A Look At O'Reilly Automotive (ORLY) Valuation After Strong Q4 Results And Cautious 2026 Guidance

O'Reilly Automotive (ORLY) is back in focus after strong Q4 2025 earnings and revenue growth driven by sales expansion and new stores, paired with more cautious 2026 guidance tied to higher SG&A costs.

See our latest analysis for O'Reilly Automotive.

The mixed reaction to O'Reilly Automotive's Q4 report and cautious 2026 guidance has weighed on sentiment, with the 30 day share price return of 8.78% and 90 day return of 9.92% both pointing to fading short term momentum. At the same time, the 5 year total shareholder return of about 3x still reflects a strong longer term outcome.

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With the shares down over the past month and quarter, but still carrying a value score of 0 and trading below some analyst targets, the key question is whether O'Reilly is underpriced today or if the market already reflects its future growth.

Most Popular Narrative: 13.5% Undervalued

With O'Reilly Automotive's fair value estimate at $105.72 versus a last close of $91.44, the current price sits meaningfully below that narrative anchor. This anchor is built on detailed assumptions about growth, margins, and valuation multiples.

The analysts have a consensus price target of $106.955 for O'Reilly Automotive based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $120.0, and the most bearish reporting a price target of just $62.0.

Read the complete narrative.

Want to see what is behind that fair value gap? The narrative focuses on steady revenue growth, firm margins, and a richer future earnings multiple. Curious how those moving parts fit together and what they imply for long term value?

Result: Fair Value of $105.72 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside story can quickly look different if tariff changes lift product costs or if higher store level pay and occupancy push SG&A above current expectations.

Find out about the key risks to this O'Reilly Automotive narrative.

Another Angle On Valuation

That 13.5% upside story sits awkwardly next to how the market is currently pricing O'Reilly. At a P/E of 31.3x, the shares sit well above the Specialty Retail industry at 21x, the peer average at 19.6x, and even the SWS fair ratio of 20.2x. This points to richer pricing and higher valuation risk if sentiment cools.

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With all this mixed sentiment, are you ready to look under the hood yourself and move quickly to form your own view? Take a closer look at the company's 2 key rewards and 3 important warning signs to see how the trade off between concerns and opportunities stacks up for you.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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