O'Reilly Automotive (ORLY): Assessing Valuation After a Strong Year for Shares

O'Reilly Automotive (ORLY) has attracted fresh attention from investors following recent trading activity. Despite a slight drop over the past month, the company’s shares are up around 20% so far this year, which underlines its steady long-term performance.

See our latest analysis for O'Reilly Automotive.

O'Reilly Automotive’s share price has seen a strong 22.6% gain so far this year, continuing a long-running trend of solid total shareholder returns, up nearly 20% over the past year and an impressive 215% over five years. Momentum looks steady as investors remain optimistic about the company’s growth potential, with only minor pullbacks in recent weeks hinting at healthy profit-taking rather than a shift in sentiment.

If you’re thinking about branching out beyond O'Reilly Automotive, now could be an ideal moment to discover See the full list for free.

But with shares now trading close to their analyst price targets after a period of strong gains, the key question is whether O'Reilly Automotive is undervalued or if the market has already priced in its growth story.

Most Popular Narrative: 11.8% Undervalued

The latest fair value estimate for O'Reilly Automotive sits at $110.13, a significant leap above the recent close of $97.09. This valuation spotlights the company's perceived earnings growth and robust operational setup.

The company's robust and improving supply chain is supporting top-tier parts coverage and faster delivery. This is strengthening its competitive position and market share potential.

Read the complete narrative.

Want to know what’s driving this aggressive price target? It rests on bold profit expansion plans and a forecast for margin gains that most companies would envy. The key twist is that market expectations are pinned on ambitious growth and steady operational improvements. Only a deep dive reveals the full set of numbers analysts are betting on.

Result: Fair Value of $110.13 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there are still risks, such as unpredictable tariff changes and potential softening of consumer demand, that could quickly challenge this positive outlook.

Find out about the key risks to this O'Reilly Automotive narrative.

Another View: Multiples Tell a Different Story

While the recent fair value suggests upside potential, the current market multiple presents a more cautious perspective. O'Reilly Automotive is trading at a price-to-earnings ratio of 33x, which is significantly higher than the Specialty Retail industry average of 18.4x and its peer group at 28x. The fair ratio, based on market trends, is just 19.1x. This notable difference raises questions about whether future growth truly justifies the premium price or indicates additional valuation risk for new buyers.

Story Continues

See what the numbers say about this price — find out in our valuation breakdown.NasdaqGS:ORLY PE Ratio as at Nov 2025

Build Your Own O'Reilly Automotive Narrative

If you want to dig into the details or challenge the consensus view, there’s nothing stopping you from shaping your own perspective in just a few minutes. Do it your way

A great starting point for your O'Reilly Automotive research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ORLY.

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