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Why Is O'Reilly Automotive (ORLY) Up 3.2% Since Last Earnings Report?
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A month has gone by since the last earnings report for O'Reilly Automotive (ORLY - Free Report) . Shares have added about 3.2% 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 its most recent earnings report in order to get a better handle on the important catalysts.
O'Reilly Q2 Earnings Miss Mark, 2024 Profit View Cut
O’Reilly reported second-quarter 2024 adjusted earnings per share (EPS) of $10.55, falling short of the Zacks Consensus Estimate of $10.95. The bottom line increased from $10.22 per share reported in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4.27 billion, missing the Zacks Consensus Estimate of $4.32 billion. The top line, however, increased 5% year over year.
During the quarter, comparable store sales grew 2.3%. The company opened 27 new stores in the United States and Mexico during the quarter. It operates 23 stores in Canada after completing the acquisition of Vast Auto in January. The total store count was 6,244 as of Jun 30, 2024.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses rose 6% year over year to $1.3 billion. Operating income rose to $863 million from $854 million generated in the year-ago period. Net income was $623 million, down from $627 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 0.8 million shares for $794 million at an average price of $1,012.14 per share. After the end of the quarter until the release date, ORLY repurchased an additional 0.2 million shares of common stock for a total investment of $224 million at an average price of $1,036.84 per share. As of Jul 24, the company had nearly $1.28 billion remaining under the current share repurchase authorization.
It had cash and cash equivalents of $145 million at the end of the reported quarter, down from $279.1 million recorded as of 2023-end. Its long-term debt was $5.4 billion, lower than $5.57 billion as of Dec 31, 2023.
During the reported quarter, O’Reilly generated $949 million in cash from operating activities, compared with the year-ago period’s $937.5 million. Capital expenditures totaled $225.4 million, compared with $237 million in the year-ago period. Free cash flow was $718.2 million, indicating an uptick of 5.4% year over year.
Updated 2024 Outlook
For full-year 2024, O’Reilly estimates total revenues in the range of $16.6-$16.9 billion, down from the prior guidance of $16.8-$17.1 billion. It now expects earnings per share in the range of $40.75-$41.25, down from the previous estimate of 41.35-$41.85. The outlook for comparable store sales growth was revised downward to 2-4% from 3-5%. 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 fresh estimates.
VGM Scores
At this time, O'Reilly Automotive has a nice Growth Score of B, 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 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.
Performance of an Industry Player
O'Reilly Automotive is part of the Zacks Automotive - Retail and Wholesale - Parts industry. Over the past month, Genuine Parts (GPC - Free Report) , a stock from the same industry, has gained 2.5%. The company reported its results for the quarter ended June 2024 more than a month ago.
Genuine Parts reported revenues of $5.96 billion in the last reported quarter, representing a year-over-year change of +0.8%. EPS of $2.44 for the same period compares with $2.44 a year ago.
Genuine Parts is expected to post earnings of $2.45 per share for the current quarter, representing a year-over-year change of -1.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Genuine Parts. Also, the stock has a VGM Score of C.
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Why Is O'Reilly Automotive (ORLY) Up 3.2% Since Last Earnings Report?
A month has gone by since the last earnings report for O'Reilly Automotive (ORLY - Free Report) . Shares have added about 3.2% 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 its most recent earnings report in order to get a better handle on the important catalysts.
O'Reilly Q2 Earnings Miss Mark, 2024 Profit View Cut
O’Reilly reported second-quarter 2024 adjusted earnings per share (EPS) of $10.55, falling short of the Zacks Consensus Estimate of $10.95. The bottom line increased from $10.22 per share reported in the prior-year quarter. The automotive parts retailer registered quarterly revenues of $4.27 billion, missing the Zacks Consensus Estimate of $4.32 billion. The top line, however, increased 5% year over year.
During the quarter, comparable store sales grew 2.3%. The company opened 27 new stores in the United States and Mexico during the quarter. It operates 23 stores in Canada after completing the acquisition of Vast Auto in January. The total store count was 6,244 as of Jun 30, 2024.
Financials, Share Repurchase & Costs
In the reported quarter, selling, general and administrative expenses rose 6% year over year to $1.3 billion. Operating income rose to $863 million from $854 million generated in the year-ago period. Net income was $623 million, down from $627 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 0.8 million shares for $794 million at an average price of $1,012.14 per share. After the end of the quarter until the release date, ORLY repurchased an additional 0.2 million shares of common stock for a total investment of $224 million at an average price of $1,036.84 per share. As of Jul 24, the company had nearly $1.28 billion remaining under the current share repurchase authorization.
It had cash and cash equivalents of $145 million at the end of the reported quarter, down from $279.1 million recorded as of 2023-end. Its long-term debt was $5.4 billion, lower than $5.57 billion as of Dec 31, 2023.
During the reported quarter, O’Reilly generated $949 million in cash from operating activities, compared with the year-ago period’s $937.5 million. Capital expenditures totaled $225.4 million, compared with $237 million in the year-ago period. Free cash flow was $718.2 million, indicating an uptick of 5.4% year over year.
Updated 2024 Outlook
For full-year 2024, O’Reilly estimates total revenues in the range of $16.6-$16.9 billion, down from the prior guidance of $16.8-$17.1 billion. It now expects earnings per share in the range of $40.75-$41.25, down from the previous estimate of 41.35-$41.85. The outlook for comparable store sales growth was revised downward to 2-4% from 3-5%. 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 fresh estimates.
VGM Scores
At this time, O'Reilly Automotive has a nice Growth Score of B, 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 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.
Performance of an Industry Player
O'Reilly Automotive is part of the Zacks Automotive - Retail and Wholesale - Parts industry. Over the past month, Genuine Parts (GPC - Free Report) , a stock from the same industry, has gained 2.5%. The company reported its results for the quarter ended June 2024 more than a month ago.
Genuine Parts reported revenues of $5.96 billion in the last reported quarter, representing a year-over-year change of +0.8%. EPS of $2.44 for the same period compares with $2.44 a year ago.
Genuine Parts is expected to post earnings of $2.45 per share for the current quarter, representing a year-over-year change of -1.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -3.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Genuine Parts. Also, the stock has a VGM Score of C.