ORLY
O’Reilly Automotive
Dividend / Cash flow
★ Quality 66/100Price today
$87.89
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What this business is made of
The business
The right part in hours: when your car stops, you pay to not wait.
O'Reilly sells replacement auto parts in the U.S. and Mexico, with ~6,400 stores. It serves two customers at once: the owner who fixes their own car (DIY) and the professional shop (DIFM). It brought in $17.8B in 2025 with a 52% gross margin.
Its edge is logistics: a network of distribution centers that gets the right part to the store in hours, not days. When your car is down, you don't wait; you pay for availability. Replicating that density of inventory and delivery takes decades and billions of dollars.
Revenue history
From $13.3B to $17.8B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $17.8B · FY2025
Of every $100 in sales, $86 goes to costs and operations; $14 is left as net profit (14% margin).
Catalysts and risks
Counter-cyclical auto parts market: the average age of the U.S. vehicle fleet is over 12 years and still rising.
Expansion in Mexico and new openings: ~200 net stores per year.
Aggressive buybacks: it has been steadily reducing shares for years, amplifying FCF per share.
Debt of $6.0B against only $0.2B in cash; the model leans on debt to buy back shares.
Electric vehicles have fewer parts to wear out; it's a slow but real threat to replacement part volume.
Amazon and the big distributors pressure prices on standardized parts.
Charlie's note
“Paying 14.25x for a business with a 52% gross margin and a logistics moat that took decades to build is no crazy move; the 7% growth won't dazzle, but part availability gets paid for every day. Here patience pays off more than haste.”
Analysis · June 2026
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