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Today we're going to take a look at the well-established O'Reilly Automotive, Inc. (NASDAQ:ORLY). The company's stock received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$1,271 at one point, and dropping to the lows of US$1,147. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether O'Reilly Automotive's current trading price of US$1,198 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at O'Reilly Automotive’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for O'Reilly Automotive
What Is O'Reilly Automotive Worth?
According to our valuation model, O'Reilly Automotive seems to be fairly priced at around 2.61% above our intrinsic value, which means if you buy O'Reilly Automotive today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $1167.14, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, O'Reilly Automotive’s low beta implies that the stock is less volatile than the wider market.
What does the future of O'Reilly Automotive look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. O'Reilly Automotive's earnings over the next few years are expected to increase by 20%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in ORLY’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on ORLY, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.