Taking everything into account, ORLY scores 5 out of 10 in our fundamental rating. ORLY was compared to 122 industry peers in the Specialty Retail industry. While ORLY belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ORLY is valied quite expensively at the moment, while it does show a decent growth rate.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ORLY was profitable.
In the past year ORLY had a positive cash flow from operations.
ORLY had positive earnings in each of the past 5 years.
ORLY had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 15.26%, ORLY belongs to the top of the industry, outperforming 93.39% of the companies in the same industry.
ORLY has a better Return On Invested Capital (34.84%) than 99.17% of its industry peers.
ORLY had an Average Return On Invested Capital over the past 3 years of 40.10%. This is significantly above the industry average of 12.24%.
The last Return On Invested Capital (34.84%) for ORLY is well below the 3 year average (40.10%), which needs to be investigated, but indicates that ORLY had better years and this may not be a problem.

		Industry Rank	Sector Rank
ROA	15.26%
ROE	N/A
ROIC	34.84%

ROA(3y)16.72%

ROA(5y)16.75%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)40.1%

ROIC(5y)37.89%

1.3 Margins

ORLY's Profit Margin of 14.22% is amongst the best of the industry. ORLY outperforms 96.69% of its industry peers.
In the last couple of years the Profit Margin of ORLY has remained more or less at the same level.
Looking at the Operating Margin, with a value of 19.30%, ORLY belongs to the top of the industry, outperforming 96.69% of the companies in the same industry.
ORLY's Operating Margin has been stable in the last couple of years.
ORLY's Gross Margin of 51.47% is fine compared to the rest of the industry. ORLY outperforms 78.51% of its industry peers.
ORLY's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	19.3%
PM (TTM)	14.22%
GM	51.47%

OM growth 3Y-3.98%

OM growth 5Y0.56%

PM growth 3Y-4.2%

PM growth 5Y0.83%

GM growth 3Y-0.94%

GM growth 5Y-0.75%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so ORLY is creating value.
Compared to 1 year ago, ORLY has less shares outstanding
ORLY has less shares outstanding than it did 5 years ago.
The debt/assets ratio for ORLY has been reduced compared to a year ago.

2.2 Solvency

An Altman-Z score of 4.32 indicates that ORLY is not in any danger for bankruptcy at the moment.
ORLY's Altman-Z score of 4.32 is amongst the best of the industry. ORLY outperforms 84.30% of its industry peers.
ORLY has a debt to FCF ratio of 3.79. This is a good value and a sign of high solvency as ORLY would need 3.79 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.79, ORLY is in the better half of the industry, outperforming 71.90% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	3.79
Altman-Z	4.32

ROIC/WACC3.63

WACC9.6%

2.3 Liquidity

ORLY has a Current Ratio of 0.76. This is a bad value and indicates that ORLY is not financially healthy enough and could expect problems in meeting its short term obligations.
ORLY has a Current ratio of 0.76. This is amonst the worse of the industry: ORLY underperforms 86.78% of its industry peers.
ORLY has a Quick Ratio of 0.76. This is a bad value and indicates that ORLY is not financially healthy enough and could expect problems in meeting its short term obligations.
ORLY has a Quick ratio of 0.11. This is amonst the worse of the industry: ORLY underperforms 95.04% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.76
Quick Ratio	0.11

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ORLY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.12%.
Measured over the past years, ORLY shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.85% on average per year.
Looking at the last year, ORLY shows a small growth in Revenue. The Revenue has grown by 6.19% in the last year.
The Revenue has been growing by 10.48% on average over the past years. This is quite good.

EPS 1Y (TTM)7.12%

EPS 3Y9.35%

EPS 5Y17.85%

EPS Q2Q%11.74%

Revenue 1Y (TTM)6.19%

Revenue growth 3Y7.83%

Revenue growth 5Y10.48%

Sales Q2Q%7.82%

3.2 Future

ORLY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.79% yearly.
The Revenue is expected to grow by 5.86% on average over the next years.

EPS Next Y11.91%

EPS Next 2Y11.58%

EPS Next 3Y11.16%

EPS Next 5Y9.79%

Revenue Next Year6.61%

Revenue Next 2Y6.69%

Revenue Next 3Y6.52%

Revenue Next 5Y5.86%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 34.34, the valuation of ORLY can be described as expensive.
ORLY's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of ORLY to the average of the S&P500 Index (27.21), we can say ORLY is valued slightly more expensively.
A Price/Forward Earnings ratio of 29.40 indicates a quite expensive valuation of ORLY.
The rest of the industry has a similar Price/Forward Earnings ratio as ORLY.
ORLY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	34.34
Fwd PE	29.4

4.2 Price Multiples

ORLY's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ORLY is on the same level as its industry peers.

		Industry Rank	Sector Rank
P/FCF	53.6
EV/EBITDA	23.12

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of ORLY may justify a higher PE ratio.