It has been about a month since the last earnings report for O'Reilly Automotive (ORLY Quick QuoteORLY - Free Report) . Shares have added about 0% in that time frame, outperforming the S&P 500.

Will the recent 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 Q3 Earnings Miss Expectations

O’Reilly reported third-quarter 2024 adjusted earnings per share (EPS) of $11.41, which missed the Zacks Consensus Estimate of $11.53. However, the bottom line increased from $10.72 reported in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4.36 billion, missing the Zacks Consensus Estimate of $4.43 billion. The top line, however, increased 3.8% year over year.

During the quarter, comparable store sales grew 1.5%. The company opened 47 new stores in the United States, Mexico and Canada during the quarter. The total store count was 6,291 as of Sept. 30, 2024.

Financials, Share Repurchase & Costs

In the reported quarter, selling, general and administrative expenses rose 7% year over year to $1.35 billion. Operating income remained flat year over year at $897 million. Net income was $665 million, up from $650 million in the year-ago quarter.

During the reported quarter, O’Reilly repurchased 0.5 million shares for $541 million at an average price of $1,084.28 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 $70 million at an average price of $1,170.55 per share. As of Oct. 23, the company had nearly $898 million remaining under the current share repurchase authorization.

It had cash and cash equivalents of $115.6 million at the end of the reported quarter, down from $279.1 million recorded as of 2023-end. Its long-term debt was $5.36 billion, lower than $5.57 billion as of Dec. 31, 2023.

During the reported quarter, O’Reilly generated $772 million in cash from operating activities compared with the year-ago period’s $2.43 billion. Capital expenditures totaled $258.3 million compared with $732.9 million in the year-ago period. Free cash flow was $500 million, down 69.8% year over year.

ORLY’s Updated 2024 Outlook

For 2024, O’Reilly estimates total revenues in the range of $16.6-$16.8 billion, down from the prior guidance of $16.6-$16.9 billion. It now expects earnings per share in the range of $40.60-$41.10, down from the previous estimate of $40.75-$41.25. The outlook for comparable store sales growth was revised downward to 2-3% from 2-4%. The outlook for free cash flow remained unchanged at $1.8-$2.1 billion. Capital expenditure guidance remained unchanged in the range of $900 million to $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 estimates revision.

VGM Scores

At this time, O'Reilly Automotive has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. 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.