Where Will O'Reilly Automotive Be in 1 Year?

Core Viewpoint - O'Reilly Automotive is a leading player in the aftermarket auto parts industry, demonstrating strong historical performance despite not being at the forefront of technological innovation or rapid growth [1]. Financial Performance - In 2025, O'Reilly shares increased by 15.4%, slightly below the S&P 500's 16.4% return [2]. - The company has achieved a compound annual growth rate of net income of 11.9% from 2014 to 2024, indicating consistent profitability [8]. - Earnings per share are projected to grow by 8.8% in 2025 and 11.4% in 2026, reflecting ongoing financial strength [11]. Market Position and Strategy - O'Reilly is set to report its 33rd consecutive year of positive same-store sales growth in 2025, showcasing its resilience in various economic conditions [6]. - The company plans to open 200 to 210 net new locations by the end of 2025, with a target of 230 new locations in 2026, capitalizing on the fragmented nature of the industry [7]. - O'Reilly does not pay dividends but has been actively repurchasing shares, spending $1.6 billion on buybacks in the first nine months of 2025, and reducing the diluted outstanding share count by 44% over the last decade [9][10]. Valuation and Market Sentiment - Since late 2020, O'Reilly shares have appreciated by 201%, significantly outperforming the S&P 500, although this has been aided by a 56% increase in the price-to-earnings (P/E) ratio, which currently stands at 31.7 [12]. - While earnings growth is expected to continue, market sentiment can significantly influence investor returns, as valuation changes may overshadow profit growth [13].