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Valued at a market cap of $47.6 billion, Copart, Inc. (CPRT) operates in the online auctions and vehicle remarketing industry. The Dallas, Texas-based company provides services to process and sell salvage and clean title vehicles primarily over the Internet.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Copart fits this criterion perfectly. Copart is renowned for its patented virtual auction technology (VB3), global presence in 11 countries, over 200 locations, and a vast inventory providing seamless online vehicle auctions to a wide range of buyers, from automotive businesses to consumers.
However, the online vehicle auctioneer has slipped 15.6% from its 52-week high of $58.58, achieved in April. Despite this recent pullback, shares of Copart are down 7.5% over the past three months, underperforming the broader Dow Jones Industrials Average's ($DOWI) 3.8% gains over the same time frame.
Longer term, CPRT has risen marginally on a YTD basis, lagging behind DOWI's 7.1% gains. Moreover, shares of Copart have gained 8.8% over the past 52 weeks, compared to Dow Jones' 17.1% returns over the same time frame.
Despite this, CPRT has demonstrated strength by trading above its 50-day and 200-day moving averages since late August, signaling a potential bullish trend.
Copart has underperformed primarily due to rising costs and margin pressure, including increased expenses for growth investments and higher salaries. Moreover, the stock tumbled 6.7% following its Q4 earnings release on Sep. 4 due to a lower-than-expected net income of $0.33 per share, driven by increased operating expenses related to infrastructure expansion. Additionally, the company faced pressure from declining used-car values, which squeezed auction selling prices and negatively impacted profit margins.
To emphasize the stock’s underperformance, its rival RB Global, Inc. (RBA) is outperforming CPRT. Shares of RB Global have gained 27.2% over the past 52 weeks and are up 23.6% on a YTD basis.
However, analysts are moderately optimistic about CPRT stock's prospects. The stock has a consensus rating of "Moderate Buy" from the seven analysts covering the stock, and the mean price target of $56.28 is a premium of 13.8% to current levels.
On the date of publication, Sohini Mondal 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.
