ORLY - Embedded Expectations Analysis - 2020 07 01
O'Reilly Automotive, Inc. (ORLY:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 25.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about coronavirus-related sales disruptions, their capex plans, and SG&A expensesSpecifically, management may have concerns about coronavirus-driven disruptions to their sales, their ability to reduce their capex, and changes to their in-store customer interaction. Moreover, they may lack confidence in their ability to properly monitor their business and capital projects, reduce staffing and SG&A expenses across stores, and add hard-to-find parts to their stores. Additionally, management may be exaggerating the progress of their Horn Lake distribution center project, their focus on meeting customer needs during the pandemic, and their ability to convert e-commerce customers to in-store customers
O'Reilly Automotive is a retailer of automotive aftermarket parts, tools, supplies, equipment and accessories, selling its products to both do-it-yourself and service provider customers. The company's stores carry a product line, including: new and remanufactured automotive hard parts and maintenance items, such as alternators, batteries, brake system components, belts, chassis parts, driveline parts, engine parts, fuel pumps, hoses, starters, temperature control, water pumps, antifreeze, appearance products, engine additives, filters, fluids, lighting, oil and wiper blades; and accessories, such as floor mats, seat covers and truck accessories.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.