W hen it comes to accelerating profit, O’Reilly Automotive operates in high gear.O’Reilly ( ORLY ), highly rated by IBD, has logged 16 straight quarters of double-digit profit growth.

Analysts see it staying in the fast lane as the specialty retailer of aftermarket auto parts continues to rev up its business by luring commercial and do-it-yourself customers with top-flight service, a deep and broad-based inventory and far-flung distribution capabilities.

Lower gas prices should prompt people to drive more and put more stress on their cars, fueling demand for parts and services from O’Reilly and its large auto parts retail peers, includingAutoZone ( AZO ) andAdvance Auto Parts ( AAP ), analysts say.

Last year, O’Reilly and other auto parts retailers got a nice jolt from the extremely cold winter, which increased wear and tear on cars, driving up demand for auto parts.

DIY Does Well

O’Reilly generates about 58% of its sales from do-it-yourself customers, who take on their own repairs, and the remaining 42% from professional service providers, including garages, repair shops and paint and body shops.

At the end of last year it had 4,366 stores in 43 states. It has 26 regional distribution centers.

O’Reilly’s stock has been enjoying an impressive run. The company’s share price shot up 50% in 2014. It’s risen 8% so far this year.

Why the investor enthusiasm?

The industry had very favorable weather last year, which helped create a lot of demand, said SunTrust Robinson Humphrey analyst Robert Higginbotham. Everyone’s revenue grew nicely. Just as that tailwind seemed to fade, gas prices fell. So there was a nice handoff from weather to lower gas prices.

O’Reilly and other auto parts retailers have been consolidating the industry and taking share from the mom-and-pop players, he adds, which has increased their negotiating power with a very fragmented vendor base.

That has driven big gains in margin and working capital efficiency, which has also (helped) the stock performance. he said. With longer and longer payment terms from their vendors — having more days to pay — players like O’Reilly have been able to fund inventory at almost zero cost, which allows them to take even more share from the mom-and-pops. (That) leads to even better negotiating leverage and so on, a dynamic which (I refer) to as the ‘auto parts retail virtuous cycle.’

O’Reilly’s stock popped around 8% on Feb. 5, following a strong fourth-quarter report late the day before.

Earnings climbed 26% to $1.76 a share, ahead of the consensus view of analysts polled by Thomson Reuters. Revenue rose 9% to $1.76 billion, also beating forecasts.

Same-store sales rose a hefty 6.3% from a year earlier.

O’Reilly management did not respond to a phone call requesting a comment for this story.

The company announced that it approved a resolution to increase the authorization amount under its share repurchase program by an additional $500 million, raising the aggregate authorization to $5 billion. The additional $500 million is effective for a three-year period beginning on Feb. 4.

Robert W. Baird & Co. analyst Craig Kennison calls O’Reilly a wonderful company.

At the end of the day, commercial repair shops are in the business of fixing cars and the best way to serve them is to have the right part at the right time at the right price when they need it, he said. It’s about parts fulfillment. I think O’Reilly has the right distribution infrastructure to get parts to consumers and repair shops when they need it.

If you look at the financial metrics, (O’Reilly generates) a tremendous return on capital, it has very strong cash flow and a good (stock) buyback strategy to return capital to shareholders, he added.

What differentiates O’Reilly from the other auto parts retailers is that it has the strongest history and most consistent execution of a mix of retail and commercial businesses, adds Higginbotham.

He says that auto parts retailers that historically have had a retail focus are moving more into the commercial business.

O’Reilly has the most dense distribution of all the players, he added. It has the most distribution centers per store. That allows them to fulfill orders more efficiently, more often, which is more crucial in the commercial business than the retail business.

The commercial business, Higginbotham adds, is a different ball game in terms of having to be able to say yes to as many requests as possible. He says that having the supply of products to meet the requests means investing a lot in inventory and distribution.

O’Reilly is best at doing that, he said.

Higginbotham says that several years ago, store growth was the big driver of O’Reilly’s strong performance.

More recently, it’s been a function of the company’s superiority in terms of execution, which has helped it gain a lot of market share, he adds.

Analysts polled by Thomson Reuters expect O’Reilly to see a 16% rise in full-year 2015 earnings to $8.55 a share. They expect a 13% gain in 2016 and a 14% increase in 2017 — lower growth than in years past but still strong.

Low Gas Prices Drive Business

Lower gas prices should be a nice tailwind for the industry, says Higginbotham.

Lower gas prices are an important driver because if gas is cheaper, people tend to drive more and it puts more wear and tear on their cars, he said.

They tend to benefit the low-income consumer — the do-it-yourself customer — the most, he adds.

Lower gas prices can have a meaningful impact on spending on car repairs, adds Kennison.

In a tough economy people will defer spending on car repairs, he said. At some point the deferment catches up.

Lower gas prices give consumers the resources to fix some deferred maintenance items.

O’Reilly is part of IBD’s Retail-Wholesale-Auto Parts industry group, which also includes Advance Auto Parts, AutoZone,Copart ( CPRT ),Pep Boys ( PBY ) and a handful of others. O’Reilly gets the highest IBD Composite Rating of those companies, a 98 out of a possible 99, factoring in metrics such as earnings growth and stock price gains.