We assign a fundamental rating of 5 out of 10 to ORLY. ORLY was compared to 122 industry peers in the Specialty Retail industry. ORLY has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, ORLY is valued expensive at the moment.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ORLY had positive earnings in the past year.
In the past year ORLY had a positive cash flow from operations.
ORLY had positive earnings in each of the past 5 years.
In the past 5 years ORLY always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of ORLY (15.26%) is better than 93.44% of its industry peers.
With an excellent Return On Invested Capital value of 34.84%, ORLY belongs to the best of the industry, outperforming 99.18% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ORLY is significantly above the industry average of 12.24%.
The last Return On Invested Capital (34.84%) for ORLY is well below the 3 year average (40.10%), which needs to be investigated, but indicates that ORLY had better years and this may not be a problem.

		Industry Rank	Sector Rank
ROA	15.26%
ROE	N/A
ROIC	34.84%

ROA(3y)16.72%

ROA(5y)16.75%

ROE(3y)N/A

ROE(5y)N/A

ROIC(3y)40.1%

ROIC(5y)37.89%

1.3 Margins

With an excellent Profit Margin value of 14.22%, ORLY belongs to the best of the industry, outperforming 96.72% of the companies in the same industry.
ORLY's Profit Margin has been stable in the last couple of years.
With an excellent Operating Margin value of 19.30%, ORLY belongs to the best of the industry, outperforming 96.72% of the companies in the same industry.
ORLY's Operating Margin has been stable in the last couple of years.
ORLY has a Gross Margin of 51.47%. This is in the better half of the industry: ORLY outperforms 77.87% of its industry peers.
In the last couple of years the Gross Margin of ORLY has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	19.3%
PM (TTM)	14.22%
GM	51.47%

OM growth 3Y-3.98%

OM growth 5Y0.56%

PM growth 3Y-4.2%

PM growth 5Y0.83%

GM growth 3Y-0.94%

GM growth 5Y-0.75%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

ORLY has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for ORLY has been reduced compared to 1 year ago.
Compared to 5 years ago, ORLY has less shares outstanding
Compared to 1 year ago, ORLY has an improved debt to assets ratio.

2.2 Solvency

ORLY has an Altman-Z score of 4.31. This indicates that ORLY is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.31, ORLY belongs to the top of the industry, outperforming 84.43% of the companies in the same industry.
ORLY has a debt to FCF ratio of 3.79. This is a good value and a sign of high solvency as ORLY would need 3.79 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 3.79, ORLY is doing good in the industry, outperforming 71.31% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	N/A
Debt/FCF	3.79
Altman-Z	4.31

ROIC/WACC3.65

WACC9.54%

2.3 Liquidity

A Current Ratio of 0.76 indicates that ORLY may have some problems paying its short term obligations.
With a Current ratio value of 0.76, ORLY is not doing good in the industry: 86.89% of the companies in the same industry are doing better.
ORLY has a Quick Ratio of 0.76. This is a bad value and indicates that ORLY is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of ORLY (0.11) is worse than 95.08% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.76
Quick Ratio	0.11

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ORLY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.12%.
The Earnings Per Share has been growing by 17.85% on average over the past years. This is quite good.
ORLY shows a small growth in Revenue. In the last year, the Revenue has grown by 6.19%.
ORLY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.48% yearly.

EPS 1Y (TTM)7.12%

EPS 3Y9.35%

EPS 5Y17.85%

EPS Q2Q%11.74%

Revenue 1Y (TTM)6.19%

Revenue growth 3Y7.83%

Revenue growth 5Y10.48%

Sales Q2Q%7.82%

3.2 Future

The Earnings Per Share is expected to grow by 9.79% on average over the next years. This is quite good.
ORLY is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.86% yearly.

EPS Next Y11.91%

EPS Next 2Y11.58%

EPS Next 3Y11.16%

EPS Next 5Y9.79%

Revenue Next Year6.61%

Revenue Next 2Y6.69%

Revenue Next 3Y6.52%

Revenue Next 5Y5.86%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

ORLY is valuated quite expensively with a Price/Earnings ratio of 34.05.
The rest of the industry has a similar Price/Earnings ratio as ORLY.
ORLY is valuated rather expensively when we compare the Price/Earnings ratio to 28.30, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 29.16, ORLY can be considered very expensive at the moment.
ORLY's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 25.57. ORLY is around the same levels.

		Industry Rank	Sector Rank
PE	34.05
Fwd PE	29.16

4.2 Price Multiples

ORLY's Enterprise Value to EBITDA ratio is in line with the industry average.
ORLY's Price/Free Cash Flow ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	53.16
EV/EBITDA	23.04

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ORLY does not grow enough to justify the current Price/Earnings ratio.
ORLY has an outstanding profitability rating, which may justify a higher PE ratio.