A month has gone by since the last earnings report for O'Reilly Automotive (ORLY). Shares have added about 1.6% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is O'Reilly Automotive due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
O'Reilly Q4 Earnings Miss Expectations
O’Reilly reported fourth-quarter 2025 adjusted earnings per share (EPS) of 71 cents, which missed the Zacks Consensus Estimate of 72 cents. The bottom line increased from 66 cents in the prior-year quarter.
The automotive parts retailer registered quarterly revenues of $4.41 billion, which surpassed the Zacks Consensus Estimate of $4.40 billion. The top line also increased 7.8% year over year.
During the quarter, comparable store sales grew 5.6% and the company opened 47 stores in the United States, Mexico and Canada. The total store count was 6,585 as of Dec. 31, 2025.
Other Tidbits
In the reported quarter, selling, general and administrative expenses rose 7% year over year to $1.46 billion. Operating income increased 12% year over year to $829 million. Net income was $605 million, up from $551 million in the year-ago quarter.
During the reported quarter, O’Reilly repurchased 5.2 million shares for $500 million at an average price of $96.69 per share. From the end of the fourth quarter until Feb. 04, 2026, the company repurchased an additional 1.4 million shares of common stock for a total investment of $134 million at an average price of $93.86 per share. As of Feb. 04, ORLY had nearly $2.26 billion remaining under the current share repurchase authorization.
As of Dec. 31, 2025, it had cash and cash equivalents of $193.8 million, up from $130.2 million recorded as of Dec. 31, 2024. Its long-term debt was $6.02 billion, up from $5.52 billion as of Dec. 31, 2024.
During the reported quarter, O’Reilly generated $633.4 million in cash from operating activities compared with the year-ago period’s $624.5 million. Capital expenditures totaled $269 million compared with $290.5 million in the year-ago period. Free cash flow (FCF) was $362.2 million, up 9.5% year over year.
ORLY’s 2026 Outlook
For 2026, O’Reilly estimates total revenues to be in the range of $18.7-$19 billion compared with $17.8 billion in 2025. It expects EPS to be in the band of $3.10-$3.20 compared with $2.97 in 2025. Comparable store sales are estimated to grow 3-5% compared with 4.7% in 2025. The FCF is anticipated to be between $1.8 billion and $2.1 billion compared with $1.56 billion in 2025. Capital expenditure is expected to be between $1.3 billion and $1.4 billion compared with $1.17 billion in 2025. The company intends to open 225-235 stores this year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, O'Reilly Automotive has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise O'Reilly Automotive has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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O'Reilly Automotive, Inc. (ORLY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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