stands at 62.27%. The stock has reached 8.46 on the 9-day MACD Oscillator while the 14-day reading was at 9.58.

Analyst Ratings

BofA Securities downgraded O’Reilly Automotive Inc. (NASDAQ: ORLY) to a a Neutral rating in its most recent analyst report. Previously, the stock was rated as a a Buy.The consensus rating for O’Reilly Automotive Inc. (ORLY) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell ORLY, while 11 suggest investors hold. There are 1 analyst who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 10 others rate it as a “buy”.

What is ORLY’s price target for the next 12 months?

Analysts predict a range of price targets between $585.00 and $690.00, with a median target of $650.00. Taking a look at these predictions, the average price target given by analysts for O’Reilly Automotive Inc. (ORLY) stock is $649.75.

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