Has anyone been keeping up with ORLY? I reviewed the latest earnings report and 10Q and the Co is definitely slowing. With the price of gas, and the slowing economy, many car owners, especially the DIY croud, are putting off repairs. I updated my SSG after looking at the latest report...
ORLY
SALES
SSG-10yr 17%, 5yr 14.3%, 3yr 11%, 1yr 8.3% Sales growth is definitely slowing
Take Stock future growth 10.4%
VL Rev/Sh 9.5%
VL Rev Calc 11.3%
Implied 12%
Desired 9.3% (Based on company size)
Co. Guidance: The Co does offer guidance for future sales: sales of $2,700M to $2,800M (7.7% to 13%). However, they also did give guidance of 3% 5% for comparable store sales. They also predicted opening 140 to 150 new stores this year. Average sales for the 1st year from a new store is $0.9M. They also had sales of $16.2M to independent “jobbers” but would not give any guidance concerning growth or lack of growth from these sales. Using all these numbers (Comp of 3%-5% starting at $2555M, new stores adding $126M to $135M and keeping the independent jobbers that same as last year) I came up with sales growth of 8.64% (comp of 3% and 140 new stores) to 10.98% (5% comps and 150 new stores) For my SSG I used 9.8% sales growth which is in the middle of these figures.
EPS
Sales growth has been greater than earnings growth for the past 6 quarters.
Preferred procedure: earnings growth of 9.5%; EPS in 5 years=$2.61 (VL=$3.10)
Preferred procedure with VL future figures shows growth of 14% EPS=$3.20
Take Stock: Graph 7.2% growth EPS=$2.36
Business Model 9.64% EPS=$2.63
Guidance for this year: $1.81 (8.38% growth) to $1.85 (11.45% growth)
$1.82 (9.5% growth from preferred procedure) See PPT
ACE 11.5% to 14%
MANAGEMENT
SSG: up, up and down See PPT
VL Industry Average: ORLY Higher Gross Margin, Higher Operating margin, Higher Net Profit margin, Lower ROE.
Ratio Analyzer: Latest QTR not available yet. Last QTR was very good.
FUTURE PE
PERT B 5 year average Hi 23.6 Low 16.3 High PE trending down
Recent High PE 24 in 6-07 at price of $38.84; Recent Low PE 14.3 in 1-08 at price $24.08. Current PE 17.0
VL Future High PE 17.7; Low PE 12.9
Take Stock High 23; Low 13.3
PE RV 96.3 See PPT
FUTURE PRICE
5 year price with High PE=$57.42 a 103% increase/cmpd ret of 15.2% See PPT
5 year price with Average PE=$46.20 a 63.2% increase/cmpd ret of 10.3%
Cash Flow price=$50.05 a 76.9% increase/cmpd ret 12.3%
PMG graph shows a buy from price and PE charts
Take Stock rank=3.2
This is a stock that was highly regarded in the past but has since fallen.The biggest problem for the Co. is a slowing of sales and earnings growth. Although the current PE is below the future average PE, I think it best to view the stock as a "value trap" and avoid buying shares for now. Any other thoughts?
|