Should You Think About Buying O'Reilly Automotive, Inc. (NASDAQ:ORLY) Now?

Let's talk about the popular O'Reilly Automotive, Inc. (NASDAQ:ORLY). The company's shares saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at O'Reilly Automotive’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for O'Reilly Automotive

What Is O'Reilly Automotive Worth?

According to our valuation model, O'Reilly Automotive seems to be fairly priced at around 10.80% above our intrinsic value, which means if you buy O'Reilly Automotive today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $1108.75, there’s only an insignificant downside when the price falls to its real value. Furthermore, O'Reilly Automotive’s low beta implies that the stock is less volatile than the wider market.

What does the future of O'Reilly Automotive look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. O'Reilly Automotive's earnings over the next few years are expected to increase by 20%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? ORLY’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on ORLY, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about O'Reilly Automotive as a business, it's important to be aware of any risks it's facing. To that end, you should learn about the 3 warning signs we've spotted with O'Reilly Automotive (including 1 which is a bit unpleasant).

If you are no longer interested in O'Reilly Automotive, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.