Why Is Copart (CPRT) Up 6.9% Since Last Earnings Report?

It has been about a month since the last earnings report for Copart (CPRT). Shares have added about 6.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Copart 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 Q3 Earnings & Revenues Drive Past Estimates

Copart reported earnings per share of 66 cents in third-quarter fiscal 2019 (ended Apr 30, 2019), beating the Zacks Consensus Estimate of 61 cents. In the year-ago quarter, the bottom line was 52 cents.

Net income was $192.7 million, reflecting an increase of 51.3% or $65.4 million from third-quarter fiscal 2018.

Copart’s revenues rose 15.7% to $553.1 million from the year-ago quarter. Further, revenues surpassed the Zacks Consensus Estimate of $528.2 million. Compared with the prior-year quarter, service revenues increased to $473.7 million from $410.8 million. Revenues from the sale of vehicles were $79 million in comparison with $67 million in third-quarter fiscal 2018.

Gross profit improved 14.8% year over year to $192.7 million. Total operating expenses increased to $345.6 million from $303.6 million recorded in the prior-year period. Operating income increased to $207 million from $174.6 million a year ago.

Financial Details

Copart had cash and cash equivalents of $102.8 million as of Apr 30, 2019, compared with $274.5 million as of Jul 31, 2018. Long-term debt, revolving loan facility and capital lease obligations were $398.8 million as of Apr 30, 2019, similar to the figure recorded as of Jul 31, 2018.

At the end of the first nine months of fiscal 2019, Copart generated net cash flow of $453.5 million from operations compared with $377.2 million in the year-ago period.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

At this time, Copart has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Copart has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.