Overall ORLY gets a fundamental rating of 5 out of 10. We evaluated ORLY against 122 industry peers in the Specialty Retail industry. While ORLY has a great profitability rating, there are some minor concerns on its financial health. ORLY is quite expensive at the moment. It does show a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ORLY had positive earnings in the past year.
ORLY had a positive operating cash flow in the past year.
Each year in the past 5 years ORLY has been profitable.
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 93.44% of the companies in the same industry.
ORLY's Return On Invested Capital of 34.84% is amongst the best of the industry. ORLY outperforms 99.18% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ORLY is significantly above the industry average of 12.24%.
The 3 year average ROIC (40.10%) for ORLY is well above the current ROIC(34.84%). The reason for the recent decline needs to be investigated.

		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 has a better Profit Margin (14.22%) than 96.72% of its industry peers.
In the last couple of years the Profit Margin of ORLY has remained more or less at the same level.
The Operating Margin of ORLY (19.30%) is better than 96.72% of its industry peers.
In the last couple of years the Operating Margin of ORLY has remained more or less at the same level.
Looking at the Gross Margin, with a value of 51.47%, ORLY is in the better half of the industry, outperforming 77.87% of the companies in the same industry.
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

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), ORLY is creating value.
ORLY has less shares outstanding than it did 1 year ago.
ORLY has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ORLY has an improved debt to assets ratio.

2.2 Solvency

ORLY has an Altman-Z score of 4.38. This indicates that ORLY is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.38, ORLY belongs to the top of the industry, outperforming 84.43% of the companies in the same industry.
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 71.31% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	3.79
Altman-Z	4.38

ROIC/WACC3.65

WACC9.55%

2.3 Liquidity

A Current Ratio of 0.76 indicates that ORLY may have some problems paying its short term obligations.
ORLY has a worse Current ratio (0.76) than 86.89% 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 worse Quick ratio (0.11) than 95.08% 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

The Earnings Per Share has been growing slightly by 7.12% over the past year.
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.
ORLY shows a small growth in Revenue. In the last year, the Revenue has grown by 6.19%.
ORLY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.48% yearly.

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

Based on estimates for the next years, ORLY will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.79% on average per year.
Based on estimates for the next years, ORLY will show a small growth in Revenue. The Revenue will grow by 5.86% on average per year.

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

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

ORLY is valuated quite expensively with a Price/Earnings ratio of 35.08.
ORLY's Price/Earnings is on the same level as the industry average.
ORLY's Price/Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 28.60.
With a Price/Forward Earnings ratio of 30.04, ORLY can be considered very expensive at the moment.
ORLY's Price/Forward Earnings is on the same level as the industry average.
ORLY is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	35.08
Fwd PE	30.04

4.2 Price Multiples

ORLY's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as ORLY.

		Industry Rank	Sector Rank
P/FCF	54.75
EV/EBITDA	23.59

4.3 Compensation for Growth

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