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Valued at a market cap of $58.7 billion, Copart, Inc. (CPRT) provides online auctions and vehicle remarketing services. The Dallas, Texas-based company offers a range of services for processing and selling vehicles over the internet through its virtual bidding third-generation internet auction-style sales technology.
Shares of this online vehicle auction services provider have outpaced the broader market over the past 52 weeks. Copart has surged 9.1% over this time frame, while the broader S&P 500 Index ($SPX) has gained 8.2%. Moreover, on a YTD basis, the stock is up 5.9%, compared to SPX’s 4.7% loss.
Zooming in further, Copart has also outperformed the Industrial Select Sector SPDR Fund’s (XLI) 7.6% uptick over the past 52 weeks and 1.3% rise on a YTD basis.
On Feb. 20, Copart released its Q2 earnings results. Due to a robust increase in service revenues and higher vehicle sales, its overall revenue improved 14% year-over-year, reaching $1.2 billion. Moreover, its net income per share of $0.40 advanced 21.2% from the year-ago quarter and topped the consensus estimates by 5.3%. Its operating income came in at $426.2 million, up 12.2% compared to the year-ago quarter.
Despite these positives, its shares plunged 2.8% in the following trading session. A 15.1% increase in its operating expenses, primarily driven by a notable rise in facility-related costs in the U.S and an increase in general and administrative expenses, might have raised investor concerns. Additionally, challenges in the wholesale market and a decrease in international purchased vehicle revenue might have further weighed on investor sentiment.
For the current fiscal year, ending in July, analysts expect Copart’s EPS to grow 12.9% year over year to $1.58. The company’s earnings surprise history is mixed. It exceeded or met the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the eight analysts covering the stock, the consensus rating is a “Moderate Buy” which is based on four “Strong Buy,” and four “Hold” ratings.
This configuration is slightly less bullish than two months ago, with five analysts suggesting a “Strong Buy” rating.
On Feb. 21, Baird analyst Craig Kennison maintained an “Outperform” rating on CPRT and raised its price target to $64, which indicates a 5.3% potential upside from the current levels.
The mean price target of $65 represents a 6.9% premium from CPRT’s current price levels, while the Street-high price target of $69 suggests an upside potential of 13.5%.
