O’Reilly Automotive Inc. (ORLY) is rallying as consumers shun new cars to spruce-up their older models. The company’s share price has doubled in the last 6 months.

Company Description

O’Reilly Automotive, Inc. is a specialty retailer of automotive aftermarket parts, tools and supplies in the United States. The company was founded in 1957, operates over 3,300 stores and has a market cap of $5.11 billion.

First-Quarter Results

O’Reilly impressed the Street on Apr 29 when the company reported first-quarter results that were ahead of expectations. Revenue was up 80% from last year, helped by the acquisition of CSK stores, to $1.16 billion. Income was up 36% to $62.8 million, producing earnings of 47 cents per share, 7 cents ahead of the consensus.

Commenting on the CSK acquisition, O’Reilly CEO Greg Henslee said that “we have received very encouraging feedback from our CSK store managers who continue to see benefits of these inventory levels.

Guidance and Estimates

O’Reilly also provided earnings guidance when reporting its results, saying it expects first-quarter earnings of 50 to 54 cents and full-year earnings between $1.89 to $1.93.

Analysts are bullish on the company too, with the next-year estimate pegged at $2.39 per share, a 22% earnings growth projection.

Zacks Industry Rank

O’Reilly is operating in the number 3 Zacks industry rank out of 217, distinguished territory on all accounts.

Valuations

Based upon the current-year estimate this stock is trading with a forward P/E multiple of just under 20X, a fairly steep premium to the overall market.

The Chart

Shares of ORLY have taken flight in the tough economy as consumers upgrade old cars instead of buying new. Take a look at the nice rally in the chart below.

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