Copart Hits Fresh 52-Week High: What's Behind the Rally?

Shares of Copart, Inc. CPRT scaled a fresh 52-week high of $72.51 on May 24, before closing the day at $70.99.

The online vehicle auctioning company has a market cap of roughly $16.2 billion. For the current fiscal year, its expected earnings per share growth rate is pegged at 26.01%, higher than the S&P’s average of 10.16%.

Copart’s shares gained 21.6% in the last three months, outperforming the industry’s growth of 11.7%.

 

Driving Factors

The Dallas, TX-based company is witnessing surge in worldwide sales volume on active presence across markets of all sizes. In the recently-reported third-quarter fiscal 2019, Copart’s purchased vehicles increased 17.8% year over year, majorly driven by high activity levels in Germany, supported by key markets — consisting of the United States and the U.K.

Despite foreign currency volatility, the company managed to improve top and bottom lines on a year-over-year basis in its recently-reported quarterly results on May 22. The figures beat the respective Zacks Consensus Estimate, primarily driven by unit volumes.

Apart from its native country, the company is expanding its network of facilities in Europe markets, majorly across Germany and the U.K. Beginning from fiscal 2019, Copart opened 22 facilities across its regions. Out of the total, 12 are in the United States, one each in Brazil and Canada, and eight in Germany. Expanding footprint will support the company’s fast pickup of vehicles, leading to growth in a competitive market.

Apart from opening hubs, the company acquires businesses to support its growth strategy. It acquires businesses that have decent presence in existing as well as new markets. In March 2019, Copart acquired Kentucky-based online auctioning platform, Vincent Auto Solutions, to strengthen footprint in western Kentucky.

Copart, Inc. Price and Consensus

 

Copart, Inc. Price and Consensus

Copart, Inc. price-consensus-chart | Copart, Inc. Quote

Over the last seven days, the Zacks Consensus Estimate for Copart’s fiscal 2019 earnings moved upward by 1.4%.

Zacks Rank & Other Key Picks

Copart currently carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the broader auto sector are Cummins Inc. CMI, Ford Motor Company F and AB Volvo VLVLY). Cummins and Ford currently carry a Zacks Rank #2 while Volvo sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cummins has an expected long-term growth rate of 8.4%. The stock has gained 3.5% in the past three months.

Ford has an expected long-term growth rate of 7.3%. The stock has gained 11.9% in the past three months.

Volvo has an expected long-term growth rate of 5%. Over the past six months, shares of the company have gained 2.9%.

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