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Why Is O'Reilly Automotive (ORLY) Up 4.6% Since Last Earnings Report?
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It has been about a month since the last earnings report for O'Reilly Automotive (ORLY - Free Report) . Shares have added about 4.6% in that time frame, underperforming 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 Tops Earnings Mark in Q3
O’Reilly reported third-quarter 2022 adjusted earnings per share of $9.17, beating the Zacks Consensus Estimate of $8.46. Higher-than-expected comps growth resulted in the outperformance. Comps grew 7.6% in the reported quarter and topped the Zacks Consensus Estimate of 4.79%. The bottom line increased 13.6% from $8.07 in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $3,799.6 million, crossing the consensus mark of $3,713 million. The top line was 9% higher than the prior-year figure of $3,479.5 million.
During the quarter, the company opened 38 new stores in the United States and one in Mexico. The total store count was 5,938 as of Sep 30, 2022.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses flared up 6% year over year to $1,130.8 million. Operating income rose 7% to $804 million from $755 million. Net income amounted to $585 million, increasing 5% from $559 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 1 million shares of its common stock for a total investment of $710 million at an average price of $683.09 per share. As of Oct 26, the company had nearly $483 million remaining under the current share-repurchase authorization.
It had cash and cash equivalents of $67.1 million at the end of the reported quarter, sharply falling from $449.3 million in the year-ago quarter. Its long-term debt was $4,370.8 million, higher than the year-ago level of $3,826.1 million.
During the reported quarter, O’Reilly generated $961 million in cash from operating activities, up from the year-ago period’s $852.4 million. Capital expenditure totaled $159.9 million, rising from $118.1 million in the year-ago period. Free cash flow grew 9.6% to $791.5 million.
Outlook for 2022
For 2022, ORLY’s estimates have been revised. Total revenues are now expected within the range of $14.1-$14.3 billion compared with the prior guidance of $14-$14.3 billion. Earnings per share are pegged within $32.35-$32.85, up from $31.25-$31.75 estimated earlier. Forecast for comparable store sales growth has been brought up to the range of 4.5-5.5% from the previous band of 3-5%. Free cash flow projection has also been increased to the band of $1.8-$2.1 billion from the prior range of $1.3-$1.6 billion. Capital expenditures have been reduced to $550-$650 million from $650-$750 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, O'Reilly Automotive has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise O'Reilly Automotive has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is O'Reilly Automotive (ORLY) Up 4.6% Since Last Earnings Report?
It has been about a month since the last earnings report for O'Reilly Automotive (ORLY - Free Report) . Shares have added about 4.6% in that time frame, underperforming 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 Tops Earnings Mark in Q3
O’Reilly reported third-quarter 2022 adjusted earnings per share of $9.17, beating the Zacks Consensus Estimate of $8.46. Higher-than-expected comps growth resulted in the outperformance. Comps grew 7.6% in the reported quarter and topped the Zacks Consensus Estimate of 4.79%. The bottom line increased 13.6% from $8.07 in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $3,799.6 million, crossing the consensus mark of $3,713 million. The top line was 9% higher than the prior-year figure of $3,479.5 million.
During the quarter, the company opened 38 new stores in the United States and one in Mexico. The total store count was 5,938 as of Sep 30, 2022.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses flared up 6% year over year to $1,130.8 million. Operating income rose 7% to $804 million from $755 million. Net income amounted to $585 million, increasing 5% from $559 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 1 million shares of its common stock for a total investment of $710 million at an average price of $683.09 per share. As of Oct 26, the company had nearly $483 million remaining under the current share-repurchase authorization.
It had cash and cash equivalents of $67.1 million at the end of the reported quarter, sharply falling from $449.3 million in the year-ago quarter. Its long-term debt was $4,370.8 million, higher than the year-ago level of $3,826.1 million.
During the reported quarter, O’Reilly generated $961 million in cash from operating activities, up from the year-ago period’s $852.4 million. Capital expenditure totaled $159.9 million, rising from $118.1 million in the year-ago period. Free cash flow grew 9.6% to $791.5 million.
Outlook for 2022
For 2022, ORLY’s estimates have been revised. Total revenues are now expected within the range of $14.1-$14.3 billion compared with the prior guidance of $14-$14.3 billion. Earnings per share are pegged within $32.35-$32.85, up from $31.25-$31.75 estimated earlier. Forecast for comparable store sales growth has been brought up to the range of 4.5-5.5% from the previous band of 3-5%. Free cash flow projection has also been increased to the band of $1.8-$2.1 billion from the prior range of $1.3-$1.6 billion. Capital expenditures have been reduced to $550-$650 million from $650-$750 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, O'Reilly Automotive has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise O'Reilly Automotive has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.