Intrinsic value of O'Reilly Automotive - ORLY

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$248.48

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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$248.48

 
Intrinsic value

$204.99

 
Up/down potential

-18%

 
Rating

hold

 
Value-price divergence* premium content

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ORLY stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 22.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.86
  2.90
  3.11
  3.30
  3.47
  3.62
  3.76
  3.88
  4.00
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.68
  4.72
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
Revenue, $m
  8,593
  8,842
  9,117
  9,418
  9,745
  10,098
  10,477
  10,884
  11,319
  11,783
  12,276
  12,800
  13,356
  13,944
  14,567
  15,225
  15,921
  16,655
  17,429
  18,246
  19,106
  20,013
  20,968
  21,973
  23,030
  24,143
  25,314
  26,545
  27,840
  29,202
  30,633
Variable operating expenses, $m
 
  6,231
  6,423
  6,632
  6,859
  7,105
  7,369
  7,652
  7,955
  8,278
  8,621
  8,907
  9,294
  9,703
  10,137
  10,595
  11,079
  11,590
  12,128
  12,697
  13,295
  13,926
  14,591
  15,290
  16,026
  16,800
  17,615
  18,472
  19,373
  20,320
  21,316
Fixed operating expenses, $m
 
  883
  905
  927
  950
  974
  998
  1,023
  1,049
  1,075
  1,102
  1,130
  1,158
  1,187
  1,217
  1,247
  1,278
  1,310
  1,343
  1,376
  1,411
  1,446
  1,482
  1,519
  1,557
  1,596
  1,636
  1,677
  1,719
  1,762
  1,806
Total operating expenses, $m
  6,894
  7,114
  7,328
  7,559
  7,809
  8,079
  8,367
  8,675
  9,004
  9,353
  9,723
  10,037
  10,452
  10,890
  11,354
  11,842
  12,357
  12,900
  13,471
  14,073
  14,706
  15,372
  16,073
  16,809
  17,583
  18,396
  19,251
  20,149
  21,092
  22,082
  23,122
Operating income, $m
  1,699
  1,728
  1,790
  1,859
  1,935
  2,018
  2,110
  2,208
  2,315
  2,430
  2,553
  2,763
  2,904
  3,054
  3,214
  3,384
  3,564
  3,755
  3,958
  4,173
  4,400
  4,640
  4,895
  5,163
  5,447
  5,747
  6,063
  6,396
  6,748
  7,119
  7,511
EBITDA, $m
  1,917
  1,986
  2,053
  2,128
  2,210
  2,301
  2,400
  2,507
  2,623
  2,747
  2,880
  3,022
  3,174
  3,336
  3,508
  3,692
  3,886
  4,092
  4,311
  4,542
  4,787
  5,045
  5,319
  5,608
  5,913
  6,235
  6,575
  6,933
  7,311
  7,710
  8,130
Interest expense (income), $m
  64
  74
  80
  87
  94
  103
  112
  121
  131
  142
  154
  167
  180
  194
  209
  225
  241
  259
  277
  297
  318
  339
  362
  386
  412
  439
  467
  496
  528
  560
  595
Earnings before tax, $m
  1,637
  1,655
  1,710
  1,772
  1,840
  1,916
  1,998
  2,087
  2,184
  2,287
  2,399
  2,597
  2,724
  2,860
  3,005
  3,159
  3,323
  3,496
  3,681
  3,876
  4,082
  4,301
  4,532
  4,777
  5,035
  5,308
  5,596
  5,900
  6,221
  6,559
  6,916
Tax expense, $m
  599
  447
  462
  478
  497
  517
  539
  564
  590
  618
  648
  701
  736
  772
  811
  853
  897
  944
  994
  1,046
  1,102
  1,161
  1,224
  1,290
  1,359
  1,433
  1,511
  1,593
  1,680
  1,771
  1,867
Net income, $m
  1,038
  1,208
  1,248
  1,294
  1,344
  1,399
  1,459
  1,524
  1,594
  1,670
  1,751
  1,896
  1,989
  2,088
  2,194
  2,306
  2,426
  2,552
  2,687
  2,829
  2,980
  3,140
  3,309
  3,487
  3,676
  3,875
  4,085
  4,307
  4,541
  4,788
  5,048

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  147
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  7,204
  7,260
  7,485
  7,732
  8,001
  8,290
  8,602
  8,936
  9,293
  9,674
  10,079
  10,509
  10,965
  11,448
  11,960
  12,500
  13,071
  13,674
  14,310
  14,980
  15,687
  16,431
  17,215
  18,040
  18,908
  19,822
  20,783
  21,794
  22,857
  23,975
  25,150
Adjusted assets (=assets-cash), $m
  7,057
  7,260
  7,485
  7,732
  8,001
  8,290
  8,602
  8,936
  9,293
  9,674
  10,079
  10,509
  10,965
  11,448
  11,960
  12,500
  13,071
  13,674
  14,310
  14,980
  15,687
  16,431
  17,215
  18,040
  18,908
  19,822
  20,783
  21,794
  22,857
  23,975
  25,150
Revenue / Adjusted assets
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
  1.218
Average production assets, $m
  3,004
  3,095
  3,191
  3,296
  3,411
  3,534
  3,667
  3,809
  3,962
  4,124
  4,297
  4,480
  4,674
  4,880
  5,098
  5,329
  5,572
  5,829
  6,100
  6,386
  6,687
  7,005
  7,339
  7,690
  8,061
  8,450
  8,860
  9,291
  9,744
  10,221
  10,721
Working capital, $m
  -143
  -301
  -310
  -320
  -331
  -343
  -356
  -370
  -385
  -401
  -417
  -435
  -454
  -474
  -495
  -518
  -541
  -566
  -593
  -620
  -650
  -680
  -713
  -747
  -783
  -821
  -861
  -903
  -947
  -993
  -1,042
Total debt, $m
  1,887
  2,045
  2,223
  2,419
  2,630
  2,859
  3,106
  3,370
  3,652
  3,952
  4,272
  4,612
  4,973
  5,354
  5,758
  6,185
  6,636
  7,112
  7,615
  8,144
  8,702
  9,290
  9,910
  10,561
  11,248
  11,969
  12,729
  13,527
  14,367
  15,250
  16,179
Total liabilities, $m
  5,577
  5,735
  5,913
  6,109
  6,320
  6,549
  6,796
  7,060
  7,342
  7,642
  7,962
  8,302
  8,663
  9,044
  9,448
  9,875
  10,326
  10,802
  11,305
  11,834
  12,392
  12,980
  13,600
  14,251
  14,938
  15,659
  16,419
  17,217
  18,057
  18,940
  19,869
Total equity, $m
  1,627
  1,525
  1,572
  1,624
  1,680
  1,741
  1,806
  1,877
  1,952
  2,032
  2,117
  2,207
  2,303
  2,404
  2,512
  2,625
  2,745
  2,872
  3,005
  3,146
  3,294
  3,450
  3,615
  3,788
  3,971
  4,163
  4,364
  4,577
  4,800
  5,035
  5,282
Total liabilities and equity, $m
  7,204
  7,260
  7,485
  7,733
  8,000
  8,290
  8,602
  8,937
  9,294
  9,674
  10,079
  10,509
  10,966
  11,448
  11,960
  12,500
  13,071
  13,674
  14,310
  14,980
  15,686
  16,430
  17,215
  18,039
  18,909
  19,822
  20,783
  21,794
  22,857
  23,975
  25,151
Debt-to-equity ratio
  1.160
  1.340
  1.410
  1.490
  1.570
  1.640
  1.720
  1.800
  1.870
  1.950
  2.020
  2.090
  2.160
  2.230
  2.290
  2.360
  2.420
  2.480
  2.530
  2.590
  2.640
  2.690
  2.740
  2.790
  2.830
  2.880
  2.920
  2.960
  2.990
  3.030
  3.060
Adjusted equity ratio
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,038
  1,208
  1,248
  1,294
  1,344
  1,399
  1,459
  1,524
  1,594
  1,670
  1,751
  1,896
  1,989
  2,088
  2,194
  2,306
  2,426
  2,552
  2,687
  2,829
  2,980
  3,140
  3,309
  3,487
  3,676
  3,875
  4,085
  4,307
  4,541
  4,788
  5,048
Depreciation, amort., depletion, $m
  218
  257
  263
  269
  276
  283
  290
  299
  308
  317
  327
  259
  270
  282
  295
  308
  322
  337
  353
  369
  387
  405
  424
  445
  466
  488
  512
  537
  563
  591
  620
Funds from operations, $m
  1,670
  1,465
  1,511
  1,563
  1,619
  1,681
  1,749
  1,822
  1,902
  1,987
  2,078
  2,154
  2,259
  2,370
  2,488
  2,614
  2,748
  2,889
  3,039
  3,198
  3,367
  3,545
  3,733
  3,932
  4,142
  4,363
  4,597
  4,844
  5,104
  5,379
  5,668
Change in working capital, $m
  216
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -36
  -38
  -40
  -42
  -44
  -46
  -49
Cash from operations, $m
  1,454
  1,604
  1,521
  1,573
  1,630
  1,693
  1,762
  1,836
  1,916
  2,002
  2,095
  2,172
  2,278
  2,390
  2,509
  2,636
  2,771
  2,914
  3,066
  3,226
  3,396
  3,576
  3,765
  3,966
  4,178
  4,401
  4,637
  4,886
  5,148
  5,425
  5,717
Maintenance CAPEX, $m
  0
  -174
  -179
  -184
  -191
  -197
  -204
  -212
  -220
  -229
  -238
  -248
  -259
  -270
  -282
  -295
  -308
  -322
  -337
  -353
  -369
  -387
  -405
  -424
  -445
  -466
  -488
  -512
  -537
  -563
  -591
New CAPEX, $m
  -476
  -91
  -96
  -105
  -114
  -124
  -133
  -142
  -152
  -162
  -173
  -183
  -194
  -206
  -218
  -230
  -243
  -257
  -271
  -286
  -301
  -317
  -334
  -352
  -370
  -390
  -410
  -431
  -453
  -476
  -501
Cash from investing activities, $m
  -529
  -265
  -275
  -289
  -305
  -321
  -337
  -354
  -372
  -391
  -411
  -431
  -453
  -476
  -500
  -525
  -551
  -579
  -608
  -639
  -670
  -704
  -739
  -776
  -815
  -856
  -898
  -943
  -990
  -1,039
  -1,092
Free cash flow, $m
  925
  1,339
  1,245
  1,283
  1,325
  1,373
  1,425
  1,482
  1,544
  1,611
  1,684
  1,741
  1,824
  1,914
  2,009
  2,111
  2,220
  2,335
  2,458
  2,588
  2,726
  2,872
  3,026
  3,190
  3,363
  3,546
  3,739
  3,943
  4,158
  4,385
  4,625
Issuance/(repayment) of debt, $m
  499
  158
  178
  195
  212
  229
  246
  264
  282
  301
  320
  340
  360
  382
  404
  427
  451
  476
  502
  530
  558
  588
  619
  652
  686
  722
  759
  799
  840
  883
  928
Issuance/(repurchase) of shares, $m
  -1,446
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -895
  158
  178
  195
  212
  229
  246
  264
  282
  301
  320
  340
  360
  382
  404
  427
  451
  476
  502
  530
  558
  588
  619
  652
  686
  722
  759
  799
  840
  883
  928
Total cash flow (excl. dividends), $m
  30
  1,497
  1,424
  1,478
  1,537
  1,602
  1,671
  1,746
  1,826
  1,912
  2,004
  2,080
  2,185
  2,296
  2,413
  2,538
  2,671
  2,811
  2,960
  3,117
  3,284
  3,460
  3,645
  3,842
  4,049
  4,267
  4,498
  4,741
  4,998
  5,268
  5,553
Retained Cash Flow (-), $m
  334
  -45
  -47
  -52
  -56
  -61
  -65
  -70
  -75
  -80
  -85
  -90
  -96
  -101
  -107
  -114
  -120
  -127
  -134
  -141
  -148
  -156
  -165
  -173
  -182
  -192
  -202
  -212
  -223
  -235
  -247
Prev. year cash balance distribution, $m
 
  147
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,600
  1,376
  1,426
  1,481
  1,541
  1,606
  1,676
  1,751
  1,832
  1,919
  1,990
  2,089
  2,194
  2,306
  2,425
  2,551
  2,685
  2,827
  2,977
  3,135
  3,303
  3,481
  3,668
  3,866
  4,076
  4,296
  4,529
  4,775
  5,034
  5,307
Discount rate, %
 
  4.80
  5.04
  5.29
  5.56
  5.83
  6.13
  6.43
  6.75
  7.09
  7.45
  7.82
  8.21
  8.62
  9.05
  9.50
  9.98
  10.48
  11.00
  11.55
  12.13
  12.74
  13.37
  14.04
  14.74
  15.48
  16.25
  17.07
  17.92
  18.82
  19.76
PV of cash for distribution, $m
 
  1,527
  1,248
  1,222
  1,193
  1,160
  1,124
  1,083
  1,038
  989
  936
  869
  810
  749
  686
  621
  557
  493
  432
  373
  318
  266
  220
  179
  143
  112
  86
  64
  47
  34
  24
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

O’Reilly Automotive, Inc., together with its subsidiaries, engages in the retail of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States. The company provides new and remanufactured automotive hard parts, such as alternators, starters, fuel pumps, water pumps, brake system components, batteries, belts, hoses, temperature controls, chassis parts, driveline parts, and engine parts; maintenance items comprising oil, antifreeze products, fluids, filters, wiper blades, lighting products, engine additives, and appearance products; and accessories, such as floor mats, seat covers, and truck accessories. Its stores offer auto body paint and related materials, automotive tools, and professional service provider service equipment. The company’s stores also offer enhanced services and programs comprising used oil, oil filter, and battery recycling; battery, wiper, and bulb replacement; battery diagnostic testing; electrical and module testing; check engine light code extraction; loaner tool program; drum and rotor resurfacing; custom hydraulic hoses; professional paint shop mixing and related materials; and machine shops. Its stores provide do-it-yourself and professional service provider customers a selection of brand name, house brands, and private label products for domestic and imported automobiles, vans, and trucks. As of December 31, 2015, the company operated 4,571 stores in 44 states. O’Reilly Automotive, Inc. was founded in 1957 and is headquartered in Springfield, Missouri.

FINANCIAL RATIOS  of  O'Reilly Automotive (ORLY)

Valuation Ratios
P/E Ratio 22.2
Price to Sales 2.7
Price to Book 14.2
Price to Tangible Book
Price to Cash Flow 15.9
Price to Free Cash Flow 23.6
Growth Rates
Sales Growth Rate 7.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 15%
Cap. Spend. - 3 Yr. Gr. Rate 3.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 116%
Total Debt to Equity 116%
Interest Coverage 27
Management Effectiveness
Return On Assets 15.5%
Ret/ On Assets - 3 Yr. Avg. 14.3%
Return On Total Capital 30.2%
Ret/ On T. Cap. - 3 Yr. Avg. 26.9%
Return On Equity 57.9%
Return On Equity - 3 Yr. Avg. 47.9%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 52.5%
Gross Margin - 3 Yr. Avg. 52%
EBITDA Margin 22.3%
EBITDA Margin - 3 Yr. Avg. 21.4%
Operating Margin 19.8%
Oper. Margin - 3 Yr. Avg. 18.8%
Pre-Tax Margin 19.1%
Pre-Tax Margin - 3 Yr. Avg. 18.1%
Net Profit Margin 12.1%
Net Profit Margin - 3 Yr. Avg. 11.5%
Effective Tax Rate 36.6%
Eff/ Tax Rate - 3 Yr. Avg. 36.4%
Payout Ratio 0%

ORLY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ORLY stock intrinsic value calculation we used $8593 million for the last fiscal year's total revenue generated by O'Reilly Automotive. The default revenue input number comes from 2016 income statement of O'Reilly Automotive. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ORLY stock valuation model: a) initial revenue growth rate of 2.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.8%, whose default value for ORLY is calculated based on our internal credit rating of O'Reilly Automotive, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of O'Reilly Automotive.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ORLY stock the variable cost ratio is equal to 70.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $861 million in the base year in the intrinsic value calculation for ORLY stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.9% for O'Reilly Automotive.

Corporate tax rate of 27% is the nominal tax rate for O'Reilly Automotive. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ORLY stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ORLY are equal to 35%.

Life of production assets of 17.3 years is the average useful life of capital assets used in O'Reilly Automotive operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ORLY is equal to -3.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1627 million for O'Reilly Automotive - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 90.958 million for O'Reilly Automotive is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of O'Reilly Automotive at the current share price and the inputted number of shares is $22.6 billion.


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Stock chart of ORLY Financial statements of ORLY Annual reports of ORLY
Valuation of Stocks

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