How much a stock’s price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you’d invested in O’Reilly Automotive (ORLY) ten years ago? It may not have been easy to hold on to ORLY for all that time, but if you did, how much would your investment be worth today?
O’Reilly Automotive’s Business In-Depth
With that in mind, let’s take a look at O’Reilly Automotive’s main business drivers.
O’Reilly Automotive, Inc. is a leading specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States. Founded in 1957, O’Reilly’s initially operated from a single store in Springfield, MO. The company’s stores offer several services and programs to customers, which include battery diagnostic testing, check engine light code extraction and loaner tool program, among others. The products offered by the company stores are vehicle accessories, such as floor mats and seat cover as well as maintenance items like antifreeze, engine additives, filters, fluids, lighting and wiper blades. Besides these, it provides new as well as remanufactured automotive hard parts like alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts and fuel pumps.
The company sells products to both Do-it-Yourself (DIY) customers and Do-it-for-Me (DIFM) or professional installers. It sells an extensive line of products consisting of new and remanufactured automotive hard parts (such as mufflers, brakes and shock absorbers), maintenance items, accessories, a complete range of auto body paint and related materials, automotive tools and professional service equipment. The company has a track record of over 40 years of following a dual-market strategy by serving both DIY and DIFM customers and is among the top three companies in both the markets.
The automotive aftermarket items industry is a highly competitive industry. O’Reilly’s presence in the market, customer service, product availability, store location, brand recognition price and store location position the company in a competitive position in the market among peers in the industry. The company’s omnichannel growth strategies are focused on offering customers an enhanced and seamless shopping experience through variety of digital and physical channels. The auto retailer has been expanding its physical presence through opening or acquiring stores while maintaining the existing ones. As of Dec 31, 2022, O’Reilly’s total store count was 5,971.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in O’Reilly Automotive a decade ago, you’re probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in May 2013 would be worth $8,478.21, or a 747.82% gain, as of May 4, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 153.39% and the price of gold went up 33.09% over the same time frame.
Analysts are anticipating more upside for ORLY.
O’Reilly has been generating record revenues since 30 consecutive years on the back of growth in auto parts market. For 2023, O’Reilly projects total revenues within $15.2-$15.5 billion, up from $14.41 billion generated in 2022. It is poised to benefit from store openings and distribution centers in profitable regions. O’Reilly’s diverse product portfolio catering to DIY and DIFM customers are driving comps growth. Mayasa Auto Parts buyout, O’Reilly’s first international expansion transaction, bolstered growth prospects. But rising SG&A costs led by store expansion and omni-channel goals are hurting margins. Distribution, labor and logistic bottlenecks are weighing down the firm’s prospects. High debts levels also play a spoilsport. Thus the stock warrants a cautious stance now.
The stock is up 8.54% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 12 higher, for fiscal 2023. The consensus estimate has moved up as well.
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