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Copart (CPRT) to Report Q1 Earnings: What's in the Offing?

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Copart, Inc. (CPRT - Free Report) is set to report first-quarter fiscal 2019 results, after the market closes on Nov 20.

In the last reported quarter, the company missed estimates by 10.6%. Per the earnings record, it beat estimates in three of the trailing four quarters, the average beat being 12.1%.

In the past three months, shares of Copart have underperformed the industry it belongs to. The stock has moved down 17.3% compared with 15.5% decline recorded by the industry during the period.

Copart, Inc. Price and EPS Surprise

 

Let’s see, how things have shaped up for the upcoming announcement.

Factors Influencing This Quarter

Copart has been growing its network of facilities to manage increasing volume. Apart from North America, the company has been expanding its footprint in Germany and western Europe. During the to-be-reported quarter, it planned to open numerous locations, both in the domestic and international markets. Further, strong used-car price environment will help Copart drive its revenues.

However, continuous rise in general and administrative (G&A) expenses is hampering the company’s margin. This rise is primarily due to the acquisition of National Powersport Auctions and the buyout of AVK — a Finland-based salvage auto auction company — in March 2018. A similar trend is expected to continue in the coming quarters, owing to inflation and increase in Copart’s business complexity.

Additionally, the company’s exposure to international markets makes it vulnerable to currency fluctuations and country-specific policy threats.

Earnings Whispers

Our proven model does not conclusively predict earnings beat for Copart this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.

Earnings ESP: Copart’s Earnings ESP is -11.51% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 41 cents and 46 cents, respectively.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Copart currently carries a Zacks Rank of 3.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are a few stocks worth considering from the same space, with the right combination of elements:

Navistar, Inc. has an Earnings ESP of +13.91% and a Zacks Rank of 3. The company is expected to release its fourth-quarter fiscal 2018 earnings on Dec 18.

You can see the complete list of today’s Zacks #1 Rank stocks here.

PACCAR Inc. (PCAR - Free Report) has an Earnings ESP of +1.35% and a Zacks Rank #2. In the third-quarter 2018, the company’s consolidated net sales and revenues were $5.76 billion, while earnings were $1.55 per share.

Tesla, Inc. (TSLA - Free Report) has an Earnings ESP of +18.42% and a Zacks Rank of 1. In the third-quarter 2018, the company’s revenues and earnings per share were $6.8 billion and $2.90 per share, respectively.

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