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Copart, Inc. (CPRT) Up 2.2% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Copart, Inc. (CPRT). Shares have added about 2.2% 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, Inc. 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 Reports Robust Q2 Results

Copart reported reported second-quarter fiscal 2022 (ended Jan 31, 2022) adjusted earnings per share of $1.10, surpassing the Zacks Consensus Estimate of $1.04. The bottom line also surged 37.5% year over year from 80 cents reported in the prior-year quarter.

The online auto auction leader generated revenues of $867.5 million, beating the Zacks Consensus Estimate of $786.9 million. The top line also increased 40.6% from the year-ago reported figure of $786.9 million.

Gross profit was up 31.2% year over year to $403.3 million. Total operating expenses flared up 45% to $520.1 million. General and administrative expenses jumped 18.7% from the prior-year quarter to $42.8 million. Nonetheless, operating income increased to $347.3 million from $258.2 million. Net income came in at $287.4 million compared with the year-ago figure of $193.4 million.

Segmental Performance

Fiscal second-quarter service revenues came in at $711.1 million, up from $532.6 million recorded in the year-earlier period. Service revenues accounted for 82% of the total revenues.

Vehicle sales totaled $156.4 million in the quarter, up from the prior-year level of $84.4 million.

Financial Position

Copart had cash and cash equivalents of $1,346.5 million as of Jan 31, 2022, compared with $1,048.3 million as of Jul 31, 2021. Long-term debt was $403.8 million at the end of second-quarter fiscal 2022.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

Currently, Copart, Inc. has a subpar Growth Score of D, however its Momentum Score 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.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Copart, Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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