Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- O'Reilly Automotive (Nasdaq: ORLY) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- O'REILLY AUTOMOTIVE INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, O'REILLY AUTOMOTIVE INC increased its bottom line by earning $3.72 versus $2.97 in the prior year. This year, the market expects an improvement in earnings ($4.68 versus $3.72).
- ORLY's revenue growth trails the industry average of 22.2%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Specialty Retail industry and the overall market, O'REILLY AUTOMOTIVE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The gross profit margin for O'REILLY AUTOMOTIVE INC is rather high; currently it is at 53.20%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 9.94% is above that of the industry average.
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