Copart, Inc. (CPRT) Down 7.3% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Copart, Inc. (CPRT). Shares have lost about 7.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Copart, Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Copart Q3 Earnings Beat Estimates, Revenues Up Y/Y

Copart reported third-quarter fiscal 2022 (ended Apr 30, 2022) adjusted earnings per share of $1.17, topping the Zacks Consensus Estimate of $1.15. The outperformance was due to higher-than-anticipated revenues from the service and vehicle segments. The bottom line also rose 7.3% year over year from $1.09 reported in the prior-year quarter.

The online auto auction leader generated revenues of $939.9 million, beating the Zacks Consensus Estimate of $860.4 million. The top line also increased 28.1% from the year-ago reported figure of $786.9 million.

Segmental Performance

Fiscal third-quarter service revenues came in at $766.3 million, up from $623.8 million recorded in the year-earlier period. Service revenues accounted for 81.5% of the total revenues. The figure crossed the consensus mark of $724 million.

Vehicle sales totaled $173.6 million in the quarter, up from the prior-year level of $110.1 million. The figure exceeded the consensus mark of $157 million.

Financial Position

Gross profit was up 14.4% year over year to $436.3 million. Total operating expenses flared up 39.8% to $567.2 million. General and administrative expenses jumped 28.1% from the prior-year quarter to $50.2 million. Nonetheless, operating income increased to $372.7 million from $328.1 million. However, net income fell to $278.6 million from $286.8 million.

Copart had cash and cash equivalents of $1,454.8 million as of Apr 30, 2022, compared with $1,048.3 million as of Jul 31, 2021. Long-term debt was $402.7 million at the end of the reported quarter, increasing from $397.6 million as of Jul 31, 2022.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

Currently, Copart, Inc. has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Copart, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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