Value
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.5 |
| P/S | 7.6 |
| EV/EBITDA | 0.1 |
| Fwd P/E | 5.2 |
| PEG | 4.6 |
| Analyst target | 6.0 |
- ▸Forward P/E: 24.3x
- ▸PEG: 1.87
ORLY · Why this verdict
Why O'Reilly Automotive (ORLY) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
O'Reilly Automotive is a high-quality auto parts retailer with a strong Piotroski score of 8/9 and 22% analyst upside, but a confirmed downtrend, thin 9.9% upside margin, elevated put-to-call ratio of 3.52, and a recent executive departure create a cautious near-term outlook.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A Piotroski F-Score of 8/9 and moat score of 7.0 reflect a durable competitive position in aftermarket auto parts, driven by extensive distribution networks and professional installer relationships. Quality breakdown | Piotroski score remains at 7 or above and operating margin stays above 15% for the next 4 reported quarters. | →Stable |
| CounterFree cash flow is only 51% of net income, flagging an earnings quality warning that could indicate capital expenditures are consuming cash faster than the headline income suggests. | ||
Analyst consensus implies 22% upside from current levels, reflecting institutional confidence that current prices represent a temporary dislocation from fair value. Sentiment breakdown | Price appreciates to within 5% of the $99.19 analyst target within 12 months. | →Stable |
| CounterAn elevated put-to-call ratio of 3.52 and a confirmed downtrend suggest that sophisticated options traders are not aligned with the bullish analyst consensus. | ||
The stock is below its 200-day moving average with the average declining at 1.5% over 30 days, confirming a downtrend that historically precedes further underperformance before a sustainable reversal. Momentum breakdown | Price crosses back above the 200-day moving average and the slope turns positive within 12 months. | →Stable |
| CounterMACD is improving despite the downtrend, and the overall momentum score of 5.0 sits at the boundary of acceptable momentum, suggesting the worst of the selling may be past. | ||
A put-to-call ratio of 3.52 indicates that options buyers are paying significantly more to hedge downside risk than to capture upside, a bearish signal that professional market participants expect further weakness. Key risks | Put-to-call ratio falls below 2.0 within 6 months as the downtrend resolves and the stock builds a base. | →Stable |
| CounterElevated put-to-call ratios at cyclical lows in high-quality retailers often precede sharp recoveries when the hedging overhang unwinds. | ||
A Piotroski F-Score of 8/9 and moat score of 7.0 reflect a durable competitive position in aftermarket auto parts, driven by extensive distribution networks and professional installer relationships.
→StableQuality breakdown
- Expectation
- Piotroski score remains at 7 or above and operating margin stays above 15% for the next 4 reported quarters.
CounterFree cash flow is only 51% of net income, flagging an earnings quality warning that could indicate capital expenditures are consuming cash faster than the headline income suggests.
Analyst consensus implies 22% upside from current levels, reflecting institutional confidence that current prices represent a temporary dislocation from fair value.
→StableSentiment breakdown
- Expectation
- Price appreciates to within 5% of the $99.19 analyst target within 12 months.
CounterAn elevated put-to-call ratio of 3.52 and a confirmed downtrend suggest that sophisticated options traders are not aligned with the bullish analyst consensus.
The stock is below its 200-day moving average with the average declining at 1.5% over 30 days, confirming a downtrend that historically precedes further underperformance before a sustainable reversal.
→StableMomentum breakdown
- Expectation
- Price crosses back above the 200-day moving average and the slope turns positive within 12 months.
CounterMACD is improving despite the downtrend, and the overall momentum score of 5.0 sits at the boundary of acceptable momentum, suggesting the worst of the selling may be past.
A put-to-call ratio of 3.52 indicates that options buyers are paying significantly more to hedge downside risk than to capture upside, a bearish signal that professional market participants expect further weakness.
→StableKey risks
- Expectation
- Put-to-call ratio falls below 2.0 within 6 months as the downtrend resolves and the stock builds a base.
CounterElevated put-to-call ratios at cyclical lows in high-quality retailers often precede sharp recoveries when the hedging overhang unwinds.
Per-dimension breakdown
Quality
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 9.2 |
| Gross margin | 6.3 |
| Op margin | 7.4 |
| Net margin | 7.2 |
| Current ratio | 3.0 |
| FCF quality | 4.1 |
| Moat | 7.0 |
| Piotroski F | 8.9 |
- ▸Earnings quality warning: 51% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
5.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.0 |
| EPS growth | 5.2 |
Momentum
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 1.1 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -2.0%/30d — confirmed downtrend
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 8.3 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 27%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸Insider selling (low materiality) — $9,815,211 (0.013% of mkt cap)
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.9 |
| quality rank | 7.9 |
| growth rank | 5.6 |
Technical
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.5 |
| support resistance | 7.2 |
| 52w position | 6.0 |
| gap | 6.0 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.7 |
| days to cover | 7.6 |
| volatility | 6.2 |
| put call | 8.8 |
| implied vol | 6.9 |
| max pain risk | 3.0 |
| beta | 9.9 |
- ▸Above max pain $70
Catalyst
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 2.9 |
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- ASYMMETRY:2.9>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.3<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
2.85
Upside
+14.3%
Downside
5.0%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.3<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 2.85 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.3, Sentiment at 7.1, and Technical at 6.7; the weakest are Momentum at 3.3, Catalyst at 4.6, and Value at 4.8. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 2.85 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1A Piotroski F-Score of 8/9 and moat score of 7.0 reflect a durable competitive position in aftermarket auto parts, driven by extensive distribution networks and professional installer relationships.
Trip ifPiotroski F-Score falls below 6 in any reported period.
- P2Analyst consensus implies 22% upside from current levels, reflecting institutional confidence that current prices represent a temporary dislocation from fair value.
Trip ifAnalyst consensus price target falls below $85 (below current price of $90.26).
- P3The stock is below its 200-day moving average with the average declining at 1.5% over 30 days, confirming a downtrend that historically precedes further underperformance before a sustainable reversal.
Trip ifThe 200-day moving average slope declines below negative 3% for more than 60 days.
- P4A put-to-call ratio of 3.52 indicates that options buyers are paying significantly more to hedge downside risk than to capture upside, a bearish signal that professional market participants expect further weakness.
Trip ifPut-to-call ratio rises above 5.0, signaling accelerating institutional hedging activity.