O'Reilly Automotive's (ORLY) Revenue Exceeded Expectations. Here's why

TimesSquare Capital Management, an equity investment management company, released its “U.S. Focus Growth Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The broad-based downturn in US equities underperformed overseas markets in the first quarter. In this negative environment, the strategy outperformed the index in the first quarter. The strategy returned 2.42% (gross) and 2.20% (net) compared to a -7.12% return for the Russell Midcap Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, TimesSquare Capital U.S. Focus Growth Strategy highlighted stocks such as O’Reilly Automotive, Inc. (NASDAQ:ORLY). O’Reilly Automotive, Inc. (NASDAQ:ORLY) is a retailer and supplier of automotive aftermarket parts, tools, supplies, equipment, and accessories. The one-month return of O’Reilly Automotive, Inc. (NASDAQ:ORLY) was -0.66%, and its shares gained 36.52% of their value over the last 52 weeks. On May 16, 2025, O’Reilly Automotive, Inc. (NASDAQ:ORLY) stock closed at $1,381.66 per share with a market capitalization of $78.74 billion.

TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding O’Reilly Automotive, Inc. (NASDAQ:ORLY) in its Q1 2025 investor letter:

"Our preferences in the Consumer-oriented sectors lean toward value-oriented or specialty retailers, franchise models, premium brands, or support services for other consumer companies. One benefit was the specialty retailer and supplier of auto parts, tools, supplies, and accessories, O’Reilly Automotive, Inc. (NASDAQ:ORLY). A steady increase in same-store sales led O’Reilly’s revenues above expectations. The company’s management tempered its 2025 guidance, which seemed well-telegraphed given broader consumer caution, and its shares climbed by 21%."

O’Reilly Automotive, Inc. (NASDAQ:ORLY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held O’Reilly Automotive, Inc. (NASDAQ:ORLY) at the end of the fourth quarter compared to 41 in the third quarter. While we acknowledge the potential of O’Reilly Automotive, Inc. (NASDAQ:ORLY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered O’Reilly Automotive, Inc. (NASDAQ:ORLY) and shared stock picks from Charles Akre and John Neff with tremendous upside potential. O’Reilly Automotive, Inc. (NASDAQ:ORLY) contributed to Wedgewood Partners' performance during Q1 2025. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.