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Why Is O'Reilly Automotive (ORLY) Up 2.1% 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 2.1% 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 Q1 Earnings Exceed Estimates on Strong Comps
O’Reilly Automotive, Inc. reported first-quarter 2023 adjusted earnings per share of $8.28, beating the Zacks Consensus Estimate of $8. Higher-than-expected comps growth resulted in the outperformance. Comps grew 10.8% in the reported quarter and topped the Zacks Consensus Estimate of 6.32%. The bottom line increased from $7.17 in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $3,707.8 million, crossing the consensus mark of $3,564 million. The top line increased 12% year over year.
During the quarter, the company opened 58 new stores in the United States and Mexico. The total store count was 6,029 as of Mar 31, 2023.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses flared up 13.5% year over year to $1.17 billion. Operating income rose 7% to $717 million from $670 million. Net income amounted to $517 million, up 7% from $482 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 1.4 million shares for $1.11 billion at an average price of $819.06 per share. After the end of the quarter until the date of release, the company repurchased an additional 0.2 million shares of common stock for a total investment of $137 million at an average price of $864.44 per share. As of Apr 26, the company had nearly $475 million remaining under the current share repurchase authorization.
It had cash and cash equivalents of $59.8 million at the end of the reported quarter, falling from $108.6 million recorded as of 2022 end. Its long-term debt was $4,927.7 million, higher than $4,371.6 million as of Dec 31, 2022.
During the reported quarter, O’Reilly generated $713.7 million in cash from operating activities, up from the year-ago period’s $689.8 million. Capital expenditures totaled $223.3 million, rising from $103.9 million in the year-ago period. Free cash flow contracted 16% to $486.1 million.
Outlook for 2023
For 2023, total revenues are expected to be in the range of $15.2-$15.5 billion. Earnings per share are expected between $36.5 and $37. The forecast for comparable store sales growth is in the range of 4-6%. The free cash flow projection is in the band of $1.8-$2.1 billion. Capital expenditures are expected within the range of $750-$800 million. The company intends to open 180-190 stores this year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, O'Reilly Automotive has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. 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 2.1% 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 2.1% 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 Q1 Earnings Exceed Estimates on Strong Comps
O’Reilly Automotive, Inc. reported first-quarter 2023 adjusted earnings per share of $8.28, beating the Zacks Consensus Estimate of $8. Higher-than-expected comps growth resulted in the outperformance. Comps grew 10.8% in the reported quarter and topped the Zacks Consensus Estimate of 6.32%. The bottom line increased from $7.17 in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $3,707.8 million, crossing the consensus mark of $3,564 million. The top line increased 12% year over year.
During the quarter, the company opened 58 new stores in the United States and Mexico. The total store count was 6,029 as of Mar 31, 2023.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses flared up 13.5% year over year to $1.17 billion. Operating income rose 7% to $717 million from $670 million. Net income amounted to $517 million, up 7% from $482 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 1.4 million shares for $1.11 billion at an average price of $819.06 per share. After the end of the quarter until the date of release, the company repurchased an additional 0.2 million shares of common stock for a total investment of $137 million at an average price of $864.44 per share. As of Apr 26, the company had nearly $475 million remaining under the current share repurchase authorization.
It had cash and cash equivalents of $59.8 million at the end of the reported quarter, falling from $108.6 million recorded as of 2022 end. Its long-term debt was $4,927.7 million, higher than $4,371.6 million as of Dec 31, 2022.
During the reported quarter, O’Reilly generated $713.7 million in cash from operating activities, up from the year-ago period’s $689.8 million. Capital expenditures totaled $223.3 million, rising from $103.9 million in the year-ago period. Free cash flow contracted 16% to $486.1 million.
Outlook for 2023
For 2023, total revenues are expected to be in the range of $15.2-$15.5 billion. Earnings per share are expected between $36.5 and $37. The forecast for comparable store sales growth is in the range of 4-6%. The free cash flow projection is in the band of $1.8-$2.1 billion. Capital expenditures are expected within the range of $750-$800 million. The company intends to open 180-190 stores this year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, O'Reilly Automotive has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, O'Reilly Automotive has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.