O’Reilly Automotive ORLY is slated to release first-quarter 2025 results on April 23, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s EPS and revenues is pegged at $9.83 and $4.17 billion, respectively.

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For the first quarter, the consensus estimate for O’Reilly’s earnings has moved down by a penny in the past seven days. Its bottom-line estimates imply 6.85% growth from the year-ago reported numbers.

The Zacks Consensus Estimate for ORLY's quarterly revenues implies a year-over-year increase of 4.88%. The company's earnings beat estimates in two of the trailing four quarters and missed twice, delivering an average negative surprise of 0.48%. This is depicted in the graph below:

O'Reilly Automotive, Inc. Price and EPS Surprise

O'Reilly Automotive, Inc. price-eps-surprise | O'Reilly Automotive, Inc. Quote

Q4 Highlights

In the fourth quarter of 2024, ORLY’s adjusted EPS of $9.96 beat the Zacks Consensus Estimate of $9.71 and increased from $9.26 reported in the year-ago quarter. The company reported net sales of $4.1 billion, which beat the Zacks Consensus Estimate of $4.03 billion. The top line rose 7% year over year.

Things to Note

Per Cox Automotive, in the first quarter of 2025, the U.S. new vehicle sales are anticipated to rise 0.6% year over year to 3.79 million units. O’Reilly is expected to have benefited from an increase in demand for new vehicles in the to-be-reported quarter. We expect comparable sales growth to be 1.8% in the first quarter of 2025.

ORLY has been generating record revenues for 32 consecutive years. The trend is likely to have continued on the back of growth in the auto parts market, vehicle longevity, store expansion, a strong distribution network and a customer-centric business model. It envisions 2025 revenues in the band of $17.4-$17.7 billion, up from $16.71 billion recorded in 2024. 

The company plans to increase its inventory level for the rest of the year to make sure there's enough stock in its stores, hubs and distribution centers. This will help keep products available in all the markets it serves. For 2025, the company aims to grow its inventory per store by 5%.

However, in 2024, per-store SG&A expenses rose 4.6% year over year. For 2025, the company expects per-store SG&A expense growth of 2-2.5% amid wage pressures and rising investments in hub stores and technology. 

While a positive sales outlook for 2025 is likely to have bolstered ORLY’s top-line growth in the to-be-reported quarter, rising SG&A expense is likely to have put pressure on its margins.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for the automotive parts retailer for the quarter to be reported, as it does not have the right combination of the two key ingredients. A positive Earnings ESP, combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. This is not the case here.

Earnings ESP: ORLY has an Earnings ESP of -0.78%. This is because the Most Accurate Estimate is pegged lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3.

Stocks With the Favorable Combination

Here are some players from the auto space that, per our model, have the correct ingredients to post an earnings beat this time around.

Aptiv PLC APTV has an Earnings ESP of +12.45% and a Zacks Rank #3 at present. The company is set to release first-quarter 2025 results on May 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for APTV’s to-be-reported quarter’s earnings and revenues is pegged at $1.53 per share and $4.77 billion, respectively. APTV beat earnings estimates in each of the trailing four quarters, the average surprise being 9.88%.

Ferrari N.V. RACE has an Earnings ESP of +10.75% and a Zacks Rank #3 at present. The company is set to release first-quarter 2025 results on May 6. 

The Zacks Consensus Estimate for RACE’s to-be-reported quarter’s earnings and revenues is pegged at $2.36 per share and $1.85 billion, respectively. Ferrari beat earnings estimates in each of the trailing four quarters, the average surprise being 11.10%.

BorgWarner Inc. BWA has an Earnings ESP of +5.24% and a Zacks Rank #3 at present. The company is set to release first-quarter 2025 results on May 7. 

The Zacks Consensus Estimate for BWA’s to-be-reported quarter’s earnings and revenues is pegged at 97 cents per share and $3.38 billion, respectively. BorgWarner beat earnings estimates in each of the trailing four quarters, the average surprise being 17.02%.

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BorgWarner Inc. (BWA) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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