Copart, Inc.: Analyzing Recent Performance Amidst Economic Shifts
Dallas, Texas-based Copart, Inc. (CPRT) specializes in online auctions and vehicle remarketing, boasting a market cap of $50.5 billion. The company extends its operations across the U.S., Canada, Brazil, and various European and Asian nations, offering services such as transaction facilitation, salvage value estimations, transportation, and financing.
Stumbling Stock Performance Compared to Market
Over the last year, Copart’s stock has not kept pace with broader market trends. In 2024, CPRT stock has increased by 8.4%, and it is up 15.6% for the past 52-week period. These numbers fall short of the S&P 500 Index’s gains of 20.3% year-to-date (YTD) and 31.6% over the last year. Similarly, the Industrial Select Sector SPDR Fund’s (XLI) raised 18% YTD and 32.4% across the past 52 weeks, further highlighting Copart’s underperformance.
Mixed Earnings Results Spark Stock Decline
Copart experienced a sharp stock decline of 6.7% following its fiscal 2024 earnings report on Sept. 4. The company achieved a notable 9.5% year-over-year growth in total revenues, reaching $4.2 billion, driven by an 11.3% increase in service revenues, amounting to $3.6 billion. Conversely, the company’s Q4 earnings showed a steep drop, with earnings per share (EPS) decreasing 8.3% from the previous year to $0.33. This decline was mainly due to a substantial 16.9% rise in total operating expenses, which hit $709.5 million, ultimately compressing net and operating margins.
Future Outlook and Analyst Ratings
Looking ahead to the current fiscal year, which concludes in July 2025, analysts project a 10% year-over-year growth in adjusted EPS, estimating it to reach $1.54. Copart’s earnings surprise history reveals a mixed performance, successfully beating analysts’ earnings estimates in two out of the last four quarters, while falling short in the other two, including a 10.8% miss in the last quarter’s EPS of $0.33.
The consensus among analysts gives CPRT a “Moderate Buy” rating. Out of seven analysts following the stock, four have recommended a “Strong Buy,” and three have advised a “Hold” rating.
Price Target Adjustments by Analysts
On Sept. 5, analyst Craig Kennison from Baird re affirmed his “Outperform” rating on Copart, adjusting the price target downward to $56. The mean price target now stands at $58.57, reflecting an 11.7% potential increase from current price levels. Additionally, the street-high target reaches $64, suggesting a possible upside of 22%.
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On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
