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Copart, Inc. (CPRT), with a market cap of $49.1 billion, is a leader in the online auction and vehicle remarketing industry. Headquartered in Dallas, Texas, Copart provides an extensive array of services focused on processing and selling salvage and clean title vehicles. The company primarily operates online, serving a diverse clientele of sellers and buyers across the globe.
Shares of Copart have slightly underperformed the broader market over the past 52 weeks. CPRT has gained 16.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 19.6%. In 2024, shares of CPRT are up 4.1%, compared to the SPX's 12% gains on a YTD basis.
Zooming in further, CPRT has surpassed the S&P 500 Industrial Sector SPDR’s (XLI) 14% returns over the past 52 weeks.
Copart’s underperformance compared to the broader market could be attributed to concerns surrounding its valuation, a decreasing return on equity, and the uncertain effects that emerging technologies, such as autonomous vehicles, could have on its business model.
On May 16, Copart disclosed its Q3 earnings results, which slightly exceeded Wall Street’s expectations. Nonetheless, this positive news wasn’t enough to impress investors, as evidenced by a marginal dip in the company’s share price. Management highlighted concerns about falling used vehicle prices and increased repair costs, which likely contributed to the market’s tepid reaction.
For the fiscal year that ended in July, analysts expect Copart’s EPS to grow by 13.5% annually to $1.43. The company's earnings surprise history is mixed. It beat the consensus forecast in three of the past four quarters while missing on one other occasion.
Among the seven analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on four “Strong Buy” ratings and three “Holds.”
This configuration has been consistent over the past months.
On May 17, Barrington analyst Gary Prestopino maintained a “Neutral” stance on Copart stock. This rating reflects Copart’s stable performance, with revenues and earnings meeting expectations in the third quarter of fiscal year 2024 and industry trends indicating a recovery in total loss frequency.
The mean price target of $55.83 suggests a 9.5% premium to CPRT from current levels. The Street-high target of $63 represents an impressive upside potential of 23.6%.
On the date of publication, Kritika Sarmah 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.
