uploads/2018/03/10-3.png

O’Reilly Automotive Stock: Performance So Far in 1Q18

By

Updated

O’Reilly Automotive stock

O’Reilly Automotive (ORLY) traded on a positive note in January 2018, rising 10%. However, the stock turned negative in February, mainly due to investors’ concerns about its weak 2018 outlook. The company saw a 7.7% value erosion in February. As of March 6, 2018, ORLY stock has risen 4.7% YTD (year-to-date).

In 4Q17, ORLY stock performed better than automakers Ford (F) and General Motors (GM) but worse than its direct peer AutoZone (AZO). Ford and GM rose marginally by 1.5% and 4.3%, while AutoZone rose 19.5%.

Article continues below advertisement

Recent earnings update

In 4Q17, O’Reilly Automotive reported adjusted EPS (earnings per share) of $2.90. That was 12% higher than $2.59 in 4Q16. The company beat analysts’ EPS estimate of $2.80. However, its weak same-store sales growth kept investor sentiment negative after the earnings event.

Other key drivers

In the fourth quarter of 2017, O’Reilly’s revenues were $2.2 billion, a 4.4% rise from $2.1 billion in 4Q16. On the negative side, its same-store sales grew 1.3% in 4Q17 compared to 4.8% in 4Q16. Earlier this year, management guided its 4Q17 same-store sales growth at 0%–2%.

The company’s 4Q17 gross profit was $1.2 billion, which was about 4% higher than $1.1 billion in 4Q16. With that, its gross profit margin remained flat with a minor negative change to 52.9% in 4Q17 from 53.1% the previous year.

For 1Q18, management guided the company’s same-store-sales growth rate to improve to 2%–4%. The positive guidance could keep investor confidence high going forward.

In the next part, we’ll see why Advance Auto Parts stock has outperformed its peers in 2018 so far.

Advertisement

More From Market Realist