Real MARQORA analysis · O’Reilly Automotive
A strong business.
How does the share price measure up?
O’Reilly sells automotive replacement parts, tools and accessories to repair shops and people who repair their own cars.
Analysis dated October 14, 2026 · Nasdaq: ORLY
This view presents a fixed version of an existing MARQORA analysis. The price assessment is based on $86.16 on October 12, 2026.
The company
Existing stores are selling more.
Sales at existing US stores increased in the second quarter of 2026 by 6% compared with the same quarter a year earlier. The business is therefore growing even without new stores. About $20 of every $100 of revenue remained before interest and taxes.
Read the quarterly report ↗The share price
The price assumes considerable success.
At the price at the time of $86.16 the stock cost about 27 times expected earnings per share for 2026. In other words, investors paid about $27 for each dollar of expected annual earnings.
According to the MARQORA analysis, this price assumes more future cash generation than its cautious assumptions suggest. The annual earnings figure comes from the company's guidance.
What else matters
O’Reilly buys back its own shares and spends more on this than remains after capital investment. At the same time, debt is rising. If the business generates less cash in future, that burden becomes more important.
What remains uncertain: Can additional repair-shop customers and new stores generate sustainably more cash without debt continuing to rise sharply?
What you can take from this: You can see the case for the company, what the price already assumes, and which developments to keep watching. The original assessment is: keep watching.
Full original analysis, figures and sources
The following six sections are an English translation of the existing MARQORA analysis dated October 14, 2026. Its figures and judgments are preserved. The short overview above uses simpler language. Model values depend on assumptions and are not guaranteed future share prices.
Business performance
The identity and instrument are confirmed: O’Reilly Automotive, Inc., CIK 898173, is a Missouri corporation. ORLY identifies its Nasdaq-listed common stock with a par value of $0.01, not an ADR or preferred stock. It generally grants one vote per share, conditional dividend rights and subordinated liquidation rights. The 15-for-1 stock split on June 10, 2025 is already reflected in the reported comparative figures. The consolidated reports use US GAAP and USD; table amounts stated in thousands of USD are converted accordingly here. Revenue and net income both rose by about 6.4% in 2025, with a largely stable operating margin. Management expects 225–235 net new stores in 2026. Expansion and growth at existing stores support a viable business, but do not automatically imply an attractively priced stock.
Source sec-facts · Source fy-10k · Source stock-rights · Source q2-release
Balance sheet and cash flow
In 2025, operating cash flow fell from $3.050 billion to $2.762 billion despite higher earnings; after capital expenditures, the calculated remainder was $1.593 billion versus $2.026 billion. In the first half of 2026, however, O’Reilly reported operating cash flow of $2.039 billion and free cash flow, as defined by the company, of $1.478 billion. This improvement includes payment timing for acquired tax credits and must not simply be doubled. Share repurchases of $2.433 billion substantially exceeded free cash flow. Recognized financial debt rose from $6.017 billion at year-end to $7.015 billion; cash was $262 million. Lease obligations are additional and separate. The $2.25 billion credit facility was undrawn: borrowing capacity is not additional existing debt.
Valuation and assumptions
The original price of $86.16 equals 29.0 times reported 2025 diluted common earnings per share of $2.97, or 26.1–26.9 times management's 2026 guidance of $3.20–$3.30. This is not a rigid valuation threshold. Cash generation is decisive: using 816.166 million shares outstanding on June 30 gives a calculated equity value of $70.32 billion; projected free cash flow of $1.8–$2.1 billion represents only about 2.6–3.0% of that. My simplified equity cash-flow model starts conservatively at $1.8 billion, or $2.2054 per share. My own assumptions, which management has not promised, are annual growth of 8% for ten years, then 3%, and a discount rate of 8%. With growth and discount rates equal, the value is 2.2054 × [10 + 1.03/(0.08−0.03)] = approximately $67.49. The rounded-down price ceiling is $67.48. It assumes no further buybacks, no additional net borrowing and no acquisition benefits; ongoing interest is already included in cash flow. Financial debt is therefore not deducted again. The large share of terminal value makes the result sensitive to assumptions.
Source quote · Source fy-release · Source q2-release · Source q2-10q
Scenarios
The sensitivity analysis uses only the published free cash-flow guidance range and explicitly stated valuation assumptions of my own. At the lower end of $1.8 billion, the model described gives about $67.49 per share; using $2.1 billion and otherwise identical assumptions gives about $78.73. Even the upper end of guidance therefore does not reach the original price. A positive reassessment would be possible if sustainably higher cash flow than this range emerges or stronger long-term growth is supported by economic evidence. Conversely, weaker growth or a higher required return for risk reduces the model value. These are not price targets, ten-year management forecasts or guaranteed returns; for simplicity, the model allocates a full starting period to the current year.
Risks and counterarguments
Revenue growth is not entirely volume growth: higher average selling prices and more repair-shop transactions were accompanied by fewer transactions with individual customers. Capital returned to shareholders is also increasing debt. This makes a high current price sensitive to weaker cash generation. The counterargument is substantial: existing US stores are growing, the quarterly operating margin remains stable, and financing complied with its covenants. There is therefore no evidenced acute financing shortfall. However, the 10% increase in quarterly earnings per share overstates total net income growth of about 7%, because buybacks reduce the share count. That additional effect must not be counted again as independent operating growth.
Conclusion
Overall assessment: watch; there is currently no sufficiently supported opportunity at the original price. O’Reilly combines profitable store development with an established replacement-parts business. Against this stand a low current free cash-flow yield on the share price and buybacks exceeding internally generated funds. This combination, rather than the absence of an arbitrary discount, prevents a positive overall assessment. The $67.48 price ceiling describes a conditionally reasonable valuation in the disclosed model, not an automatic decision to buy. Even at that price, the business and financing must remain viable. Material questions about identity, currency and reporting periods have been resolved; the remaining uncertainty is future business risk rather than a decisive data gap.
Source quote · Source sec-facts · Source q2-release · Source q2-10q · Source fy-10k
The figures side by side
All values are in US dollars. A quarter is compared with the same quarter in the prior year; annual figures are shown separately.
| Metric | Earlier period | Later period |
|---|---|---|
| Sales revenueConsolidated revenue under US GAAP, in USD; not a per-share measure. | January 1, 2024 to December 31, 2024 $16,708.479 million | January 1, 2025 to December 31, 2025 $17,781.992 million |
| Profit after costs and taxesConsolidated net income under US GAAP, in USD; neither operating income nor earnings per share. | January 1, 2024 to December 31, 2024 $2,386.680 million | January 1, 2025 to December 31, 2025 $2,538.209 million |
| Cash generated after capital expendituresOur cash-flow measure in USD: US-GAAP operating cash flow less capital expenditures. This is not identical to the company's additionally adjusted free cash-flow measure. | January 1, 2024 to December 31, 2024 $2,026.189 million | January 1, 2025 to December 31, 2025 $1,593.178 million |
| Sales revenueConsolidated revenue for the second quarter alone under US GAAP, in USD; not a cumulative half-year figure. | April 1, 2025 to June 30, 2025 $4,525.058 million | April 1, 2026 to June 30, 2026 $4,892.013 million |
Sources for the original analysis
Links open the original sources in a new tab. The FCS link identifies the data provider; it is not a publicly accessible historical price record. The price used is dated above.
- Provided FCS price record for NASDAQ:ORLY; price timestamp October 12, 2026Checked for this analysis: October 14, 2026
- Provided SEC Company Facts extract, CIK 898173, with annual figures for 2025 and 2024Checked for this analysis: October 14, 2026
- O’Reilly Automotive: Form 10-K for fiscal year 2025Published: February 27, 2026 · Checked for this analysis: October 14, 2026
- O’Reilly Automotive Reports Fourth Quarter and Full-Year 2025 ResultsPublished: February 4, 2026 · Checked for this analysis: October 14, 2026
- O’Reilly Automotive Reports Second Quarter 2026 Results, SEC Exhibit 99.1Published: July 29, 2026 · Checked for this analysis: October 14, 2026
- O’Reilly Automotive: Form 10-Q as of June 30, 2026Published: August 7, 2026 · Checked for this analysis: October 14, 2026
- Description of Capital Stock, Exhibit 4.20; incorporated by reference in the 2025 Form 10-KChecked for this analysis: October 14, 2026
- O’Reilly Automotive Investor Relations: business and store count as of June 30, 2026Checked for this analysis: October 14, 2026