O'Reilly Automotive, Inc. (ORLY) DCF Valuation
TGM's two-stage DCF values O'Reilly Automotive, Inc. (ORLY) between $39.97 and $84.71 depending on assumptions, with a base case of $57.19. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$89.55 is justified only if free cash flow grows about +18.2% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 5.3%/yr | 8.5% | $39.97 |
| Base case | 8.3%/yr | 7.5% | $57.19 |
| Optimistic | 11.3%/yr | 6.5% | $84.71 |
| Analyst DCF (FMP) | independent reference — different model | $104.92 | |
Current Price
$89.55
Market-Implied Growth
+18.2%/yr
vs +8.3% 5Y actual
Model Scenario Range
$39.97 – $84.71
model output — not a price target
ORLY DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for ORLY (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.0B · 0.83B shares · net debt $5.8B
Estimated Fair Value
$72.46
-19.1% vs $89.55
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 8.3%/yr FCF growth and 10-year horizon fixed. Green = above today's $89.55; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $102 | $114 | $130 | $152 | $186 |
| 6.5% | $78.54 | $85.38 | $93.94 | $105 | $120 |
| 7.5% | $63.02 | $67.31 | $72.46 | $78.75 | $86.62 |
| 8.5% | $52.00 | $54.87 | $58.21 | $62.16 | $66.89 |
| 9.5% | $43.80 | $45.80 | $48.08 | $50.72 | $53.80 |
About O'Reilly Automotive, Inc.
O'Reilly Automotive, Inc., along with its subsidiary companies, functions as a leading retail and wholesale provider of automotive aftermarket products, specialized tools, supplies, and accessories across the United States. The company's comprehensive inventory includes both new and reconditioned vehicle hard parts and essential maintenance items. This expansive selection covers critical components such as alternators, batteries, brake system parts, belts, chassis and driveline components, engine parts, fuel pumps, hoses, starters, temperature control systems, and water pumps. Additionally, they supply consumables like antifreeze, appearance products, engine additives, filters, various fluids, lighting solutions, oil, and wiper blades. Their accessory range features items like floor mats, seat covers, and specific truck enhancements. Beyond just parts, O'Reilly's outlets also stock auto body paint and related materials, a wide array of automotive tools, and specialized equipment catering to professional service providers. Customers can also benefit from a suite of value-added services and programs offered in-store. These include recycling initiatives for used oil, oil filters, and batteries; complimentary installation services for batteries, wiper blades, and light bulbs; comprehensive diagnostic testing for batteries, electrical systems, and vehicle modules; retrieval of check engine light codes; a convenient loaner tool program; resurfacing services for brake drums and rotors; custom hydraulic hose fabrication; and professional-grade paint shop mixing with associated materials. O'Reilly's stores serve a diverse clientele, providing an extensive product assortment for both individual do-it-yourself (DIY) mechanics and professional auto repair facilities, covering domestic and imported automobiles, vans, and trucks. As of December 31, 2021, the company maintained a significant retail presence, operating 5,759 stores throughout the United States and an additional 25 locations in Mexico. Established in 1957, O'Reilly Automotive, Inc. is headquartered in Springfield, Missouri.
- Sector
- Consumer Cyclical
- Industry
- Specialty Retail
- CEO
- Brad W. Beckham