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Copart (CPRT) to Report Q4 Earnings: What's in the Cards?

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Copart, Inc. (CPRT - Free Report) is scheduled to release fourth-quarter fiscal 2020 results after the closing bell on Sep 2. The Zacks Consensus Estimate for the quarter’s earnings per share and revenues is 39 cents and $415.4 million, respectively.

In the last reported quarter, the Texas-based online vehicle auctioning company reported weaker-than-expected returns amid coronavirus woes. The top and bottom lines also deteriorated from the year-ago levels.

The company — which is the eBay (EBAY - Free Report) of auto auctions — outpaced the Zacks Consensus Estimate in three of the last four quarters and missed once, with the average surprise being 1.5%. This is depicted in the graph below:

Copart, Inc. Price and EPS Surprise

Copart, Inc. Price and EPS Surprise

Copart, Inc. price-eps-surprise | Copart, Inc. Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for revenues indicates a fall from $543 million recorded in the prior-year quarter. The Zacks Consensus Estimate for fiscal fourth-quarter earnings has decreased by a penny in the past 30 days. The current forecast calls for a decline from 60 cents a share recorded in the prior-year quarter.

Let's delve deeper into the factors that are likely to have influenced Copart’s fiscal fourth-quarter earnings.

Key Factors to Consider

Copart’s active presence across the United States and international markets is likely to have boosted global sales volumes. High activity levels in the United States and expansion efforts in Canada as well as Europe markets are expected to have bolstered its quarterly revenues.

In addition to opening hubs and expanding the network of facilities, the company’s strategic acquisitions are also likely to have driven revenues. Copart’s buyout of Kentucky-based online auctioning platform, Vincent Auto Solutions, strengthened its footprint in Western Kentucky and is also likely to have contributed to sales in the quarter to be reported.

Nonetheless, overall vehicle sales volumes and revenues are likely to have been under pressure in the fiscal fourth quarter amid sluggish demand for vehicles due to the coronavirus outbreak. Notably, the Zacks Consensus Estimate for service revenues is pegged at $353 million, pointing to a decline of 26% year over year. The consensus mark for revenues from vehicle sales stands at $46.2 million, indicating a decline from $72 million in the year-ago period. 

What the Zacks Model Says

Our proven model predicts an earnings beat for Copart this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Copart has an Earnings ESP of +8.62%. This is because the Most Accurate Estimate is pegged 3 cents higher than the Zacks Consensus Estimate.

Zacks Rank: Copart — whose peers include KAR Auctions Services Inc. (KAR - Free Report) and Insurance Auto Auctions aka IAA, Inc. (IAA - Free Report) — currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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