AAP vs AZO vs ORLY

For growth investors, O'Reilly Automotive, Inc.

(ORLY) is the stronger pick with 6. 4% revenue growth year-over-year, versus -5. 4% for Advance Auto Parts, Inc. (AAP). AutoZone, Inc. (AZO) offers the better valuation at 24. 5x trailing P/E (23. 9x forward), making it the more compelling value choice. Analysts rate AutoZone, Inc. (AZO) a "Buy" — based on 45 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, AutoZone, Inc.

(AZO) is the cheapest at 24. 5x versus Advance Auto Parts, Inc. at 78. 4x. On forward P/E, Advance Auto Parts, Inc. is actually cheaper at 20. 7x — notably different from the trailing picture, reflecting expected earnings growth. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: AutoZone, Inc. wins at 1. 59x versus O'Reilly Automotive, Inc. 's 2. 34x — a reasonable growth-adjusted valuation.

Over the past 5 years, O'Reilly Automotive, Inc.

(ORLY) delivered a total return of +152. 3%, compared to -65. 4% for Advance Auto Parts, Inc. (AAP). Over 10 years, the gap is even starker: ORLY returned +431. 0% versus AAP's -52. 1%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), O'Reilly Automotive, Inc.

(ORLY) is the lower-risk stock at 0. 14β versus Advance Auto Parts, Inc. 's 1. 42β — meaning AAP is approximately 896% more volatile than ORLY relative to the S&P 500.

By revenue growth (latest reported year), O'Reilly Automotive, Inc.

(ORLY) is pulling ahead at 6. 4% versus -5. 4% for Advance Auto Parts, Inc. (AAP). On earnings-per-share growth, the picture is similar: Advance Auto Parts, Inc. grew EPS 113. 0% year-over-year, compared to -3. 1% for AutoZone, Inc.. Over a 3-year CAGR, ORLY leads at 7. 3% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

O'Reilly Automotive, Inc.

(ORLY) is the more profitable company, earning 14. 3% net margin versus 0. 5% for Advance Auto Parts, Inc. — meaning it keeps 14. 3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: ORLY leads at 19. 5% versus 1. 9% for AAP. At the gross margin level — before operating expenses — AZO leads at 52. 6%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, AutoZone, Inc. (AZO) is the more undervalued stock at a PEG of 1. 59x versus O'Reilly Automotive, Inc. 's 2. 34x. Both stocks trade at elevated growth-adjusted valuations, so expected growth needs to materialise. On forward earnings alone, Advance Auto Parts, Inc. (AAP) trades at 20. 7x forward P/E versus 29. 2x for O'Reilly Automotive, Inc. — 8. 5x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for AZO: 19. 2% to $4235. 71.

In this comparison, AAP (1.

7% yield) pays a dividend. AZO, ORLY do not pay a meaningful dividend and should not be held primarily for income.

For long-horizon retirement investors, O'Reilly Automotive, Inc.

(ORLY) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 14), +431. 0% 10Y return). Both have compounded well over 10 years (ORLY: +431. 0%, AAP: -52. 1%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Consumer Cyclical sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

AAP pays a dividend while AZO, ORLY do not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.