O’Reilly Automotive (NASDAQ: ORLY) has historically been a great business to own. The stock is up 694% over the past decade, which could come as a shock to investors who might only expect this type of return from a technology stock.
But despite the long-term track record, this automotive aftermarket parts retailer is currently only trading at a trailing P/E ratio of 20, which is quite attractive given the level of the overall market.
With more people working from home due to the coronavirus pandemic, O’Reilly’s stock has been under pressure as investors ponder just how permanent this shift in behavior will be. Less commuting to the office means less driving, which ultimately translates to less demand for O’Reilly’s products.