Consumer Discretionary Select Sector

S&P 500

The Cannibal

Comparable Companies - ORLY

The insider trading record shows 13 discretionary sales and no purchases in the last 12 months, totaling $17,117,597.93 sold. The latest short interest is 1.8% of float with a days‑to‑cover of 2.1. Top institutional holders are Vanguard Group (9.4%), BlackRock (7.5%) and State Street (4.4%).

DIRECTOR

SVP OF STORE OPERATIONS

SVP OF REAL ESTATE & EXPANSION

EVP & CFO

SVP OF MERCHANDISE

SVP OF HR AND TRAINING

SVP OF INTERNATIONAL

SVP NORTHEAST STORE OPS &SALES

SVP OF WESTERN STORE OPS/SALES

Promoted to CEO following a planned leadership transition; continues to lead the company through record growth in 2025.

Chief Executive Officer

Continues as CFO, overseeing the execution of the 15-for-1 stock split and aggressive share repurchase programs in 2025.

Executive Vice President & Chief Financial Officer

Maintains role as President, focusing on supply chain and store operations.

President

Continues to provide strategic oversight as Executive Chairman.

Executive Chairman

Remains in executive leadership as Vice Chairman.

Executive Vice Chairman

Retired from the Board in May 2024 in accordance with the company's mandatory retirement age policy.

Director (Retired)

Retired from the Board in May 2024 as previously disclosed in the 2024 proxy materials.

Elected to the Board at the 2024 Annual Meeting.

Director

Elected to the Board at the 2024 Annual Meeting; also referred to as Anne deBeers in some company biographies.

Brad Beckham

Jeremy Fletcher

Dana Perlman

Thomas Hendrickson

Brad Beckham represents the pinnacle of O'Reilly's 'promote from within' philosophy, possessing nearly 30 years of internal experience. His transition to CEO in 2024 has been marked by seamless continuity of the company's 'Cannibal' capital allocation strategy. In 2025, he successfully navigated a massive stock split and maintained the company's 33-year streak of record revenues. His leadership style is deeply rooted in operational discipline and a dual-market strategy that balances DIY and professional segments, resulting in consistent double-digit EPS growth and superior shareholder returns.

Acquisition of Groupe Del Vasto (Vast-Auto)

Jeremy Fletcher is a key architect of O'Reilly's capital efficiency. Since assuming the CFO role in 2022, he has maintained a rigorous focus on the company's share cannibalization strategy, overseeing billions in buybacks while ensuring interest coverage remains robust (14.8x). His 20-year tenure at the company provides him with a unique ability to align financial strategy with the complex logistics of a 6,400+ store network. His execution of the 2025 stock split and the subsequent $2.1B buyback demonstrates a high level of technical proficiency and commitment to shareholder value.

Dana Perlman brings a sophisticated external perspective to the O'Reilly Board, particularly in the areas of retail strategy and capital markets. Her current executive role at G-III Apparel and her decade-long tenure at PVH provide her with deep expertise in managing complex global supply chains and brand portfolios. As Chair of the Corporate Governance/Nominating Committee at O'Reilly, she has been instrumental in the recent board refreshment process, ensuring that the company maintains a balance of long-term institutional knowledge and fresh strategic insight.

Independent Director

Maria Sastre

Fred Whitfield

Kimberly Anne deBeers

Gregory Johnson

John Murphy

Retailer and supplier of automotive aftermarket parts, tools, and accessories serving DIY and professional customers through a large network of company-owned stores in the U.S., Mexico, and Brazil.

DIY automotive parts and accessories sales through company-owned stores in the United States.

Professional repair shop and commercial customer sales through company-owned stores in the United States.

Automotive parts and accessories sales through company-owned stores in Mexico and Brazil.

Global distributor of automotive replacement parts and industrial products and solutions, operating through NAPA and other brands across North America, Europe, and Australasia.

Automotive aftermarket parts distribution in the U.S. and Canada under NAPA, Carquest, and other brands.

Automotive aftermarket parts distribution in Europe, Australasia, and other international markets under NAPA and local brands.

Industrial parts distribution serving manufacturing and maintenance, repair, and operations (MRO) customers, primarily in North America under the Motion brand.

Retailer and supplier of automotive aftermarket parts, accessories, and maintenance items serving DIY and professional customers through stores and online platforms in the U.S., Canada, and U.S. territories.

Single reportable segment comprising all automotive aftermarket retail and commercial operations in the U.S., Canada, and U.S. territories.

Global distributor of alternative (recycled, remanufactured, and aftermarket) vehicle parts and systems, serving collision and mechanical repair markets through a network of warehouses, salvage yards, and recycling facilities.

Alternative parts distribution and salvage operations in the United States and Canada.

Alternative parts distribution and salvage operations across Europe.

Distribution of specialty vehicle aftermarket products and accessories in the U.S. and Canada (explored for sale).

As of December 31, 2025 the company operated 32 distribution centers (approximately 14.0 million square feet), 399 hub stores (average 18,300 square feet each), and a total of 6,585 retail stores across the United States, Puerto Rico, Mexico, and Canada; many facilities are owned while a portion are leased under long-term agreements

O'Reilly Automotive grew revenue 6.4% to $17.78B in FY2025 on professional comp sales over 10%, 207 net new stores, and 51.6% gross margins, but SG&A per-store inflation of 4% offset gains holding operating margin at 19.5%, with cash conversion slipping to 109% amid inventory growth and $2.1B debt-influenced buybacks pressuring negative equity of -$763M; the current team under CEO Beckham excels in capital allocation via 21.7% net yield and 10.3% incremental ROIC but is held back by generic undisclosed incentives, net insider selling, and purely internal track records, making them adequate stewards for compounding though board strengths in oversight mitigate risks.

The Company manages hazardous materials as part of its business and operates customer-facing recycling programs for used oil, oil filters, and batteries. Compliance with environmental and safety laws has not had a material adverse effect to date, but future changes in regulations could result in significant operational expenses. Key compliance areas include hazardous materials handling, storage, and disposal, as well as recycling mandates for automotive batteries and used lubricants.

As of January 31, 2026, the Company employed 92,923 Team Members (78,258 full-time and 14,665 part-time). Approximately 76,467 were in stores, 11,649 in distribution centers, and 4,807 in corporate/regional offices. A union represents approximately 464 Team Members in 49 stores in the Greater Bay Area, California, and about 28 over-the-road truck drivers in one domestic DC are unionized. Additionally, two unions represent approximately 862 Team Members in Mexico and two unions represent approximately 128 Team Members in Canada. The Company promotes from within and provides extensive training, including the O'Reilly Certified Parts Professional test and ASE certification preparation.

The Company emphasizes superior customer service through technically proficient staff, extensive product selection, and enhanced services like battery testing, replacement, and check engine light code extraction. It operates a retail loyalty program (O'Reilly O'Rewards) and has processes for handling sales returns. Risk factors mention potential liabilities from product warranties and litigation, but no specific product safety or privacy incidents are disclosed.

The Company purchases from over 655 suppliers, with the five largest accounting for approximately 23% of total purchases in 2025. It highlights close supplier relationships and risk factors related to supply chain disruptions, trade policies, and supplier financial difficulties. Community aspects are mentioned through recycling programs (used oil, filters, batteries) and the Company's 'Live Green' cultural value, but no formal community investment or responsible sourcing policies are detailed.

Revenue grew 6.4% to $17.78 bn in FY2025 and gross margin edged to 51.6%, but SG&A per‑store rose 4% (well above the 2‑2.5% guidance), operating margin stayed flat at 19.5%, cash‑conversion fell to 109%, and tangible book value remains negative at –$2.00 per share with debt of $8.49 bn.

The FY2025 MD&A and Q4 transcript describe CapEx as being allocated to new distribution centers, hub‑store construction, and the continuation of the 207 net new store program; the Innovation Dossier confirms that all FY2025 CapEx is classified as capacity expansion for store and distribution growth.

The MD&A notes recurring property‑and‑equipment impairments for obsolete hardware projects, but no dollar amounts are disclosed; the Innovation Dossier confirms that impairments were recorded for hardware/software projects without material impact, and the auditor did not flag any impairment as a Critical Audit Matter.

The Innovation Dossier links the ROIC performance to capacity‑expansion CapEx for new stores and distribution centers, while the MD&A notes that operating profit grew modestly despite higher SG&A, indicating that new capital is generating returns above the weighted‑average cost of capital (9%).

P/FCF

Brad W. Beckham

Brent G. Kirby

C. David Wilbanks

Andrea M. Weiss

Dana M. Perlman

David O'Reilly

Director Nominee

Greg Henslee

Gregory D. Johnson

John R. Murphy

Kimberly A. deBeers

Larry O'Reilly

Maria A. Sastre

Thomas T. Hendrickson

Independent Lead Director

Thomas T. Hendrick

Philip M. Hopper

Mark Joseph Merz

To elect as Directors the nine nominees named in this proxy statement.

To conduct an advisory (non-binding) vote to approve executive compensation.

To consider and act upon a proposal to amend the Articles of Incorporation to increase the number of authorized shares of common stock for the primary purpose of effecting a 15-for-1 stock split.

To ratify the appointment of Ernst & Young LLP as independent auditors for the fiscal year ending December 31, 2025.

Shareholder proposal entitled "Support Improved Clawback Policy for Unearned Executive Pay"

Anne deBeers

Senior Vice President of Merchandise

David E. O'Reilly

Gregory L. Henslee

Jeremy Adam Fletcher

Executive VP & CFO

Robert Allen Dumas

Senior Vice President of Southeast Store Operations & Sales

Scott Richard Ross

Executive VP & CIO

Shari Lynne Reaves

Senior Vice President of Human Resources & Training

Tamara Conn

Senior VP of Legal & General Counsel

O'Reilly Automotive is a specialty retailer of automotive aftermarket parts, tools, supplies, equipment and accessories operating in the United States, Puerto Rico, Mexico and Canada. The company serves both DIY (do-it-yourself) customers and professional service-provider customers, offering a broad assortment of new, remanufactured and private-label products under brands such as BesTest, BrakeBest, Cartek and others. Its mission is to be the dominant auto-parts provider in all markets it serves by delivering superior customer service and a better value proposition than competitors.

Specialty retail of automotive aftermarket parts, tools, supplies, equipment and accessories to DIY and professional service-provider customers across the United States, Puerto Rico, Mexico and Canada.

Held base revenue growth, 9.0% WACC, and base terminal multiple constant to justify current price of 94.4.

Balance Sheet - Supplemental

Balance Sheet

Cash Flow Statement - Supplemental

Cash Flow Statement

Income Statement - Supplemental

Income Statement

Ratios

Valuation

Historical Ratios & Multiples - ORLY

The industry is in a 'repair' phase of the capital cycle. While organic revenue growth for the peer group is modest at 2.0%, O'Reilly is outperforming with 6.4% growth. However, macro headwinds include soft consumer spending in the DIY segment and the long-term threat of EV adoption, which reduces demand for high-margin hard parts.

O'Reilly is relevant for analysis now because the stock is trading near its 52-week high of $108.72 despite a 38% deterioration in FCF margin and significant insider selling at an average price of $120.86.

Negative margin surprise in upcoming quarterly results. If SG&A per-store growth continues at 4% while DIY comps remain soft, the company will likely miss its 19.2-19.7% operating margin guidance.

O'Reilly's industry-leading distribution moat is being tested by 4% SG&A per-store inflation that has held operating margins flat at 19.5% despite gross margin gains. With FCF margins falling to 9.1% and buybacks increasingly funded by debt, the current valuation of 31.1x P/E represents a significant premium to a fair value of $75.77.

Structural SG&A Inflation. The mechanism is a permanent increase in healthcare and self-insurance costs that cannot be fully offset by pricing without losing DIY market share to online competitors.

Debt-Funded Capital Allocation. The company issued $2.8B in debt to fund buybacks, leaving the balance sheet with negative equity and a high reliance on continuous cash flow to service front-loaded maturities.

Stewardship is adequate, but the governance outcome tree suggests rising risk. 1. Status Quo: Management continues debt-funded buybacks, further weakening the balance sheet. 2. Compromise: The board slows buybacks to preserve the Baa1 credit rating, leading to an EPS growth slowdown and a multiple de-rating. 3. Reset: A significant earnings miss forces a strategic review of the store expansion pace. Given that ins...

Liquidation value analysis is not relevant for the company's archetype ('Mature_Compounder') and was not performed.

O'Reilly Automotive reports Q3 2023 results with 8.7% comparable store sales growth and raises full-year guidance.

O'Reilly Automotive reports Q1 2022 results with 4.8% comparable store sales growth and announces CFO transition plan.

O'Reilly Automotive price target lowered to $108 from $110 at Morgan Stanley

O'Reilly Automotive price target lowered to $105 from $110 at Mizuho

O'Reilly Automotive (ORLY) PT Raised to $111 at RBC Capital

O'Reilly Automotive price target lowered to $110 from $112 at Evercore ISI

O'Reilly Automotive initiated with an Outperform at Baird

Raymond James Upgrades O'Reilly Automotive (ORLY) to Outperform

O'Reilly Automotive price target raised to $91 from $86 at Barclays

O'Reilly Automotive price target raised to $121 from $108 at Goldman Sachs

O'Reilly Automotive price target raised to $115 from $105 at Wells Fargo

O'Reilly Automotive initiated with an Outperform at Wolfe Research

O'Reilly Automotive price target lowered to $110 from $115 at Morgan Stanley

O'Reilly Automotive price target raised to $115 from $105 at Morgan Stanley

O'Reilly Automotive price target raised to $112 from $104 at Mizuho

Situation: Current price is $94.27 versus fair value $75.77 (-19.6% expected return), and valuation confidence is stable. Debate: Bull case depends on Negative margin surprise in upcoming quarterly results. Bear case centers on Structural SG&A Inflation. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.

Executive Summary

O'Reilly's industry-leading distribution moat is being tested by 4% SG&A per-store inflation that has held operating margins flat at 19.5% despite gross margin gains. With FCF margins falling to 9.1% and buybacks increasingly funded by debt, the current valuation of 31.1x P/E represents a significant premium to a fair value of $75.77.<ul><li>Driver: Structural SG&A inflation and deteriorating FCF conversion.</li><li>Catalyst: Earnings misses driven by margin compression and slowing DIY ticket counts.</li><li>Protection: A dominant distribution moat and 24.0% ROIC provide a valuation floor, but not at current multiples.</li></ul>Our variant perception is based on time arbitrage and a deeper appreciation of the company's deteriorating cash flow quality. While the market views O'Reilly as an invincible compounder, our analysis shows that the 5-year average FCF margin of 14.6% has collapsed to 9.1% TTM due to increased capital intensity and working capital needs. The market is pricing the stock for a 'fade to average' over the next 3-5 years, whereas our analysis suggests the company's return on capital is being structurally impaired by uncontrollable cost inflation in healthcare and self-insurance.This is a valuation-driven exit recommendation predicated on the belief that the market is overestimating the durability of O'Reilly's high returns on capital in the face of persistent SG&A headwinds and a slowing DIY consumer segment.

Core Investment Rationale

O'Reilly operates a dual-market strategy serving both Do-It-Yourself (DIY) and Professional Service Provider (PSP) customers. The company generates $17.78B in annual revenue through a network of 6,585 stores and 32 distribution centers. Strategy is centered on high inventory availability and same-day delivery to professional shops, which drove professional comparable store sales growth of over 10% in FY2025. Revenue is primarily derived from automotive hard parts, maintenance items, and accessories, with a significant focus on private-label brands like MasterPro and MicroGard to drive 51.6% gross margins.The company's core assets are its intangible distribution moat and its physical network of 399 hub stores and 32 distribution centers totaling 14.0 million square feet. Key products include high-margin hard parts such as alternators, starters, and brake components. Proprietary technology, specifically the Electronic Catalog and inventory management system, enables the rapid parts-lookup and delivery speed that anchors the professional segment's loyalty.The industry is a rational oligopoly dominated by O'Reilly, AutoZone, and Genuine Parts Company (NAPA). O'Reilly maintains a superior ROIC of 24.0% compared to the peer median of 5.7%, and its 51.6% gross margin exceeds the peer average by over 1,000 basis points. Competition is based on service and availability rather than price, though Advance Auto Parts remains a struggling Tier 2 player with negative operating margins.O'Reilly has a history of consistent execution, marked by 33 consecutive years of positive comparable store sales growth. In June 2025, the company executed a 15-for-1 stock split to improve liquidity. However, the current situation is defined by a tension between growth-driven cash outflows and a fragile capital structure. In FY2025, the company opened 207 net new stores and spent $1.14B on CapEx, but SG&A per-store growth of 4% consistently exceeded management's 2-2.5% guidance. Furthermore, the company has issued $2.8B in debt over the last five years to partially fund $12.6B in buybacks, leading to a negative tangible book value of $1.71B and a debt-to-equity ratio exceeding -1,000%.

Business & Situation

<ul><li>Bull Case: The U.S. vehicle fleet age reached a record 12.6 years in 2024, providing a structural tailwind for repair demand. O'Reilly's professional segment continues to gain market share, with comps exceeding 10% in recent quarters.</li><li>Bear Case: SG&A inflation in healthcare and insurance is structurally higher, neutralizing gross margin gains. FCF conversion has dropped from 128% to 109% of net income as inventory requirements per store rose 9% in 2025.</li></ul>The consensus view is that O'Reilly is a 'bulletproof' retail survivor that can pass through any level of inflation to a captive customer base. This narrative is supported by the company's 80% guidance hit rate and its aggressive share repurchase program, which has reduced the share count by 20% over the last 4.8 years. Institutional investors remain net buyers, adding 6.1M shares in Q4 2025, as they focus on the aging vehicle fleet and the company's 17.5% ROIC.The industry is in a 'repair' phase of the capital cycle. While organic revenue growth for the peer group is modest at 2.0%, O'Reilly is outperforming with 6.4% growth. However, macro headwinds include soft consumer spending in the DIY segment and the long-term threat of EV adoption, which reduces demand for high-margin hard parts.Our differentiated view is that the market is overly focused on short-term revenue beats while underappreciating the structural erosion of the company's cash flow profile. While management claims disciplined cost control, SG&A per-store growth of 4% has outpaced guidance for multiple quarters. This inflation is not temporary; it is driven by self-insurance and medical costs that are difficult to mitigate. Furthermore, the 'Cannibal' strategy is losing its potency as buybacks are increasingly funded by debt rather than organic free cash flow, with FCF margins now at 9.1% compared to a 5-year average of 14.6%.The debate centers on whether O'Reilly can maintain its 19.5% operating margin. We conclude that cost pressures are winning. With the stock trading at 31.1x P/E-a premium to its 5-year average of 27.0x-the market is ignoring the reality of decelerating growth and deteriorating earnings quality.Our analytical edge comes from a deeper appreciation of the company's intangible assets and switching costs, which we believe are being offset by rising operational complexity. By decomposing the EPS growth, we found that share count reduction contributed 2,237 bps to growth, but 22% of this was debt-funded, creating a solvency risk that the market is currently discounting.

Core Thesis

CEO Brad Beckham is a 30-year 'lifer' who rose from a parts specialist to CEO in 2024. His tenure has been marked by seamless continuity, maintaining the company's 33-year revenue record. However, his experience is entirely internal, lacking external perspective on managing through structural margin compression.Management demonstrates strong skill in capital allocation, achieving a 10.3% incremental ROIC on $4.1B of CapEx. However, the timing of recent buybacks is poor, with a Timing Score of 19/100 in the latest quarter as $487.8M was repurchased at an average price of $97.57, which is above our fair value estimate.Management maintains reasonable credibility with an 80% guidance hit rate, but they have consistently underestimated SG&A inflation, leading to repeated upward revisions of cost guidance.<ul><li>Board Independence: 82% (9 of 11 directors)</li><li>Chairman/CEO Roles: Separate (Greg Henslee is Executive Chairman; Brad Beckham is CEO)</li><li>Chairman Tenure: 8 years (as Chairman)</li><li>Insider Ownership: 1.18% (Total institutional ownership is 85.4%)</li><li>Shareholder Rights: Proxy Access, No Pledging Policy, Clawback Policy</li></ul>Stewardship is adequate, but the governance outcome tree suggests rising risk. 1. Status Quo: Management continues debt-funded buybacks, further weakening the balance sheet. 2. Compromise: The board slows buybacks to preserve the Baa1 credit rating, leading to an EPS growth slowdown and a multiple de-rating. 3. Reset: A significant earnings miss forces a strategic review of the store expansion pace. Given that insiders sold $17.1M in stock over the last 12 months with zero purchases, the 'Smart Money' is already voting for an exit.

Leadership & Governance

The valuation floor is anchored to the Bear Case DCF value of $60.63, which models a permanent erosion of the company's moat, 3% revenue growth, and margin compression to 18.0%.The base case assumes 6.5% revenue growth and stable 19.5% operating margins, resulting in a fair value of $80.62. This reflects the aging fleet tailwind but accounts for persistent SG&A inflation.The bull case models 8% revenue growth and 20.5% margins driven by accelerated professional share gains. Blue-Sky Potential: $94.59.The bear case is defined by moat erosion and declining profitability. The final Bear Case value of $60.63 is determined by a scenario where EV adoption accelerates and SG&A costs remain uncontained.

Valuation Context

<ul><li>Negative margin surprise in upcoming quarterly results. If SG&A per-store growth continues at 4% while DIY comps remain soft, the company will likely miss its 19.2-19.7% operating margin guidance.</li><li>O'Reilly's industry-leading distribution moat is being tested by 4% SG&A per-store inflation that has held operating margins flat at 19.5% despite gross margin gains. With FCF margins falling to 9.1% and buybacks increasingly funded by debt, the current valuation of 31.1x P/E represents a significant premium to a fair value of $75.77.</li><li>O'Reilly is relevant for analysis now because the stock is trading near its 52-week high of $108.72 despite a 38% deterioration in FCF margin and significant insider selling at an average price of $120.86.</li></ul>O'Reilly is relevant for analysis now because the stock is trading near its 52-week high of $108.72 despite a 38% deterioration in FCF margin and significant insider selling at an average price of $120.86.

Catalyst Path & Context

<ul><li>Structural SG&A Inflation. The mechanism is a permanent increase in healthcare and self-insurance costs that cannot be fully offset by pricing without losing DIY market share to online competitors. SG&A per-store costs grew 4% in 2025, outpacing the 2.5% initial guidance.</li><li>Debt-Funded Capital Allocation. The company issued $2.8B in debt to fund buybacks, leaving the balance sheet with negative equity and a high reliance on continuous cash flow to service front-loaded maturities. 46.3% of total debt matures within the next year, totaling $3.93B.</li><li>Stewardship is adequate, but the governance outcome tree suggests rising risk. 1. Status Quo: Management continues debt-funded buybacks, further weakening the balance sheet. 2. Compromise: The board slows buybacks to preserve the Baa1 credit rating, leading to an EPS growth slowdown and a multiple de-rating. 3. Reset: A significant earnings miss forces a strategic review of the store expansion pace. Given that ins... Risk monitor: Current price $94.27 vs fair value $75.77, expected return -19.6%.</li></ul>

Primary Risks

<ul><li>Entry Target: No new entries: recommendation is Sell.</li><li>Stop Loss: No stop-loss needed because recommendation is Sell (no position).</li><li>Position Size: Position size is None under current recommendation and risk constraints.</li><li>Time Horizon: N/A for a Sell recommendation.</li></ul><ul><li>Management's FY2026 guidance assumes SG&A inflation slows to 3-4%, but historical trends show they have exceeded the high end of their range for four consecutive quarters.</li><li>Monitoring trigger: Current price $94.27 vs fair value $75.77, expected return -19.6%.</li><li>SG&A per-store costs grew 4% in 2025, outpacing the 2.5% initial guidance.</li></ul>A fundamental, permanent impairment of the moat caused by a disruptive new technology from a competitor or a rapid acceleration in EV adoption that takes permanent market share. Also require valuation reliability to improve before re-entering.

Actionable Parameters & Monitoring

ORLY appears overvalued (fair value $75.77 vs current $94.27, expected return -19.6%). Recommendation: Sell; do not allocate until valuation and risk profile reset.

Final Conclusion

Structural SG&A inflation and deteriorating FCF conversion.

Driver

Earnings misses driven by margin compression and slowing DIY ticket counts.

Catalyst

A dominant distribution moat and 24.0% ROIC provide a valuation floor, but not at current multiples.

Protection

The U.S. vehicle fleet age reached a record 12.6 years in 2024, providing a structural tailwind for repair demand. O'Reilly's professional segment continues to gain market share, with comps exceeding 10% in recent quarters.

Bull Case

SG&A inflation in healthcare and insurance is structurally higher, neutralizing gross margin gains. FCF conversion has dropped from 128% to 109% of net income as inventory requirements per store rose 9% in 2025.

Bear Case

Situation: Current price is $94.27 versus fair value $75.77 (-19.6% expected return), and valuation confidence is stable. Debate: Bull case depends on Negative margin surprise in upcoming quarterly results. Bear case centers on Structural SG&A Inflation. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.

The company's strategy evolved from a focus on aggressive market share gains and store expansion in early 2024 to a heightened emphasis on profitability, cost discipline, and operational resilience by late 2025, encapsulated by the 'Built for This' leadership theme. Initial responses to tariff uncertainty and consumer softness gave way to a more measured approach balancing growth investments with margin protection.

Method	Implied Value	Weight	Weighted Value
DCF	$81.12	50%	$40.56
Comps	$78.91	30%	$23.67
Historicals	$57.67	20%	$11.53
Total Weighted			$75.77

ORLY

Company Overview

Price History