Let's talk about the popular O'Reilly Automotive, Inc. (NASDAQ:ORLY). The company's shares saw a decent share price growth of 18% on the NASDAQGS over the last few months. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine O'Reilly Automotive’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out 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 3.95% 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 $1087.03, there’s only an insignificant downside when the price falls to its real value. What's more, O'Reilly Automotive’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will O'Reilly Automotive generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to 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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Our analysis shows 3 warning signs for O'Reilly Automotive (1 is concerning!) and we strongly recommend you look at them before investing.

If you are no longer interested in O'Reilly Automotive, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.