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O'Reilly: Proven Fundamentals But With A High Valuation


  • In the short term, O'Reilly is financially strong and competitive, with a focus on customer service and technical expertise that has helped it outperform its competitors.
  • However, in the long term, the traditional way of conducting business in the auto parts industry may face uncertainties due to the shift towards EVs and the rise of e-Commerce.
  • Additionally, the high stock valuation and lower cash flow relative to earnings may not make the price attractive to investors.
  • I would not recommend buying the stock from a long-term perspective unless there is a short-term arbitrage opportunity found from a valuation point.

Close up old catalytic converter in hand Car service man remove from engine gasoline car dust clogged condition on filter in service concept and engine room in the background

NongAsimo/iStock via Getty Images


While there are potential threats to O'Reilly Automotive, Inc.'s (NASDAQ:ORLY) business model, such as the rise of e-commerce and the impact of the transition to electric vehicles (EV), the company has demonstrated its ability to adapt and

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We are a team of CFA, CPA, and economists. Our research and analysis provide a range of target prices.Value Investment with Business Fundamentals in various industries including Retail / Industrial / Technology.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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Comments (2)

There are around 280m gas vehicles in US , in 20 years , there might be 350m + still on the roads , EV's are expensive and Bidens economy is making more Americans poorer, so I don't see a threat for a very , very , long time , EV's are less than 5% of US sales . Long ORLY from $36
EVs are a threat but I think the reality is that many people will not want to transition or be able to afford the higher prices. Even if the auto makers went almost entirely to EVs people would just preserve their used cars even longer which will be great for ORLY.
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