What Happened:
Shares of auto parts and accessories retailer O’Reilly Automotive (NASDAQ:ORLY) fell 7.3% in the morning session after the company reported first quarter results with same store sales falling below expectations, leading to a revenue miss. While gross margin was roughly in line with expectations, EPS was below consensus.
Additionally, the company's full-year earnings forecast was underwhelming. Highlighting the company's activities towards returning value to shareholders during the quarter, O'Reilly repurchased 0.3 million shares of its common stock, at an average price per share of $1,029.24, for a total investment of $270 million. At the end of the quarter, the company had approximately $2.22 billion remaining under its repurchase program. Overall, the results could have been better.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy O'Reilly? Access our full analysis report here, it's free.
What is the market telling us:
O'Reilly's shares are not very volatile than the market average and over the last year have had only a move greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
O'Reilly is up 10.5% since the beginning of the year, but at $1,047 per share it is still trading 10.4% below its 52-week high of $1,168 from March 2024. Investors who bought $1,000 worth of O'Reilly's shares 5 years ago would now be looking at an investment worth $2,748.
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