A month has gone by since the last earnings report for Copart, Inc. (CPRT - Free Report) . Shares have added about 13.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is CPRT due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Copart’s Q3 Earnings & Revenues Surpass Estimates
Copart reported adjusted earnings per share of 52 cents in third-quarter fiscal 2018 (ended Apr 30, 2018), beating the Zacks Consensus Estimate of 48 cents. The bottom line improved 36.8% from 38 cents recorded in the year-ago quarter.
Net income was $127.3 million, reflecting a surge of 40.6% or $36.8 million from third-quarter fiscal 2017.
Copart’s revenues rose 27.9% to $478.2 million from the year-ago quarter and surpassed the Zacks Consensus Estimate of $435 million. Service revenues went up 24% year over year to $410.8 million while revenues from vehicle sales gained 62% to $67.4 million in comparison with the prior-year quarter.
Gross profit improved 27% to $219.1 million from $173 million a year ago. Total operating expenses increased to $303.6 million from $237 million recorded in the prior-year period.
Operating income increased to $174.6 million from $136.8 million a year ago.
Copart had cash and cash equivalents of $204.3 million as of Apr 30, 2018, compared with $210 million as of Jul 31, 2017. Long-term debt, revolving loan facility and capital lease obligations were $399 million as of Apr 30, 2018, which recorded a decline from $550.8 million as of Jul 31, 2017.
In third-quarter fiscal 2018, Copart generated net cash flow of $377.2 million from operations compared with $ 347.8 million a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been five revisions higher for the current quarter compared with one lower.
At this time, CPRT has a great Growth Score of A, though it is lagging a lot on the momentum front with a C. 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.
Our style scores indicate that the stock is more suitable for growth investors than momentum investors.
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Interestingly, CPRT has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.