Copart (NASDAQ:CPRT) Announces Quarterly Earnings Results, Misses Estimates By $0.03 EPS

Copart (NASDAQ:CPRT) announced its earnings results on Thursday. The business services provider reported $0.35 EPS for the quarter, missing the consensus estimate of $0.38 by ($0.03), Zacks reports. The firm had revenue of $1.15 billion during the quarter, compared to the consensus estimate of $1.14 billion. Copart had a return on equity of 15.81% and a net margin of 31.81%.The business’s revenue was up 2.4% compared to the same quarter last year. During the same quarter last year, the business earned $0.41 EPS.

Here are the key takeaways from Copart’s conference call:

• Copart agreed to acquire ACV Auctions in an all-cash transaction expected to close by year-end. Management expects the deal to be breakeven initially and accretive in the first full year, with synergies from Copart’s locations, logistics network, international buyers, and ACV’s dealer marketplace technology.
• International operations continued to show strong momentum, with fourth-quarter units sold up 10%, insurance units up 11.2%, revenue up 11.7%, and operating income up to $56.8 million. Management plans to expand further in existing markets and enter additional countries.
• Fourth-quarter global units sold declined 2.9%, including a 5.7% decline in the U.S., while U.S. insurance volumes fell 7.5% amid lower collision-claim frequency. Consolidated operating income declined 10.6% and net income fell 17.4% year over year.
• Operating costs increased as Copart invested in long-haul delivery, Title Express, wholesale facilities, and other services; U.S. facility-related costs rose 14.2% per unit in the quarter. Management said it is focused on reducing per-car costs and leveraging additional volume, but offered no earnings or margin guidance.

Copart Stock Performance

Shares of CPRT opened at $29.95 on Friday. The company has a 50-day simple moving average of $30.35 and a 200-day simple moving average of $32.07. Copart has a 52 week low of $26.81 and a 52 week high of $48.96. The firm has a market capitalization of $27.73 billion, a P/E ratio of 19.32, a P/E/G ratio of 1.47 and a beta of 1.03.

Key Copart News

Here are the key news stories impacting Copart this week:

• Positive Sentiment: ACV acquisition expands Copart’s addressable market. Copart agreed to acquire ACV Auctions for $10.50 per share in cash, valuing the transaction at approximately $1.9 billion. The deal adds dealer-to-dealer wholesale auctions, vehicle inspection and valuation tools, and automotive data capabilities to Copart’s salvage-auction platform. Management expects the transaction to be earnings-neutral initially and accretive beginning in fiscal 2028. Copart to Acquire ACV, Expanding Position Across the Vehicle Remarketing Ecosystem
• Positive Sentiment: Analyst support improved. Barrington Research upgraded CPRT to “outperform” with a $40 price target, signaling confidence that the ACV combination and Copart’s long-term growth prospects can outweigh near-term challenges. This Copart Analyst Turns Bullish
• Neutral Sentiment: Revenue exceeded expectations, but growth remained modest. Fiscal fourth-quarter revenue rose 2.4% year over year to $1.15 billion, slightly above the $1.14 billion consensus estimate. Vehicle sales increased 8.3%, partially offsetting only 1.4% growth in service revenue. Copart Q4 Revenue Rises 2.4% to $1.15 Billion
• Negative Sentiment: Profitability missed forecasts and declined year over year. Quarterly EPS was $0.35, below the $0.38–$0.39 analyst consensus and down from $0.41 a year earlier. Net income fell 17.4%, gross profit declined 5.5%, and fiscal-year EPS decreased to $1.55 from $1.59. Copart Inc. Lags Q4 Earnings Estimates
• Negative Sentiment: ACV deal scrutiny introduces execution and closing risk. A law firm announced an investigation into whether ACV’s board obtained fair value and conducted an adequate sale process. Separately, Baird lowered its CPRT price target to $38, although it maintained an “outperform” rating. Shareholder Notice Regarding ACV Auctions

Wall Street Analysts Forecast Growth

A number of research firms have recently commented on CPRT. Deutsche Bank Aktiengesellschaft set a $40.00 price objective on Copart in a research note on Thursday, September 3rd. Barrington Research upgraded Copart from a “market perform” rating to an “outperform” rating and set a $40.00 target price for the company in a research note on Friday. Jefferies Financial Group set a $45.00 target price on Copart in a report on Friday, May 22nd. Stephens reaffirmed an “equal weight” rating and issued a $35.00 price target on shares of Copart in a research report on Thursday, August 20th. Finally, Robert W. Baird dropped their price target on Copart from $42.00 to $38.00 and set an “outperform” rating on the stock in a research report on Friday. Two analysts have rated the stock with a Strong Buy rating, three have issued a Buy rating, two have issued a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $37.57.

Insiders Place Their Bets

In related news, CEO Jeffrey Liaw sold 27,745 shares of Copart stock in a transaction dated Tuesday, July 28th. The stock was sold at an average price of $30.49, for a total transaction of $845,945.05. Following the sale, the chief executive officer directly owned 99,641 shares of the company’s stock, valued at $3,038,054.09. This trade represents a 21.78% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. 9.60% of the stock is currently owned by company insiders.

Institutional Trading of Copart

A number of hedge funds have recently modified their holdings of the company. State Street Corp increased its position in shares of Copart by 1.3% during the fourth quarter. State Street Corp now owns 37,555,437 shares of the business services provider’s stock valued at $1,470,295,000 after purchasing an additional 492,506 shares during the period. Morgan Stanley increased its holdings in Copart by 1.5% in the 4th quarter. Morgan Stanley now owns 12,706,076 shares of the business services provider’s stock valued at $497,443,000 after buying an additional 184,339 shares during the period. Invesco Ltd. increased its holdings in Copart by 6.0% in the 4th quarter. Invesco Ltd. now owns 11,586,115 shares of the business services provider’s stock valued at $453,596,000 after buying an additional 654,244 shares during the period. Northern Trust Corp increased its holdings in Copart by 1.1% in the 3rd quarter. Northern Trust Corp now owns 8,931,216 shares of the business services provider’s stock valued at $401,637,000 after buying an additional 97,411 shares during the period. Finally, Bank of America Corp DE raised its stake in shares of Copart by 3.6% in the 3rd quarter. Bank of America Corp DE now owns 7,586,427 shares of the business services provider’s stock valued at $341,162,000 after buying an additional 266,321 shares in the last quarter. Institutional investors own 85.78% of the company’s stock.

About Copart

Copart, Inc (NASDAQ: CPRT) provides online vehicle auction and remarketing services. The company operates a global marketplace where damaged, recovered, used and other vehicles are sold primarily through online auctions. Its offerings include salvage and clean-title vehicles, with inventory sourced from insurance companies, banks, dealerships, fleet operators, rental companies, government agencies and other organizations.

Copart supports the vehicle remarketing process through inspection, storage, transportation, title processing and auction services.