Copart (CPRT) AI Stock Analysis

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Copart

(NASDAQ:CPRT)

81Outperform

Copart's strong financial performance and positive earnings call sentiment are key drivers of its high stock score. The company's strategic advancements and robust revenue growth, particularly in non-insurance segments, bolster its outlook. However, a high P/E ratio and valuation concerns slightly temper the score. Overall, Copart exhibits a compelling growth trajectory with solid financial health.

Positive Factors

Business Expansion

The expansion of the business with sellers that include financial institutions, rental car fleets, and corporate fleets are also driving growth for the company.

Financial Performance

Global service revenue increased 15% to $991 million, while purchased vehicle sales rose 8.6% to $172 million.

Technology and Innovation

Proactive levers that are driving CPRT’s growth include in-house AI-enabled image recognition tools, which can empower insurance companies to total cars more accurately and more effectively.

Negative Factors

Hurricane Impact

Hurricanes Helene and Milton boosted revenue by $15 million, but Copart incurred $29 million in related expenses in the quarter – with an additional $18 million capitalized to be expensed in future periods.

Operational Costs

Global facility-related costs increased by $88 million (or 22%).

Valuation Concerns

Copart operates a unique business with a wide moat backed by network effects and secular growth trends, making it a core holding for long-term investors despite an aggressive valuation.

Copart (CPRT) vs. S&P 500 (SPY)

Market Cap

$58.74B

Dividend YieldN/A

Average Volume (3M)5.33M

Price to Earnings (P/E)40.8

Beta (1Y)0.96

Revenue Growth11.00%

EPS Growth6.53%

CountryUS

Employees13,086

SectorIndustrials

Sector Strength80

IndustryAuto - Dealerships

Share Statistics

EPS (TTM)0.40

Shares Outstanding966,092,960

10 Day Avg. Volume3,802,391

30 Day Avg. Volume5,326,490

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.90

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit27.33

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$64.00

Price Target Upside3.59% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Copart Business Overview & Revenue Model

Company DescriptionCopart, Inc., headquartered in Dallas, Texas, is a global leader in online vehicle auctions. Established in 1982, Copart provides an innovative platform for the resale and remarketing of vehicles, primarily via online auctions. The company caters to a wide array of sectors, including insurance companies, banks, financial institutions, car dealerships, fleet operators, and individual consumers, offering them a reliable solution for buying and selling vehicles. Copart's core services involve processing and auctioning vehicles that are damaged, totaled, or repossessed, thus serving as a crucial intermediary in the automotive supply chain.

How the Company Makes MoneyCopart generates revenue primarily through its online auction platform, where it facilitates the sale of vehicles on behalf of its clients, such as insurance companies and financial institutions. The company earns fees from sellers for listing vehicles and from buyers as a transaction fee when a vehicle is purchased. Additionally, Copart offers value-added services, including vehicle transportation, storage, and processing fees, which contribute to its revenue stream. The company's global presence and network of physical facilities further enhance its service capabilities, enabling it to handle a high volume of vehicle transactions. Partnerships with insurance companies and other vehicle sellers are significant, as they provide a steady supply of vehicles to the auction platform, thus driving Copart's business operations and profitability.

Copart Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Highlights income from different business areas, providing insight into which segments drive growth and profitability, and indicating potential areas for expansion or risk.

Chart InsightsCopart's Services segment continues to show strong growth, with recent quarters reflecting a steady upward trend. This aligns with the company's earnings call, which highlighted a 15% increase in service revenue, driven by strategic investments in technology like Title Express. Despite challenges such as decreased inventory and increased facility costs, the robust growth in both insurance and non-insurance segments, particularly the 27% rise in Blue Car volume, underscores Copart's resilience and strategic focus on enhancing operational efficiencies and expanding its market presence.

Data provided by:

Main Street Data

Copart Financial Statement Overview

Summary

Copart exhibits strong financial performance. The income statement shows excellent profitability with high net and gross profit margins, and a solid revenue growth rate. The balance sheet indicates low leverage with a significant equity ratio and impressive ROE. Cash flow generation is robust, with healthy free cash flow growth and effective capital management.

Income Statement

―

Copart's income statement indicates strong profitability and growth. The Gross Profit Margin stands at 58.65% for TTM, reflecting efficient cost management. Net Profit Margin is a robust 32.27%, indicating high profitability. Revenue Growth Rate is 6.37% year-over-year, suggesting solid growth momentum. EBIT and EBITDA Margins are 36.15% and 38.30% respectively, showcasing strong operational efficiency.

Balance Sheet

The balance sheet shows financial stability with a low Debt-to-Equity Ratio of 0.01, indicating minimal reliance on debt. The Return on Equity (ROE) is impressive at 17.52%, reflecting high returns to shareholders. The Equity Ratio is 90.38%, signaling a firm equity foundation. Overall, the company's balance sheet portrays low leverage and strong equity positioning.

Cash Flow

―

Copart's cash flow statement highlights robust cash generation. The Free Cash Flow Growth Rate is 5.71%, indicating healthy cash flow expansion. Operating Cash Flow to Net Income Ratio is 1.10, suggesting effective cash generation from operations. Free Cash Flow to Net Income Ratio is 0.70, demonstrating good conversion of earnings into cash flow despite significant capital expenditures.

Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
4.24B	3.87B	3.50B	2.69B	2.21B
	Gross Profit
1.94B	1.74B	1.61B	1.34B	1.01B
	EBIT
1.57B	1.49B	1.37B	1.14B	816.10M
	EBITDA
1.76B	1.49B	1.37B	1.14B	922.46M
	Net Income Common Stockholders
1.36B	1.24B	1.09B	936.50M	699.91M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.42B	2.36B	1.38B	1.05B	477.72M
	Total Assets
8.43B	6.74B	5.31B	4.56B	3.46B
	Total Debt
118.73M	120.45M	119.47M	518.07M	518.19M
	Net Debt
-1.40B	-836.94M	-1.26B	-530.19M	40.47M
	Total Liabilities
879.21M	750.44M	683.26M	1.03B	965.75M
	Stockholders Equity
7.52B	5.99B	4.63B	3.53B	2.49B
Cash Flow		Free Cash Flow
961.57M	847.57M	839.24M	527.89M	314.21M
	Operating Cash Flow
1.47B	1.36B	1.18B	990.89M	917.88M
	Investing Cash Flow
-940.08M	-1.89B	-442.31M	-465.47M	-601.21M
	Financing Cash Flow
19.27M	66.61M	-382.69M	40.92M	-27.41M

Copart Technical Analysis

Technical Analysis Sentiment

Positive

Last Price61.78

Price Trends

50DMA

57.08

Positive

100DMA

57.49

Positive

200DMA

55.74

Positive

Market Momentum

MACD

1.14

Positive

RSI

60.81

Neutral

STOCH

75.67

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPRT, the sentiment is Positive. The current price of 61.78 is above the 20-day moving average (MA) of 60.59, above the 50-day MA of 57.08, and above the 200-day MA of 55.74, indicating a bullish trend. The MACD of 1.14 indicates Positive momentum. The RSI at 60.81 is Neutral, neither overbought nor oversold. The STOCH value of 75.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CPRT.

Copart Risk Analysis

Copart disclosed 34 risk factors in its most recent earnings report. Copart reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Copart Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CPRT	81 Outperform	$58.74B	40.84	19.28%	―	11.00%	6.53%
LAD	73 Outperform	$7.73B	9.40	12.95%	0.70%	12.96%	-6.25%
SAH	68 Neutral	$2.13B	8.95	24.52%	1.99%	1.59%	43.91%
ACVA	66 Neutral	$2.63B	―	-16.49%	―	32.89%	7.44%
KAR	64 Neutral	$2.08B	42.40	5.46%	―	9.42%	―
Sector *	64 Neutral	$4.24B	11.64	5.23%	249.83%	4.07%	-10.54%
KMX	61 Neutral	$10.13B	20.72	8.13%	―	-0.69%	6.27%

* Industrials Sector Average

Performance Comparison

CPRT

Copart

61.52

6.78

12.39%

KMX

CarMax

66.10

-5.61

-7.82%

KAR

OPENLANE

21.96

4.22

23.79%

LAD

Lithia Motors

305.65

43.19

16.46%

SAH

Sonic Automotive

64.89

8.09

14.24%

ACVA

ACV Auctions

16.38

-0.91

-5.26%

Copart Earnings Call Summary

Earnings Call Date:Feb 20, 2025

(Q2-2025)

% Change Since: 6.11%|

Next Earnings Date:May 14, 2025

Earnings Call Sentiment Positive

Copart Incorporated reported robust growth in global revenue, driven by strong performance in both insurance and non-insurance segments. The company's strategic investments in technology and services, such as Title Express, are yielding positive results. However, challenges remain, including decreased inventory and issues in the dealer segment. Despite these hurdles, the overall growth and strong financial position provide a positive outlook.

Q2-2025 Updates

Positive Updates

Global Revenue Growth

Global revenue increased by 14% to nearly $1.2 billion for the quarter, driven by increased volume and higher revenue per unit.

Insurance Business Expansion

Global insurance volume grew by 8% for the quarter compared to the same quarter last year, with over 1 million titles processed via Title Express.

Strong Non-Insurance Growth

Non-insurance unit volume increases continued to outpace insurance volume growth, with Blue Car showing over 27% growth year-over-year.

Purchase Vehicle Gross Profit Surge

Global purchase vehicle gross profit increased by 110% in the second quarter, with U.S. purchase vehicle gross profit up by 205%.

Purple Wave Performance

Purple Wave drove an 8% growth in gross transaction volume year-over-year, outperforming the industry.

Strong Cash Position

The company ended the quarter with over $5 billion in liquidity, including nearly $3.8 billion in cash.

Negative Updates

Inventory Decrease

Inventory decreased nearly 3% from the year-ago period, with U.S. inventory levels down about 4%.

Challenges in Dealer Segment

Dealer sales volume was flat year-over-year, with Co-Part Dealer Services declining by about 5%.

Facility-Related Cost Increase

Global facility-related costs increased by $81 million or about 20%, with U.S. costs up nearly 22%.

International Purchase Vehicle Revenue Decline

International purchase vehicle revenue decreased by over $18 million or 22%.

Company Guidance

During Copart's Second Quarter Fiscal 2025 earnings call, the company reported robust growth metrics and strategic advancements. The global unit sales increased by 8%, while inventory decreased by nearly 3% from the previous year. In the U.S., insurance unit volume rose by 9% year-over-year, with non-insurance unit volume, particularly Blue Car, experiencing a 27% increase. Internationally, units sold grew by over 8%, and fee units increased by 11%. The company's Title Express platform is processing over 1 million titles annually, underscoring its success in enhancing insurance workflows. Financially, global revenue rose by 14% to nearly $1.2 billion, with service revenue growing by 15%. The company's gross profit reached approximately $526 million, reflecting a 13% increase. Despite challenges, including potential tariffs and an evolving insurance landscape, Copart continues to invest in technology, real estate, and personnel to drive future growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.