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Copart (CPRT) to Report Q3 Earnings: What's in the Offing?

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Copart, Inc. CPRT is scheduled to release third-quarter fiscal 2021 results on May 19 after the closing bell. The Zacks Consensus Estimate for the quarter’s earnings per share and revenues is pinned at 80 cents and $636.62 million, respectively.

In the last reported quarter, the Texas-based online vehicle auctioning company posted an earnings beat on higher-than-expected revenues from vehicle sales. The bottom line also improved year over year on higher revenues and lower operating costs.

Copart — which is considered the eBay EBAY of salvage vehicles — surpassed the Zacks Consensus Estimate in three of the last four quarters and missed in the other, the average surprise being 20.83%.

Trend in Estimate Revisions

The Zacks Consensus Estimate for quarterly revenues indicates a 15.67% rise from the $550.36 million recorded in the prior-year quarter. The Zacks Consensus Estimate for fiscal third-quarter earnings has moved a cent north in the past seven days. The bottom-line forecast calls for an increase of 37.93% year over year.

What the Zacks Model Says

Our proven model predicts an earnings beat for Copart this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Copart has an Earnings ESP of +2.5%. This is because the Most Accurate Estimate is pegged two cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Copart — peers of which include KAR Auctions Services Inc. KAR and Insurance Auto Auctions aka IAA, Inc. IAA — currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Let's delve deeper into the factors that are likely to have influenced Copart’s fiscal third-quarter performance.

Key Factors

Copart’s active presence in the United States and international markets is likely to have bolstered the firm’s performance during the to-be-reported quarter.

Notably, for the April-end quarter, the Zacks Consensus Estimate for service revenues is pegged at $544 million, indicating an uptick of 10.6% year over year. Also, the consensus mark for the vehicle sales is pinned at $76 million, calling for a rise from the $59 million reported in the prior-year quarter.

The company’s strategic acquisitions are also likely to have fueled revenues. Copart’s buyout of Kentucky-based online auctioning platform, Vincent Auto Solutions, has strengthened its footprint in Western Kentucky and is likely to have contributed to sales during the quarter to be reported. Moreover, in April, Copart entered into a strategic partnership with CHAMPtitles, to introduce an automated digital platform for car sellers, including insurance companies, which reduces the need for manual paper and mail-oriented vehicle title processing. This is likely to have buoyed the company’s top line during the to-be-reported quarter.

Moreover, during the fiscal third quarter, the company opened the seventh facility in Spain to serve its customers. While such expansion efforts are likely to have aided the company’s revenues during the to-be-reported quarter, these also require heavy investments which might have clipped the firm’s margins to some extent.

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