Why Is Copart (CPRT) Up 4.9% Since Its Last Earnings Report?

A month has gone by since the last earnings report for Copart, Inc. CPRT. Shares have added about 4.9% in that time frame.

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

Copart Tops on Q2 Earnings & Revenues, Improves Y/Y

Copart reported adjusted earnings per share of 47 cents in second-quarter fiscal 2018 (ended Jan 31, 2018), beating the Zacks Consensus Estimate of 38 cents. The bottom line improved 62% from 29 cents recorded in the year-ago quarter.

Net income was $103.3 million, reflecting a surge of 56.3% or $37.2 million from second-quarter fiscal 2017.

Copart’s revenues rose 31.3% to $459.1 million from the year-ago quarter and surpassed the Zacks Consensus Estimate of $434.6 million. Service revenues went up 30% year over year to $402 million, while revenues from vehicle sales gained 45% to $57.2 million in comparison with the prior-year quarter.

Gross margin improved 30.6% to $191.6 million in the reported quarter from $147 million a year ago. Total operating expenses also increased to $308.2 million from $240.7 million recorded in the prior-year period. This rise in expense is primarily due to increased equipment-lease expenses and labor costs as a result of Hurricane Harvey.

Operating income increased to $151 million from $109 million a year ago.

Financial Details

Copart had cash and cash equivalents of $195.3 million as of Jan 31, 2018, compared with $210 million as of Jul 31, 2017. Long-term debt, revolving loan facility and capital lease obligations were $400.6 million as of Jan 31, 2017, which recorded a decline from $550.8 million as of Jul 31, 2017.

In second-quarter fiscal 2018, Copart generated net cash flow of $186 million from operations compared with $156 million a year ago.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.

Copart, Inc. Price and Consensus

 

Copart, Inc. Price and Consensus | Copart, Inc. Quote

VGM Scores

Currently, CPRT has an average Growth Score of C, however its Momentum is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% for this investment strategy.

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

Our style scores indicate that the stock is more suitable for momentum investors than growth investors.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise CPRT has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

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