AutoZone And O'Reilly: Attractive Long-Term Holds But Growth Will Inevitably Slow As Inflation Moderates

Sep. 15, 2022 3:19 AM ETAutoZone, Inc. (AZO), ORLYAAP5 Comments
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Beersheba Research


  • My long-term thesis that leading auto part retailers will continue to deliver attractive growth despite tepid growth in the auto industry continuing to hold.
  • The strong growth in AutoZone and O'Reilly's revenues after the COVID-19 outbreak, which were boosted by auto part price inflation, will moderate as inflation recedes.
  • US vehicle miles driven has rebounded to pre-pandemic levels but new vehicle sales remain weak, indicating that existing cars will be kept and driven longer, which is positive for auto part retailers.
  • Valuations of both companies have remained well within the historical range.
  • I intend to hold onto my position but will be keeping a close watch on the potential long-term risk that share growth of electrical vehicles, which require fewer parts, may reduce the value of traditional auto part retailers.
Man calling his car insurance after having a vehicle breakdown on the road



In an October 7, 2021 article on AutoZone (NYSE:NYSE:AZO), O'Reilly (NASDAQ:NASDAQ:ORLY), and other auto part retailers, I articulated my key thesis, which I have summarized and updated in the table below.



1. Even though growth in the

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Beersheba Research profile picture
I strive to unearth less obvious, overlooked, or under-appreciated but intriguing and potentially profitable data-driven insights into companies of service to society.   I write to understand, identify deficiencies in, and share my thinking, and would be most appreciative if you call out blind spots, flaws, or gaps in my observations or reasoning. Hope you enjoy my contributions, but please do not take them as investment advice!

Disclosure: I/we have a beneficial long position in the shares of ORLY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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