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Why Is Copart (CPRT) Up 18.3% Since the Last Earnings Report?

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It has been about a month since the last earnings report for Copart, Inc. (CPRT - Free Report) . Shares have added about 18.3% 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 catalysts.

Copart Q1 Earnings & Revenues Beat Estimates, Up Y/Y

Copart reported adjusted earnings per share of 33 cents in first-quarter fiscal 2018 (ended Oct 31, 2017), beating the Zacks Consensus Estimate of 26 cents. The bottom line showed a steep rise of 17.9% from 28 cents recorded in the year-ago quarter.

Net income was $77.5 million, reflecting a plunge of 53.7% or $89.8 million from the first quarter of fiscal 2017.

Copart’s revenues rose 21.1% to $419.2 million from the year-ago quarter and surpassed the Zacks Consensus Estimate of $377.4 million. Service revenues went up 21.8% to $374.1 million, while revenues from vehicle sales gained 15.8% to $45.1 million.

Gross margin improved 12.4% to $163.3 million in the reported quarter from $145.3 million a year ago. Operating expenses also increased to $295.2 million from $241.2 million, recorded in the prior-year period.

Operating income increased to $124 million from $104.8 million a year ago.

Financial Details

Copart had cash and cash equivalents of $224.2 million as of Oct 31, 2017 compared with $210 million as of Jul 31, 2017. Total debt, revolving loan facility and capital lease obligations were $550.7 million as of Oct 31, 2017, almost same in comparison to $550.8 million as of Jul 31, 2017.

In first-quarter fiscal 2018, Copart generated net cash flow of $93.4 million from operations compared with $74.3 million a year ago.

How Have Estimates Been Moving Since Then?

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

Copart, Inc. Price and Consensus

 

VGM Scores

At this time, the stock has a nice Growth Score of B, a grade with the same score on the momentum front. 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.

Outlook

Estimates have been trending upward for the stock and the magnitude of these revisions also looks promising. The stock has a Zacks Rank #1 (Strong Buy). We are expecting an above average return from the stock in the next few months.


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