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Why Is O'Reilly Automotive (ORLY) Up 6.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for O'Reilly Automotive (ORLY - Free Report) . Shares have added about 6.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is O'Reilly Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
O'Reilly Q4 Earnings Beat Estimates, Sales Miss
O’Reilly reported fourth-quarter 2023 adjusted earnings per share of $9.26, beating the Zacks Consensus Estimate of $9.07. The bottom line increased from $8.37 per share in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $3,832 million, marginally missing the Zacks Consensus Estimate of $3,838 million. The top line, however, increased 5.2% year over year.
During the quarter, comparable store sales grew 3.4%. The company opened 47 new stores in the United States and Mexico. The total store count was 6,157 as of Dec 31, 2023.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses flared up 6.6% year over year to $1.25 billion. Operating income rose to $718.7 million from $682.2 million generated in the year-ago period. Net income was roughly $552.5 million, up from $528.6 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 0.6 million shares for $560 million at an average price of $922.86 per share. After the end of the quarter until the release date, ORLY repurchased an additional 0.1 million shares of common stock for a total investment of $102 million at an average price of $967.63 per share. As of Feb 7, the company had nearly $2.47 billion remaining under the current share repurchase authorization.
It had cash and cash equivalents of $279.1 million at the end of the reported quarter, up from $108.6 million recorded as of 2022-end. Its long-term debt was $5.57 billion, higher than $4.37 billion as of Dec 31, 2022.
During the reported quarter, O’Reilly generated $516.4 million in cash from operating activities, down from the year-ago period’s $795.2 million. Capital expenditures totaled $252.3 million, rising from $174.5 million in the year-ago period. Free cash flow came in at $256 million, indicating a decline of 40% year over year.
2024 Outlook
For 2024, O’Reilly envisions total revenues in the range of $16.8-$17.1 billion, up from $15.8 billion reported in 2023. Earnings per share are expected in the range of $41.05-$41.55, up from $38.47 reported in 2023. The comparable store sales growth is expected between 3% and 5%. Free cash flow is projected in the band of $1.8-$2.1 billion. Capital expenditures are expected between $900 million and $1 billion. The company intends to open 190-200 stores this year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, O'Reilly Automotive has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, O'Reilly Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is O'Reilly Automotive (ORLY) Up 6.7% Since Last Earnings Report?
A month has gone by since the last earnings report for O'Reilly Automotive (ORLY - Free Report) . Shares have added about 6.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is O'Reilly Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
O'Reilly Q4 Earnings Beat Estimates, Sales Miss
O’Reilly reported fourth-quarter 2023 adjusted earnings per share of $9.26, beating the Zacks Consensus Estimate of $9.07. The bottom line increased from $8.37 per share in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $3,832 million, marginally missing the Zacks Consensus Estimate of $3,838 million. The top line, however, increased 5.2% year over year.
During the quarter, comparable store sales grew 3.4%. The company opened 47 new stores in the United States and Mexico. The total store count was 6,157 as of Dec 31, 2023.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses flared up 6.6% year over year to $1.25 billion. Operating income rose to $718.7 million from $682.2 million generated in the year-ago period. Net income was roughly $552.5 million, up from $528.6 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 0.6 million shares for $560 million at an average price of $922.86 per share. After the end of the quarter until the release date, ORLY repurchased an additional 0.1 million shares of common stock for a total investment of $102 million at an average price of $967.63 per share. As of Feb 7, the company had nearly $2.47 billion remaining under the current share repurchase authorization.
It had cash and cash equivalents of $279.1 million at the end of the reported quarter, up from $108.6 million recorded as of 2022-end. Its long-term debt was $5.57 billion, higher than $4.37 billion as of Dec 31, 2022.
During the reported quarter, O’Reilly generated $516.4 million in cash from operating activities, down from the year-ago period’s $795.2 million. Capital expenditures totaled $252.3 million, rising from $174.5 million in the year-ago period. Free cash flow came in at $256 million, indicating a decline of 40% year over year.
2024 Outlook
For 2024, O’Reilly envisions total revenues in the range of $16.8-$17.1 billion, up from $15.8 billion reported in 2023. Earnings per share are expected in the range of $41.05-$41.55, up from $38.47 reported in 2023. The comparable store sales growth is expected between 3% and 5%. Free cash flow is projected in the band of $1.8-$2.1 billion. Capital expenditures are expected between $900 million and $1 billion. The company intends to open 190-200 stores this year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, O'Reilly Automotive has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, O'Reilly Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.