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ORLY trades against a final fair-value range of $36.27-$74.49, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs. Fair value range: low $36.3, high $74.5, with mid-point at $53.8.
Stock analysis

ORLY fair value $36–$74

By StockMarketAgent.AI team· supervised by
Analyzed: 2026-05-20Next update: 2026-08-20Methodology v2.4Data cut-off: Quality gate: passSources: all material sources passed deterministic freshness/provenance gatesReview: automatedArchetype: Cyclical
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Last price
$91.92
▼ -38.09 (-41.44%)
Fair value
$54
$36–$74
Rating
Sell
confidence 82/100
Upside
-41.4%
upside to fair value
Margin of Safety
$45.76
MoS level · 15%
Market Cap
$76.2B
P/E fwd 25.4

§1 Executive summary

  • Composite fair value $54 with high case $74.
  • Implied downside of 41.4% to fair value.
  • Moat 9/10 · confidence 82/100 · Cyclical.
  • Currently screens above fair value, so patience matters more than entry speed.
Fair value
$54
Margin of safety
-70.8%
Confidence
82/100
Moat
9/10

Educational analysis only — not financial advice. Always do your own due diligence.

$91.92Price
Low $36.27
Mid $53.83
High $74.49

ORLY trades against a final fair-value range of $36.27-$74.49, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.

  • Unmatched professional DIFM supply chain
    Unmatched professional DIFM supply chain network
  • Pricing power through scale and
    Pricing power through scale and availability
  • Bull thesis
    The valuation requires a 14.2% implied growth rate, leaving an 8.6% disconnect against fundamental forecasts.

§2 Bear case

A prolonged period of wage inflation combined with a faster-than-expected structural shift toward lower-maintenance electric vehicles structurally depresses revenue growthRevenue growthYear-over-year change in revenue, expressed as a percentage. The starting point for any forward-earnings model and the lens through which scale, mix, and pricing power become visible. and compresses operating margins, collapsing the historically elevated multiple.

Ways this thesis can break

Severe Multiple Compression

· High

The market abruptly reprices the equity from its current ~25x forward multiple down to historical sector averages near 15x as growth normalizes.

FV impact
-40% to spot price
Trigger
12-24 months

EV Transition Acceleration

· Medium

EV adoption accelerates beyond base assumptions, structurally reducing the size of the addressable aftermarket parts pool and suppressing long-term terminal growth.

FV impact
Limits terminal growth to <2%
Trigger
5-10 years

Margin Degradation

· Medium

Persistent wage inflation and elevated strategic capital expenditures fail to deliver anticipated commercial share gains, breaking the long-term margin profile.

FV impact
Reduces fair value below $40
Trigger
24-36 months
Early-warning signals to monitor
MetricCurrentTrigger threshold
Year-over-year contraction in gross margin beyond 50 basis points.MonitorDeterioration versus the report thesis
Capex to revenue remains above 5% for 24 consecutive months.MonitorDeterioration versus the report thesis
Deceleration in DIFM commercial segment growth.MonitorDeterioration versus the report thesis
Comparable store sales miss internal estimate cross-checks for two consecutive quarters.MonitorDeterioration versus the report thesis
SGA expenses grow structurally faster than gross profit.MonitorDeterioration versus the report thesis

§3 Financial history

Income statement — last six periods
Line itemT−0T−1T−2T−3T−4CAGR
Period2021-12-312022-12-312023-12-312024-12-312025-12-31Trend
Revenue$13.33B$14.41B$15.81B$16.71B$17.78B+7.5%
Gross profit$7.02B$7.38B$8.10B$8.55B$9.17B+6.9%
Operating income$2.92B$2.95B$3.19B$3.25B$3.46B+4.4%
Net income$2.16B$2.17B$2.35B$2.39B$2.54B+4.1%
EPS (diluted)$2.07$2.23$2.56$2.71$2.97+9.4%
EBITDA$3.25B$3.31B$3.62B$3.73B$3.99B+5.2%
R&D——————
SG&A$4.10B$4.43B$4.92B$5.30B$5.71B+8.6%

Quality scores

OCF / Net income
1.09×
>1 indicates high earnings quality
Accounting quality gate
Fail
Sector-adjusted gate
ROIC
35.5%
Return on invested capital
§3

Numbers analysis

Cash flow

Cash-flow quality is reflected in the OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement. / net incomeNet IncomeNet Income is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions., accounting-quality, and ROICROICReturn on invested capital. Operating profit (after tax) divided by invested capital. The single best gauge of capital-efficiency. Spread over WACC = economic value created. rows above.

Capital allocation

Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.

Individual subscribers — §4 onwards11 more sections

Read the full analysis — 11 more sections.

Competitive moat, industry cycle, peer comparison, intrinsic valuation, sensitivity, scenarios, earnings decision tree, position management, investor perspectives, scorecard, and final recommendation.

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REVERSE DCF FAQ

ORLY reverse dcf questions

  1. Reverse DCF for ORLY (ORLY) backs out the revenue or earnings growth rate the current share price implies, holding terminal value, margin, and discount-rate assumptions constant.

FAQ

ORLY — frequently asked questions

  1. Based on our latest analysis, ORLY looks meaningfully overvalued. The current price is $91.9 versus a composite fair-value midpoint of $53.8 (range $36.3–$74.5), which implies roughly 41.4% downside to the midpoint.

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