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Why Is Copart, Inc. (CPRT) Down 10.3% Since Last Earnings Report?

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A month has gone by since the last earnings report for Copart, Inc. (CPRT - Free Report) . Shares have lost about 10.3% 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’s Q2 Earnings Beat Estimates, Up Y/Y

Copart reported second-quarter fiscal 2021 (ended Jan 31, 2021) adjusted earnings per share of 80 cents, marginally surpassing the Zacks Consensus Estimate of 79 cents. The bottom line also increased 25% year over year from the 64 cents reported in the prior-year quarter.

Total revenues came in at $617 million, missing the Zacks Consensus Estimate of $631 million. Moreover, the top line increased from the year-ago reported figure of $575.1 million.

For the fiscal second quarter, service revenues came in at $532.6 million, up from the $510 million recorded in the year-earlier period. Service revenues accounted for 86.3% of the total revenues. Vehicle sales summed $84.4 million for the quarter, up from the prior-year level of $65.1 million.

Gross profit was up 18.3% year over year to $307.5 million. Total operating expenses edged down 1.8% year on year to $358.8 million. Notably, general and administrative expenses were down 8.2% from the prior-year quarter to $36 million. Resultantly, operating income increased to $258.2 million from the year-earlier period’s $209.9 million. Net income came in at $193.4 million compared with the year-ago figure of $168.7 million.

The online auto auction leader had cash and cash equivalents of $616.4 million as of Jan 31, 2021 compared with $477.7 million as of Jul 31, 2020. Long-term debt and financial lease obligations summed $402.7 million as of Jan 31, 2021, up from $397 million as of Jul 31, 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

VGM Scores

Currently, Copart, Inc. has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. 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 D. 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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