It has been about a month since the last earnings report for Copart (CPRT). Shares have added about 5.7% 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 its most recent earnings report in order to get a better handle on the important drivers.
Copart Q2 Earnings Surpass Estimates, Improve Y/Y
Copart reported adjusted earnings per share of 52 cents in second-quarter fiscal 2019 (ended January 31, 2019), beating the Zacks Consensus Estimate of 51cents. In the year-ago quarter, the bottom line was 47 cents.
Net income was $131.4 million, reflecting an increase of 27.2% or $28.1 million from second-quarter fiscal 2018.
Copart’s revenues rose 5.6% to $484.9 million from the year-ago quarter. However, revenues missed the Zacks Consensus Estimate of $494.3 million. Compared with the prior-year quarter, service revenues increased to $416.8 million from $402 million. Revenues from vehicle sales were $68.1 million in comparison with $57.2 million in second-quarter fiscal 2018.
Gross profit improved to $208.2 million from $191.6 million a year ago. Total operating expenses increased to $320.2 million from $308.2 million recorded in the prior-year period.
Operating income increased to $164.7 million from $150.9 million a year ago.
Copart had cash and cash equivalents of $108.2 million as of Jan 31, 2019, compared with $274.5 million as of Jul 31, 2018. Long-term debt, revolving loan facility and capital lease obligations were $398.7 million as of Jan 31, 2019, similar to the figure recorded on Jul 31, 2018.
At the end of the first six months of fiscal 2019, Copart generated net cash flow of $215.2 million from operations compared with $180.9 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.
Currently, Copart has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been 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.
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Copart, Inc. (CPRT) : Free Stock Analysis Report
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