Why Is O'Reilly Automotive (ORLY) Up 4.8% Since Last Earnings Report?

Core Viewpoint - O'Reilly Automotive has shown a positive performance with a 4.8% increase in shares since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1] Financial Performance - O'Reilly reported Q2 2025 adjusted EPS of 78 cents, slightly above the Zacks Consensus Estimate of 77 cents, and an increase from 70 cents in the prior-year quarter [2] - Quarterly revenues were $4,525 million, missing the Zacks Consensus Estimate of $4,532 million, but reflecting a 6% year-over-year increase [2] - Comparable store sales grew by 4.1%, and the company opened 67 new stores in the U.S. and Mexico, bringing the total store count to 6,483 as of June 30, 2025 [3] Cost and Income Analysis - Selling, general and administrative expenses rose by 8% year-over-year to $1.41 billion, while operating income increased by 6% to $914 million [4] - Net income for the quarter was $668.6 million, up from $622.8 million in the same quarter last year [4] Share Repurchase Activity - O'Reilly repurchased 6.8 million shares for $617 million at an average price of $90.71 per share during the reported quarter [5] - An additional 1.7 million shares were repurchased for $160 million at an average price of $91.45 per share from the end of Q2 until July 23, 2025, with nearly $1.16 billion remaining under the current repurchase authorization [5] Cash Flow and Debt - As of June 30, 2025, O'Reilly had cash and cash equivalents of $198.6 million, up from $145 million a year earlier, while long-term debt increased to $5.82 billion from $5.4 billion [6] - The company generated $1.51 billion in cash from operating activities, down from $1.65 billion in the previous year, with capital expenditures totaling $300.7 million compared to $225.4 million a year ago [7] 2025 Outlook - O'Reilly estimates total revenues for 2025 in the range of $17.5-$17.8 billion, up from the previous estimate of $17.4-$17.7 billion, with EPS expected between $2.85-$2.95 [8] - Comparable store sales are projected to grow by 3-4.5%, an increase from the previous estimate of 2-4%, and free cash flow is anticipated to be between $1.6 billion and $1.9 billion [8] - The company plans to open 200-210 stores this year [8] Market Sentiment and Industry Comparison - Since the earnings release, there has been an upward trend in estimates revision for O'Reilly [9] - The stock currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [12] - O'Reilly operates within the Zacks Automotive - Retail and Wholesale - Parts industry, where Genuine Parts (GPC) has seen a 2.3% gain over the past month, reporting revenues of $6.16 billion, a year-over-year increase of 3.4% [13]