Core Insights - Zacks Premium offers various tools to help investors navigate the stock market confidently and effectively [1] - The Zacks Style Scores are designed to complement the Zacks Rank, providing additional metrics for stock selection [3][8] Zacks Style Scores - The Zacks Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [4][5][6][7] - Value Score emphasizes finding undervalued stocks based on financial ratios [4] - Growth Score assesses stocks based on their future earnings and financial health [5] - Momentum Score identifies stocks with favorable price trends and earnings outlooks [6] - VGM Score combines all three styles to provide a comprehensive evaluation of stocks [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors in stock selection [8] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.86% since 1988, significantly outperforming the S&P 500 [9] - There are over 800 stocks rated 1 and 2, which can be overwhelming for investors [9] Stock Example: Advance Auto Parts (AAP) - Advance Auto Parts operates in the U.S. automotive aftermarket, selling replacement parts and accessories [12] - AAP holds a 3 (Hold) rating on the Zacks Rank, with a VGM Score of A and a Momentum Style Score of A [13] - AAP's shares have increased by 22.3% over the past four weeks, with positive earnings estimate revisions for fiscal 2026 [13] - AAP's average earnings surprise stands at +56%, making it a noteworthy stock for investors [13][14]

Company Overview - O'Reilly Automotive, Inc. (ORLY) is a leading automotive aftermarket retailer based in Springfield, Missouri, with a market valuation of approximately $78.3 billion, providing replacement parts, maintenance supplies, tools, equipment, and private-label products to professional repair shops and do-it-yourself customers [1] Stock Performance - Over the past 52 weeks, O'Reilly's shares have increased nearly 9%, slightly underperforming the S&P 500 Index, which gained 11.7% during the same period [1] - Year-to-date (YTD), O'Reilly's stock has risen 3.3%, outperforming the broader index's modest increase [1] - The State Street Consumer Discretionary Select Sector SPDR ETF (XLY) rose 2.8% over the last 52 weeks but fell 2.7% YTD, indicating O'Reilly's relative stability amid sector volatility [2] Q4 Fiscal 2025 Earnings - In Q4 fiscal 2025, O'Reilly reported a revenue increase of 7.8% year-over-year to $4.41 billion, aligning closely with the analyst estimate of $4.39 billion [5] - Earnings per share (EPS) for the quarter was $0.71, slightly below the $0.72 estimate, but represented a 12.7% growth from the previous year [5] Comparable Store Sales and Future Guidance - Comparable store sales increased by 5.6% in Q4, leading to a full-year 2025 comparable sales growth of 4.7%, reaching the high end of revised guidance [6] - For fiscal 2026, management has guided EPS to a range of $3.10 to $3.20, indicating a midpoint growth of 6.1% over 2025 [6] - The company plans to open 225 to 235 net new stores in 2026, including expansion into Canada [6] Analyst Ratings and Expectations - For the full fiscal year 2026, analysts expect diluted EPS to grow 8.1% year-over-year to $3.21 [7] - O'Reilly has consistently operated within a close range of expectations, beating EPS estimates in two of the past four quarters and missing in the other two [7] - Wall Street maintains an overall "Strong Buy" rating for ORLY stock, with 20 out of 28 analysts recommending "Strong Buy," three suggesting "Moderate Buy," and five calling for "Hold" [7][8]

Company Overview - Advance Auto Parts, Inc. operates in the U.S. automotive aftermarket industry, focusing on selling replacement parts, accessories, batteries, and maintenance items for various vehicles [11] - The company serves both do-it-yourself (DIY) customers and professional installers, as well as independently owned operators, making it a leading automotive parts provider in North America [11] Zacks Rank and Style Scores - Advance Auto Parts is currently rated 3 (Hold) on the Zacks Rank, indicating a neutral outlook [12] - The company has a VGM Score of B, reflecting a favorable combination of value, growth, and momentum characteristics [12] - The Value Style Score is also rated B, supported by attractive valuation metrics such as a forward P/E ratio of 20.59, which may appeal to value investors [12] Earnings Estimates - In the last 60 days, five analysts have revised their earnings estimates upwards for fiscal 2026, with the Zacks Consensus Estimate increasing by $0.02 to $2.72 per share [12] - Advance Auto Parts has demonstrated an average earnings surprise of +56%, indicating a strong performance relative to expectations [12] Investment Consideration - With a solid Zacks Rank and top-tier Value and VGM Style Scores, Advance Auto Parts is suggested to be on investors' short list for potential investment opportunities [13]

Company Overview - LKQ Corporation has a market cap of $8.6 billion and is a global distributor of replacement parts, components, and systems for vehicle repair and maintenance, serving various sectors including collision and mechanical repair shops, dealerships, and retail customers [1] Financial Performance - LKQ is expected to announce its fiscal Q4 2025 results soon, with analysts forecasting an adjusted EPS of $0.65, which represents an 18.8% decline from $0.80 in the same quarter last year [2] - For fiscal 2025, analysts predict an adjusted EPS of $3.10, down 10.9% from $3.48 in fiscal 2024, but anticipate a year-over-year growth of 5.5% to $3.27 in fiscal 2026 [3] Stock Performance - Over the past 52 weeks, LKQ shares have declined by 12.7%, underperforming the S&P 500 Index, which gained 16.9%, and the State Street Consumer Discretionary Select Sector SPDR ETF, which rose by 8.2% [4] - On October 30, shares of LKQ rose by 3.7% after reporting Q3 2025 adjusted EPS of $0.84, exceeding consensus estimates, and showing strong segment performances, particularly in Europe and Specialty [5] Analyst Ratings - The consensus view on LKQ stock is cautiously optimistic, with a "Moderate Buy" rating overall; among 10 analysts, six recommend "Strong Buy," one suggests "Moderate Buy," and three indicate "Hold" [6] - The average analyst price target for LKQ Corporation is $41.19, indicating a potential upside of 22.9% from current levels [6]

Industry Overview - The Zacks Automotive - Retail and Wholesale - Parts industry involves retailing, distribution, and installation of vehicle parts and accessories, with options for consumers to choose between DIY and DIFM services [2] - The industry is highly competitive and is undergoing significant changes due to evolving customer expectations and technological innovations [2] Key Growth Drivers - The average age of vehicles in the U.S. has reached a record high of 12.6 years, increasing demand for auto parts as older vehicles require more maintenance [3] - Modern vehicles are becoming more complex, leading consumers to prefer professional repair services, thus boosting the DIFM segment [4] - Auto parts dealers are expanding through acquisitions and digital platforms, enhancing market presence and operational efficiency [5] Electric Vehicle Market Impact - U.S. EV sales reached a record 607,089 units in the first half of 2025, marking a 1.5% year-over-year increase, which is expected to provide a boost to auto parts retailers, especially those with EV-specific components [6] Industry Performance - The Zacks Auto Retail & Wholesale Parts industry ranks 63, placing it in the top 26% of 245 Zacks industries, indicating solid near-term prospects [7][8] - Over the past year, the industry has outperformed both the Auto, Tires and Truck sector and the S&P 500, with a growth of 17% compared to the S&P 500's 13% [10] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 27.27X, higher than the S&P 500's 17.7X and the sector's 21.01X [13] - The industry's EV/EBITDA ratio has fluctuated between 21.41X and 28.32X over the past five years, with a median of 24.67X [14] Company Highlights - **Advance Auto Parts (AAP)**: Focuses on selling replacement parts and has bolstered liquidity through the sale of its Worldpac business for $1.5 billion. The company aims to streamline operations and reduce costs through supply chain consolidation [18] - Advance Auto carries a Zacks Rank 2 (Buy), with a projected EPS growth of 752% year-over-year for 2025 [19] - **O'Reilly Automotive (ORLY)**: A leading player in the aftermarket auto parts space, known for 32 consecutive years of revenue growth. The company plans to increase inventory levels and has committed to share repurchases totaling $2.08 billion in 2024 [22] - O'Reilly Automotive holds a Zacks Rank 3 (Hold), with projected EPS growth of 5.4% for 2025 [23]