Why O'Reilly Shares Zoomed Ahead

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of auto parts retailer O'Reilly Automotive (NASDAQ: ORLY  ) climbed 10% today after its quarterly results and outlook topped Wall Street expectations.

So what: O'Reilly's fourth-quarter profit beat -- EPS of $1.14 versus the consensus of $1.08 -- and full-year outlook were so strong that analysts have no choice but to raise their valuation estimates on the stock. In fact, comparable stores sales increased 4.2% over the year-ago period, even exceeding management's own guidance range of 2%-4%, giving investors plenty of good vibes over profitable growth going forward.

Now what: Management now sees full-year 2013 EPS of $5.57-$5.67, well ahead of Wall Street's view of $5.44.

"During 2013, we will continue our unyielding focus on profitable growth and on providing unsurpassed customer service and we look forward to another profitable year," said President and CEO Greg Henslee in a statement.

With the stock now up about 35% from its 52-week lows and trading at a 20-plus P/E, however, I'd wait for some of the investor enthusiasm to wear off before buying into that bull talk.

Interested in more info O'Reilly? Add it to your watchlist.


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