Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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Current Valuation Ratios
O’Reilly Automotive Inc., current price multiples
| O’Reilly Automotive Inc. | Amazon.com Inc. | Home Depot Inc. | Lowe’s Cos. Inc. | TJX Cos. Inc. | Consumer Discretionary Distribution & Retail | Consumer Discretionary | ||||
|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||
| Current share price (P) | ||||||||||
| No. shares of common stock outstanding | ||||||||||
| Growth rate (g) | ||||||||||
| Earnings per share (EPS) | ||||||||||
| Next year expected EPS | ||||||||||
| Operating profit per share | ||||||||||
| Sales per share | ||||||||||
| Book value per share (BVPS) | ||||||||||
| Valuation Ratios (Price Multiples) | ||||||||||
| Price to earnings (P/E) | ||||||||||
| Price to next year expected earnings | ||||||||||
| Price-earnings-growth (PEG) | ||||||||||
| Price to operating profit (P/OP) | ||||||||||
| Price to sales (P/S) | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
O’Reilly Automotive Inc., historical price multiples
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Price to Earnings (P/E) Ratio
- The P/E ratio showed an overall moderate fluctuation over the five-year period. It increased from 18.02 in 2017 to a peak of 21.77 in 2018, suggesting rising investor expectations or improved earnings prospects during that year. Following 2018, the ratio declined to 19.85 in 2019 and further to 17.92 in 2020, indicating a possible reduction in earnings growth expectations or improved earnings relative to share price. In 2021, the ratio rebounded slightly to 19.98, reflecting a modest increase in market valuation relative to earnings.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio experienced noticeable variability across the period. It rose from 11.84 in 2017 to a high of 15.89 in 2018, mirroring the trend seen in the P/E ratio and suggesting heightened valuation relative to operating profit. The ratio subsequently decreased to 14.38 in 2019 and further declined to 12.98 in 2020, potentially reflecting strengthening operating profits or a revaluation of the stock. In 2021, the ratio increased again to 14.82, indicating some rebound in investor valuation relative to operating profit.
- Price to Sales (P/S) Ratio
- The P/S ratio demonstrated an upward trend overall. Starting at 2.28 in 2017, it increased substantially to 3.02 in 2018. After a slight dip to 2.72 in 2019 and stability at 2.71 in 2020, the ratio rose appreciably to 3.24 in 2021. This progression suggests increasing market valuation relative to sales, possibly driven by improved sales performance, investor optimism, or both.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio displayed significant volatility and an overall steep increase until 2020, starting at 31.29 in 2017 and escalating sharply to 81.54 in 2018 and then decreasing slightly to 69.5 in 2019. It then surged dramatically to 223.91 in 2020, reflecting a substantial rise in market value relative to book equity. Data for 2021 is not available, preventing further analysis of this trend. This sharp increase may imply high investor confidence, market speculation, or a reduced book value during this period.
Price to Earnings (P/E)
O’Reilly Automotive Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (in thousands) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| P/E Ratio, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of O’Reilly Automotive Inc. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The financial data over the five-year period from 2017 to 2021 reveals several significant trends and insights.
- Share Price
- The share price demonstrated a consistent upward trend, increasing notably each year. Starting at $244.19 at the end of 2017, it rose to $649.24 by the end of 2021. This represents a substantial growth, with the most pronounced gain occurring between 2020 and 2021.
- Earnings Per Share (EPS)
- EPS showed continuous improvement over the period, increasing from $13.55 in 2017 to $32.50 in 2021. The growth in EPS aligns closely with the increase in share price, indicating strengthening profitability. The most significant year-over-year EPS increase was observed between 2019 and 2020.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio fluctuated over time, starting at 18.02 in 2017, peaking at 21.77 in 2018, then generally declining to 17.92 by 2020 before rising again to 19.98 in 2021. This pattern suggests varying market valuation relative to earnings, with a relatively lower valuation in 2020 despite rising EPS and share price.
Overall, the data indicates strong financial performance marked by increasing profitability and rising market valuation. The share price growth outpaced EPS growth slightly, as reflected in the fluctuations in the P/E ratio. The temporary dip in the P/E ratio around 2020 could imply market corrections or external factors influencing investor perceptions at that time.
Price to Operating Profit (P/OP)
O’Reilly Automotive Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| P/OP Ratio, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of O’Reilly Automotive Inc. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The annual financial data reflects several notable trends and changes in key performance indicators over the five-year period.
- Share Price
- The share price exhibited a strong upward trajectory, increasing from $244.19 at the end of 2017 to $649.24 by the end of 2021. This represents a significant appreciation, with the most substantial gains occurring between 2020 and 2021, where the price rose sharply from $447.33 to $649.24.
- Operating Profit Per Share
- The operating profit per share consistently increased each year, starting at $20.62 in 2017 and reaching $43.80 in 2021. This steady growth indicates improving operational profitability on a per-share basis, with a particularly notable jump between 2019 and 2020, where the value grew from $25.64 to $34.46.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio showed some fluctuations during the period. It rose from 11.84 in 2017 to a peak of 15.89 in 2018, followed by a modest decline to 14.38 in 2019 and further to 12.98 in 2020. However, the ratio increased again to 14.82 in 2021. These fluctuations suggest varying market sentiment or investor expectations relative to operating profitability, with the ratio generally remaining within a moderate range.
Price to Sales (P/S)
O’Reilly Automotive Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Sales (in thousands) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| P/S Ratio, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Sales ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of O’Reilly Automotive Inc. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the annual financial data over the period from 2017 to 2021 reveals several noteworthy trends in key metrics.
- Share Price
- The share price exhibited a strong and consistent upward trend throughout the five-year period. Starting at $244.19 in 2017, it increased steadily each year to reach $649.24 by the end of 2021. This represents a significant appreciation in market value, reflecting positive investor sentiment and growth expectations.
- Sales Per Share
- Sales per share also demonstrated a continuous increase over the observed period. Beginning at $107.30 in 2017, sales per share rose to $200.11 by 2021. This steady growth suggests ongoing improvements in revenue generation on a per-share basis, indicative of expanding operational scale or enhanced sales efficiency.
- Price-to-Sales (P/S) Ratio
- The P/S ratio showed some fluctuations but remained generally elevated. Starting at 2.28 in 2017, it increased to a peak of 3.02 in 2018, then dipped to 2.71 through 2019 and 2020, before rising again to 3.24 in 2021. The elevated P/S ratios indicate that the market consistently valued the company’s sales highly relative to price, with some variability potentially reflecting changing investor expectations or market dynamics.
Overall, the data reflects a favorable growth trajectory marked by rising share price and sales per share, alongside a generally high valuation relative to sales. This profile is indicative of a company with strengthening financial performance and strong market confidence during the period under review.
Price to Book Value (P/BV)
O’Reilly Automotive Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Shareholders’ equity (deficit) (in thousands) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Amazon.com Inc. | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| P/BV Ratio, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Shareholders’ equity (deficit) ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of O’Reilly Automotive Inc. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The financial data reveals notable trends relating to the company's share price, book value per share (BVPS), and price-to-book value (P/BV) ratio over the five-year period ending December 31, 2021.
- Share Price
- The share price exhibited a consistent upward trend throughout the examined years. Starting at $244.19 in 2017, the price increased significantly each year, reaching $649.24 by the end of 2021. This represents a near tripling in value over the period, indicative of strong market confidence and possibly improved company performance or investor sentiment.
- Book Value Per Share (BVPS)
- The book value per share displayed a contrasting downward trajectory. It began at $7.80 in 2017 and declined to $4.51 in 2018, followed by a slight recovery to $5.31 in 2019. However, the downward trend resumed in 2020, with the BVPS falling to $2.00 and ultimately becoming negative at -$1.00 by 2021. This suggests a deterioration in the company's net asset value on a per-share basis over time, potentially due to liabilities exceeding assets or significant losses.
- Price-to-Book Value (P/BV) Ratio
- The P/BV ratio demonstrates a high market valuation relative to the book value per share, a consequence of the declining BVPS alongside the rising share price. Starting at 31.29 in 2017, the ratio increased markedly to 81.54 in 2018 and 69.50 in 2019. It then surged dramatically to 223.91 in 2020, reflecting a disproportionately high market valuation compared to the company's book value. The absence of a reported value for 2021 may be attributed to the negative BVPS, which renders the calculation nonsensical or undefined.
In summary, the data indicates that the company’s market capitalization, as reflected by the share price, grew substantially during the period, while its underlying book value per share weakened, culminating in a negative figure. This dynamic resulted in exceedingly high price-to-book ratios, signifying that investors may be pricing in growth prospects, intangibles, or market expectations beyond the net asset base. The divergent trends between market and book values should prompt careful consideration of the company's financial health and market valuation drivers.