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After looking at Copart, Inc.'s (NASDAQ:CPRT) latest earnings announcement (31 January 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Copart's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
How Well Did CPRT Perform?
CPRT's trailing twelve-month earnings (from 31 January 2019) of US$483m has jumped 41% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 21%, indicating the rate at which CPRT is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is solely owing to an industry uplift, or if Copart has seen some company-specific growth.
In terms of returns from investment, Copart has invested its equity funds well leading to a 33% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 22% exceeds the US Commercial Services industry of 6.6%, indicating Copart has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Copart’s debt level, has increased over the past 3 years from 27% to 33%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 41% to 34% over the past 5 years.
What does this mean?
Copart's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Copart gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Copart to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CPRT’s future growth? Take a look at our free research report of analyst consensus for CPRT’s outlook.
- Financial Health: Are CPRT’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 January 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.