Q4/FY 2024 - O'Reilly Auto - Full Analysis
Management set the bar low for FY25; buyback accretion inversely correlated with the stock's valuation
Yesterday, O’Reilly Automotive reported its Q4 2024 results followed by an earnings call this morning. At the time of writing, the stock is down 1.5%.
We wrote about O’Reilly last week, and cut our overweight allocation at - what we consider - an impressive return, bringing our total IRR on all transactions to around 32%. All while O’Reilly’s been a mid- to high-teens percent allocation in our portfolio.
As we stated:
However, with valuation on the high side, we wouldn’t be surprised one bit to see O’Reilly come out with a subpar outlook of 3% comparable sales growth and flattish EBIT margin projections.
Indeed, that’s exactly what we saw in yesterday’s press release:
O’Reilly’s Press Release
Let’s take a closer look at the leading auto parts retailer, and how we view valuation and risk/reward from here.