A month has gone by since the last earnings report for Copart, Inc. (CPRT). Shares have lost about 1.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Copart, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Copart Q3 Earnings & Revenues Beat Eatimates
Copart, Inc. reported third-quarter fiscal 2023 (ended Apr 30, 2023) adjusted earnings per share of 72 cents, beating the Zacks Consensus Estimate of 62 cents. The outperformance was due to higher-than-anticipated service revenues. The bottom line also increased 24.1% year over year.
The online auto auction leader generated revenues of $1,021.8 million, beating the Zacks Consensus Estimate of $1,013.1 million. The top line also increased 8.7% from the year-ago reported figure.
Key Stats
Fiscal third-quarter service revenues came in at $847.2 million, up from $766.3 million recorded in the year-earlier period, outpacing the Zacks Consensus Estimate of $814 million.
Service revenues accounted for 82.9% of the total revenues. Vehicle sales totaled $174.6 million in the quarter, up from the prior year’s level of $173.6 million. The figure, however, lagged the Zacks Consensus Estimate of $185 million.
Gross profit was up 10.8% year over year to $483.4 million. Total operating expenses flared up 6.3% to $602.9 million. General and administrative expenses rose 4.4% from the prior-year quarter to $52.3 million. Operating income rose to $418.9 million from $372.8 million recorded in the year-ago quarter. Net income also shot up 25.8% year over year to $350.4 million.
Copart had cash, cash equivalents and restricted cash of $2,114.2 million as of Apr 30, 2023 compared with $1,384.2 million as of Jul 31, 2022. Long-term debt rose to $22.3 million at the end of the reported quarter from roughly $2 million as of Jul 31, 2022.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
At this time, Copart, Inc. has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Copart, Inc. has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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