TLDR
- Copart Q2 EPS came in at $0.36, missing the $0.39 estimate by $0.03
- Revenue of $1.12B fell short of the $1.15B forecast and dropped 3.6% year over year
- Insurance-related auction volumes fell roughly 9%, pressuring top-line growth
- CPRT stock hit a new 52-week low of $33.81 on Feb. 20, down around 10% on the day
- Analysts at Baird cut their price target to $48; JPMorgan cut theirs to $45
Copart’s fiscal Q2 results landed with a thud on February 20, sending CPRT to a fresh 52-week low.
The company reported EPS of $0.36, missing the Wall Street consensus of $0.39. Revenue came in at $1.12 billion, also short of the $1.15 billion estimate and down 3.6% from the same period last year.
Profit fell 10% year over year. That’s a tough headline number for any earnings report.
Operating margin slipped to 34.7% from 36.6% a year ago. Free cash flow margin held flat at 5.2%.
One bright spot: Copart ended the quarter with $5.10 billion in cash on hand, keeping its balance sheet in solid shape.
Volume Declines Weigh on Results
A key driver of the weak quarter was a drop in vehicle and insurance-related volumes. Insurance volumes were cited as down roughly 9%, which directly pressures auction throughput and revenue.
That’s the core of Copart’s business, so a decline there flows straight to the top line.
Management, for its part, pushed back on the negativity. On the earnings call, executives reiterated plans to keep investing in land capacity and artificial intelligence to support long-term growth.
Whether that’s enough to satisfy investors right now is another question. The stock told the story — CPRT traded as low as $33.81 on Friday and last traded around $35.96.
That’s a steep drop from its previous close of $37.65.
Analyst Reaction
Baird cut its price target on CPRT from $52 to $48, though analyst Craig Kennison kept his outperform rating, saying the valuation is becoming more attractive at these levels.
JPMorgan had already moved to neutral back in November, cutting its target from $50 to $45.
Barclays has an underweight rating with a $33 target. Barrington initiated a Hold.
The current analyst consensus sits at “Moderate Buy” with an average price target of $46.80, implying meaningful upside from current levels.
Insider activity hasn’t helped sentiment. Director Thomas Tryforos sold 100,000 shares in November at $39.07. CEO Jeffrey Liaw sold 25,137 shares in January at $40.17, a move that cut his position by nearly 31%.
Institutional investors own 85.78% of the float. The stock’s 50-day moving average sits at $39.49 and the 200-day at $42.65 — both well above where the stock is trading now.
CPRT’s market cap stands at $34.88 billion with a P/E ratio of 21.81.
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