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Copart’s Upcoming Earnings Report: A Deep Dive Copart (CPRT) to Report Q2 Earnings: What Lies Ahead?

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Copart, Inc. (CPRT) is geared up to unveil its second-quarter fiscal 2024 results on Feb 22, following the closing bell. The Zacks Consensus Estimate for the quarter’s earnings per share and revenues is set at 35 cents and $1.04 billion, respectively.

The Zacks Consensus Estimate for quarterly revenues denotes a 9.1% increase year over year. The Zacks Consensus Estimate for fiscal second-quarter earnings has held steady over the past 90 days. The bottom-line forecast hints at a 12.9% climb year over year.

In the preceding quarter, the Texas-based online vehicle auctioning company outperformed earnings estimates due to higher-than-expected service revenues, with the bottom line also marking a 36% year-over-year surge. Over the last four quarters, Copart has surpassed the Zacks Consensus Estimate each time, with an average surprise of 10.25%.

Copart, Inc. Price and EPS Surprise

Positive earnings expectations are reflected in the upward trajectory of the stock price as per the chart below.

Copart, Inc. Price and EPS Surprise

Source: Zacks.com

Factors at Play

The company is anticipated to have benefitted from sustained high salvage auction volumes, amid increased vehicle miles traveled and elevated collision frequency. Additionally, the prevalence of aging vehicles and advanced auto parts is expected to have a positive effect on Copart’s financials. The high costs associated with replacing such sophisticated components often result in insurance companies declaring vehicles as a total loss, thereby boosting Copart’s top-line performance. The company’s strong market presence, large scale, and ongoing expansion initiatives are likely to have driven sales.

Conversely, substantial investments to support growth strategies, including international and domestic business expansion, are expected to have exerted downward pressure on Copart’s margins in the reported quarter. The company has also grappled with escalating storage and labor costs. Operating expenses have been on the rise due to increasing G&A expenditure. In the last reported quarter, the company’s G&A expenditure soared 29.4% year over year, which may have weighed on its results in the to-be-reported quarter.

What the Zacks Model Says

Despite the positive aspects, our proven model does not definitively predict a beat for Copart this time around. The amalgamation of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) usually enhances the prospects of an earnings surprise, but this is not the case here.

Earnings ESP: The company has an Earnings ESP of 0.00%, given that the Most Accurate Estimate of earnings aligns with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Copart currently carries a Zacks Rank of 3.

Earnings Whispers for Other Auto Stocks

Nikola Corporation (NKLA) is slated to announce fourth-quarter earnings on Feb 22, with the Zacks Consensus Estimate at a loss of 16 cents per share. The company currently has an Earnings ESP of 0.00% and a Zacks Rank #3. On the other hand, Fisker Inc. (FSR) is expected to report fourth-quarter earnings on Feb 26, with the Zacks Consensus Estimate at a loss of 20 cents per share. The company currently has an Earnings ESP of 0.00% and a Zacks Rank #3.

Stay updated on all upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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