Latest news with #OReillyAutomotive
Yahoo
8 hours ago
- Automotive
- Yahoo
This Stock Is Up 55,000% Since Its IPO: Here's 1 Reason It Could Still Be a Smart Buy
O'Reilly Automotive is one of the top retailers in the auto parts space, where it benefits from durable tailwinds that support steady demand. Same-store sales increased by 2.9% in 2024, continuing an impressive 32-year growth streak. Management has continued to aggressively repurchase shares despite the stock's rising valuation. 10 stocks we like better than O'Reilly Automotive › History may not always repeat, but the past can serve as a guide. For investors, looking at previous market winners might help us identify stocks that could outperform from here. In that vein, consider a leading niche retailer that usually flies under the radar. As of this writing, this retailer's stock is up by more than 55,000% since its initial public offering in April 1993. In just the last five years, it's up by 213%. Yet even after those monster gains, there's one reason why it could still be a smart buy. The modern world is constantly being reshaped by the forces of cutting-edge technology -- cloud computing, AI, digital payments, and e-commerce to name just a few. And those technologies are providing serious tailwinds to many of the businesses connected to them. O'Reilly Automotive's (NASDAQ: ORLY) business doesn't fall into any of these high-tech buckets. However, one understated tailwind will continue to benefit this aftermarket auto parts retailer. A recent report released by S&P Global showed that the average age of vehicles on the road in the U.S. is now 12.8 years. This figure has climbed for eight straight years. While that secular trend may not be as exciting as the others mentioned, it will be a reliable boon for O'Reilly. It sells various products, including motor oil, air filters, brake pads, floor mats, and batteries, among many other things, to both do-it-yourselfers and professional mechanics. Aftermarket is the key thing investors should remember -- these are products that aren't usually made by the original car manufacturers. Consumers shop at O'Reilly to extend the lives of their vehicles. The greater the mileage is on a car, the more upkeep it will require. Natural wear and tear isn't hard to understand. But most car warranties expire after three to five years, after which whatever goes wrong is strictly the owner's problem. As cars stay on the road for more years and more miles, demand gets stronger for the stuff that O'Reilly sells. The macroeconomic environment is also helping the retailer. With interest rates on auto loans at some of their highest levels in the past decade and other material and labor costs up as well, buying a car is less affordable. This incentivizes people to spend money on repairing the vehicles they already own. These trends have shown up in O'Reilly's financial performance. In 2024, the company reported a same-store sales increase of 2.9%. That was its 32nd straight year of growth, which is unheard of for any retailer. This demonstrates the company's ability to thrive regardless of economic conditions. There's a lot to like about this company. Steady demand that propels revenue and earnings higher is undoubtedly one reason that O'Reilly should be on your investing radar. Management has also aggressively used its free cash flow to buy back stock. In the past five years, O'Reilly has reduced its outstanding share count by 24%. However, the valuation isn't cheap, and that's my main concern. Its current price-to-earnings ratio of 32.8 is 36% higher than its trailing 10-year average, so I'm waiting for this multiple to come down before I even consider adding O'Reilly to my portfolio. But given the company's impressive track record, other investors might have a different view. Before you buy stock in O'Reilly Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and O'Reilly Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $704,676!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $950,198!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 175% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends S&P Global. The Motley Fool has a disclosure policy. This Stock Is Up 55,000% Since Its IPO: Here's 1 Reason It Could Still Be a Smart Buy was originally published by The Motley Fool
Globe and Mail
19 hours ago
- Automotive
- Globe and Mail
This Stock Is Up 55,000% Since Its IPO: Here's 1 Reason It Could Still Be a Smart Buy
History may not always repeat, but the past can serve as a guide. For investors, looking at previous market winners might help us identify stocks that could outperform from here. In that vein, consider a leading niche retailer that usually flies under the radar. As of this writing, this retailer's stock is up by more than 55,000% since its initial public offering in April 1993. In just the last five years, it's up by 213%. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Yet even after those monster gains, there's one reason why it could still be a smart buy. A favorable tailwind that drives demand The modern world is constantly being reshaped by the forces of cutting-edge technology -- cloud computing, AI, digital payments, and e-commerce to name just a few. And those technologies are providing serious tailwinds to many of the businesses connected to them. O'Reilly Automotive 's(NASDAQ: ORLY) business doesn't fall into any of these high-tech buckets. However, one understated tailwind will continue to benefit this aftermarket auto parts retailer. A recent report released by S&P Global showed that the average age of vehicles on the road in the U.S. is now 12.8 years. This figure has climbed for eight straight years. While that secular trend may not be as exciting as the others mentioned, it will be a reliable boon for O'Reilly. It sells various products, including motor oil, air filters, brake pads, floor mats, and batteries, among many other things, to both do-it-yourselfers and professional mechanics. Aftermarket is the key thing investors should remember -- these are products that aren't usually made by the original car manufacturers. Consumers shop at O'Reilly to extend the lives of their vehicles. More mileage means more upkeep The greater the mileage is on a car, the more upkeep it will require. Natural wear and tear isn't hard to understand. But most car warranties expire after three to five years, after which whatever goes wrong is strictly the owner's problem. As cars stay on the road for more years and more miles, demand gets stronger for the stuff that O'Reilly sells. The macroeconomic environment is also helping the retailer. With interest rates on auto loans at some of their highest levels in the past decade and other material and labor costs up as well, buying a car is less affordable. This incentivizes people to spend money on repairing the vehicles they already own. These trends have shown up in O'Reilly's financial performance. In 2024, the company reported a same-store sales increase of 2.9%. That was its 32nd straight year of growth, which is unheard of for any retailer. This demonstrates the company's ability to thrive regardless of economic conditions. O'Reilly is a winner, but can the good times continue? There's a lot to like about this company. Steady demand that propels revenue and earnings higher is undoubtedly one reason that O'Reilly should be on your investing radar. Management has also aggressively used its free cash flow to buy back stock. In the past five years, O'Reilly has reduced its outstanding share count by 24%. However, the valuation isn't cheap, and that's my main concern. Its current price-to-earnings ratio of 32.8 is 36% higher than its trailing 10-year average, so I'm waiting for this multiple to come down before I even consider adding O'Reilly to my portfolio. But given the company's impressive track record, other investors might have a different view. Should you invest $1,000 in O'Reilly Automotive right now? Before you buy stock in O'Reilly Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and O'Reilly Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $704,676!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $950,198!* Now, it's worth noting Stock Advisor 's total average return is1,048% — a market-crushing outperformance compared to175%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends S&P Global. The Motley Fool has a disclosure policy.
Yahoo
4 days ago
- Automotive
- Yahoo
Is O'Reilly Automotive Stock a Millionaire Maker?
O'Reilly Automotive is a fast-growing auto parts retailer. The company is facing rising costs that have crimped net income. O'Reilly has seen many notable stock price pullbacks in its history. 10 stocks we like better than O'Reilly Automotive › Shares of O'Reilly Automotive (NASDAQ: ORLY) have risen more than 200% over the past five years. They have gained over 400% over the past decade. And over the past year alone the stock has rallied 25%, handily beating the S&P 500 index's (SNPINDEX: ^GSPC) gain of just under 10%. Given that stellar stock price performance, it is understandable that investors might be looking at the auto parts retailer. But is O'Reilly Automotive a millionaire-maker stock? Here's some things to consider before you buy. As noted, O'Reilly Automotive is an auto parts retailer, selling vehicle supplies to consumers and professionals. The auto sector is a mature industry, so competition is pretty intense. This is noteworthy because there are really only two ways to grow a retail store business. You can either increase sales at the stores you currently operate, known as same-store sales, or you can open new stores. Both, basically, have to pull customers from other competitors. With regard to same-store sales, O'Reilly has been doing reasonably well lately. Same-store sales in the first quarter of 2025 rose 3.6%. On the second point, the company opened 38 new stores. The combination led to a top-line advance of 4%. Earning per share rose 2%, but there's a little nuance here. Net income was down 2%; the only reason earnings per share grew was because the company's share count fell thanks to a stock buyback. The big problem right now is rising costs, particularly on the employee front. That inflation is hampering the company's growth and investors have noticed, with the shares having pulled back a little from recent highs. That said, O'Reilly isn't pulling back on its long-term growth aspirations, with plans to open as many as 210 new locations in 2025. It believes that same-store sales will increase between 2% and 4%. O'Reilly has executed well for years, so there's no reason to believe it can't achieve those two goals. But the need to rely on a stock buyback to spur earnings growth in the first quarter isn't a positive sign. The big problem with O'Reilly Automotive right now is that it is historically expensive. To put some numbers on that, the company's price-to-sales and price-to-earnings ratios are both well above their five-year averages. And while the stock price has pulled back of late, the decline is less than 10% and that modest drawdown is from the stock's all-time high. So investors looking at O'Reilly Automotive today have to consider both the business and the price they are paying for that business. To paraphrase famed value investor Benjamin Graham, even a great company can be a bad investment if you pay too much for it. Right now, O'Reilly Automotive looks like it is facing some business difficulties in a very competitive industry and, at the same time, the stock appears to still be quite expensive. In other words, it is hard to suggest that buying O'Reilly Automotive today will help to quickly build your nest egg to seven figures. That's not to suggest that the company can't work through the current headwinds, leading to the stock heading higher again. But there could be a period of weakness here as management deals with the cost issues it is facing. You might have to live through an even deeper pullback if you buy it now, noting that the chart above shows that 25%, or larger, drawdowns are pretty common for O'Reilly Automotive's stock. All in, O'Reilly Automotive is a well-run retailer with a stock that still appears to be pricing in a lot of good news. That remains true even as the company is facing cost pressures that have limited its earnings growth. If the company continues to execute as well as it has historically, the stock could continue to be a strong performer over the long term. And that would make it worth buying and holding. However, if you aren't willing to sit through a deep pullback, like the ones that have commonly happened in the past, you will probably be better off waiting. A pullback of 25%, more than twice the current drawdown, would be a better entry point for most investors. Before you buy stock in O'Reilly Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and O'Reilly Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $883,692!* Now, it's worth noting Stock Advisor's total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Is O'Reilly Automotive Stock a Millionaire Maker? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17-06-2025
- Automotive
- Yahoo
The Stock Is Up Almost 56,000% and Is Still a Buy
O'Reilly Automotive has been a huge success story since its founding in 1957. The company faces some challenges today, notably including the potential negative impact of tariffs. This stock remains a great pick for long-term investors. 10 stocks we like better than O'Reilly Automotive › Imagine investing $10,000 in a stock, then you sit back and watch the stock climb. Years go by, then decades. You check your portfolio balance: It's more than $5.5 million. No imagination is required for such a lucrative outcome if you invested $10,000 in O'Reilly Automotive (NASDAQ: ORLY) at its initial public offering in April 1993. This stock is up almost 56,000% and is still a buy. If you're like me, you can't think about O'Reilly Automotive without hearing the lyrics to its jingle in your head, "Oh, oh, oh, O'Reilly... auto parts!" The auto parts retailer's growth through the years warrants a few "ohs." Charles F. O'Reilly and his son, Charles H. "Chub" O'Reilly, Sr., launched O'Reilly Automotive in 1957. They started out with one store in Springfield, Missouri. Today, O'Reilly ranks as one of the largest automotive specialty retailers in the U.S., with a market cap of nearly $77 billion. The company operates 6,416 stores in 48 U.S. states, Puerto Rico, Canada, and Mexico. O'Reilly serves both the do-it-yourself (DIY) and professional service-provider markets. Last year, roughly 52% of the company's sales came from DIY customers, with the remaining 48% from professional customers. The company's growth, though, has stemmed more from professional service-provider customers. The fragmentation in this market has provided a bigger opportunity for consolidation. This successful track record has continued in 2025. O'Reilly stock is up by a double-digit percentage year to date and remained in positive territory even when the overall stock market plunged. Don't conclude that O'Reilly Automotive doesn't face any challenges, though. The company's net income in the first quarter of 2025 decreased 2% year over year, primarily due to higher selling, general, and administrative (SG&A) expenses. O'Reilly president Brent Kirby said in the Q1 earnings call that the higher-than-expected SG&A costs were partly due to higher payroll and benefit costs, as well as higher maintenance expenses for some of its stores. Kirby thinks the SG&A pressure seen in Q1 should be temporary but acknowledged, "[W]e are cognizant of the potential for incremental impacts to our cost structure, should we see an accelerated inflationary environment more broadly in the economy." That comment about higher inflation in the economy was probably an indirect reference to the potential impact of President Trump's tariffs. O'Reilly CEO Brad Beckham addressed tariffs head-on in his comments in the company's Q1 press release, stating, "The changing tariff landscape brings with it a high degree of uncertainty, and the fluid nature of the implementation of tariff adjustments makes it difficult for us to predict the impact to our business and our customers." The steep tariffs on Chinese imports to the U.S. could be especially problematic for O'Reilly. Around one-fourth of the products the company sells come from China. Despite these challenges, I think O'Reilly Automotive is still a great stock for long-term investors to buy. Will it deliver another 57,000% gain over the next few decades? Probably not. However, O'Reilly could still be a solid winner for two main reasons. First, more miles are being driven on older cars. The demand for aftermarket parts, supplies, equipment, and accessories will almost certainly grow as a result. Second, O'Reilly has captured only a small fraction of its total addressable market, even with its tremendous success through the years. Beckham said in the company's Q1 call, "We believe we still have a ton of opportunity, and we intend to take market share both aggressively and profitably." I think Beckham was right about the magnitude of O'Reilly's opportunity. And I think the company's track record shows that it can achieve the goal of expanding its market share. Before you buy stock in O'Reilly Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and O'Reilly Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $660,821!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $886,880!* Now, it's worth noting Stock Advisor's total average return is 791% — a market-crushing outperformance compared to 174% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Stock Is Up Almost 56,000% and Is Still a Buy was originally published by The Motley Fool
Yahoo
10-06-2025
- Business
- Yahoo
Wall Street's Biggest Stock Split of the Year Has Arrived -- and This 57,000%-Gainer Can Head Significantly Higher
Though stock splits come in two varieties -- forward and reverse -- investors gravitate to one far more than the other. Three high-profile companies have announced stock splits in 2025, with Fastenal being the first to conduct a forward split. The largest stock split of 2025 comes from a company that's firing on all cylinders thanks to macro and company-specific catalysts. 10 stocks we like better than O'Reilly Automotive › For more than two years, artificial intelligence (AI) has been the buzziest trend on Wall Street. The seemingly limitless ceiling associated with AI-driven software and systems has encouraged investors to pile into AI-fueled tech stocks. But artificial intelligence isn't the only trend that investors have gravitated to recently. Excitement surrounding stock splits in some of Wall Street's most-influential businesses is another reason the market's major stock indexes achieved all-time highs in either late 2024 or early 2025. A stock split is an event that allows a publicly traded company to superficially adjust its share price and outstanding share count by the same magnitude. The "superficial" aspect pertains to this action not impacting a company's market cap or underlying operating performance. Although splits come in two forms -- forward and reverse -- they're viewed quite differently by the investing public. Reverse splits are usually frowned upon by investors. This type of split, which is angled at increasing a company's share price, is almost always undertaken by struggling businesses that are attempting to avoid being delisted by a major U.S. stock exchange. Conversely, forward stock splits are fewer and far between, but typically adored by investors. A forward split lowers a company's share price to make it more nominally affordable for investors who lack access to fractional-share purchasing through their broker. If a company has to reduce its share price to make it easier for retail investors to purchase whole shares, it's clearly doing something right. Last year, more than a dozen leading businesses conducted a stock split, and all but one was of the forward variety. This included four prominent AI stocks, such as Nvidia, as well as a number of brand-name, consumer-facing businesses, like Chipotle Mexican Grill. In 2025, only three high-profile forward stock splits have been announced. However, the biggest of these stock splits is official as of today, June 10. One of the odd quirks about stock splits is that being the first to announce your intent to perform a split doesn't mean you'll be the first company to officially do so. Wholesale industrial and construction supplies company Fastenal (NASDAQ: FAST) was the last of the aforementioned three high-profile companies to announce its intention to conduct a forward split this year. However, it was the first of the three to complete its action, with a 2-for-1 split occurring after trading came to a close on May 21. Fastenal splitting its stock is nothing new. In fact, it's become part of management's culture, with the May 21 forward split marking the ninth time in 37 years the company has made its shares more easily accessible to everyday investors. While Fastenal has continually delivered over the long run by cementing itself as a key player in industrial supply chains, as well as through its innovation, it's not exactly a cheap stock at the moment. It's also not the biggest stock-split stock of 2025. Prior to the opening bell on June 10, auto parts supplier O'Reilly Automotive (NASDAQ: ORLY) will have implemented a 15-for-1 forward split (the largest in the company's storied history). Instead of retail investors having to pony up $1,400 to purchase a single share of O'Reilly stock, it'll now cost a little over $90 per share. Though O'Reilly announced its intention to split in mid-March, its board presented the measure for vote at the company's annual shareholder meeting in mid-May. This differs from Fastenal, which didn't put its stock-split measure up for vote. Since its initial public offering (IPO) in 1993, shares of O'Reilly Automotive have vaulted higher by more than 57,000%! These gains didn't occur by accident, and by no means does this supercharged return mark a top for the company's stock. Rather, O'Reilly Automotive appears to be hitting its stride. One of the reasons shares have skyrocketed is because drivers are hanging onto their vehicles longer than ever before. In the latest annual report from S&P Global Mobility, a division of the well-known S&P Global, the average age of cars and light trucks on U.S. roadways increased to an all-time high of 12.8 years. This is up from an average age of 11.1 years in 2012. To add further context, the average interest rate for a 60-month auto loan for a new vehicle purchase has effectively doubled since late 2021. With the cost for a new vehicle rapidly rising, drivers and businesses are incented to hang onto what they already own. This is fantastic news for O'Reilly and its peers, which are being tasked with keeping aging vehicles running in tip-top condition. But there are company-specific variables at play, too. For instance, O'Reilly's hub-and-spoke distribution model is meeting the needs of drivers and mechanics across the country. The company's 31 distribution centers are surrounded by nearly 400 hub stores that can get more than 153,000 stock keeping units (SKUs) to customers on a same-day or overnight basis. This ensures that virtually all parts or accessories are within reach, as well as keeps customers and mechanics loyal to the brand. O'Reilly Automotive's board has also taken a page out of rival AutoZone's book and implemented one of Wall Street's leading share-repurchase programs. Since kicking off its buyback initiative in 2011, O'Reilly has spent more than $25.9 billion to retire approximately 59.4% of its outstanding shares. When a company is delivering record sales and profits year after year, a declining outstanding share count all but ensures that buybacks are boosting earnings per share. In other words, this aggressive repurchase program is making its stock more fundamentally attractive to value investors. While O'Reilly's forward price-to-earnings ratio of 27 is toward the higher end of its historic range, the persistent aging of America's vehicles, the nimbleness of the company's supply chain, and its ongoing buyback program, all suggest shares can head notably higher over the long run. Before you buy stock in O'Reilly Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and O'Reilly Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor's total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Nvidia, and S&P Global. The Motley Fool recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. Wall Street's Biggest Stock Split of the Year Has Arrived -- and This 57,000%-Gainer Can Head Significantly Higher was originally published by The Motley Fool Sign in to access your portfolio
