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Why Is Copart (CPRT) Up 4.7% Since the 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 added about 4.7% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? 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 Q2 Earnings Meet Estimates, Increase Y/Y

Copart posted adjusted earnings per share (“EPS”) of $0.58 for second-quarter fiscal 2017 (ended Jan 31, 2016), up from $0.45 a year ago. Moreover, the EPS figure was in line with the Zacks Consensus Estimate.

Reported earnings per share increased 19.1% to $0.56 from $0.47 recorded in the year-ago quarter. Net income (on a reported basis) was $66.1 million, up 12% year over year.

Copart’s revenues increased 16.6% to $349.5 million in the reported quarter. Further, the figure outpaced the Zacks Consensus Estimate of $339 million. Service revenues went up 19.1% to $310.03 million, while revenues from vehicle sales grew 0.5% to $39.5 million.

Gross margin improved 17.8% to $146.8 million (42% of sales) in the reported quarter from $124.6 million (41.6% of sales) a year ago. Operating expenses increased to $240.7 million from $207.6 million in the year-ago quarter.

Operating income rose to $108.9 million from $92.1 million in second-quarter fiscal 2016.

Financial Details

Copart had cash and cash equivalents of $174.9 million as of Jan 31, 2017, compared with $155.8 million as of Jul 31, 2016. Total debt and capital lease obligations amounted to $712.1 million as of Jan 31, 2017, compared with $640.5 million as of Jul 31, 2016.

During the first half of fiscal 2017, Copart generated net cash flow of $155.5 million from operations, compared with $83.3 million a year ago. Capital spending was $92 million, compared with $77.4 million in the first half of fiscal 2016.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There have been four revisions higher for the current quarter compared to one lower.

Copart, Inc. Price and Consensus

 

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

VGM Scores

At this time, Copart' stock has a subpar Growth Score of 'D', however its Momentum is doing a bit better with a 'C'. Charting a somewhat similar path, 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.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


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