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Copart (CPRT) Gears Up to Post Q4 Earnings: What to Expect

Copart, Inc. CPRT is scheduled to release fourth-quarter fiscal 2021 results tomorrow after the closing bell. The Zacks Consensus Estimate for the quarter’s earnings per share and revenues is pinned at 89 cents and $685.8 million, respectively.

In the last reported quarter, the Texas-based online vehicle auctioning company posted an earnings beat on higher-than-expected vehicle sales and service revenues. The bottom line also surged 87.9% year over year. Copart — which is considered as the eBay EBAY of salvage vehicles — surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average being 32.2%.

Copart, Inc. Price and EPS Surprise

Copart, Inc. price-eps-surprise | Copart, Inc. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for quarterly revenues indicates a 30% rise from $526 million recorded in the prior-year quarter. The Zacks Consensus Estimate for fiscal fourth-quarter earnings has been unchanged over the past 60 days. The bottom-line forecast calls for an increase of 30% year over year.

Let's delve into the factors that are likely to have influenced its fiscal fourth-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. For the July-end quarter, the Zacks Consensus Estimate for service revenues is pegged at $586 million, indicating an uptick of 28% year over year. Also, the consensus mark for vehicle sales is pinned at $96 million, calling for a rise from $68 million reported in the prior-year quarter.

The company’s strategic acquisitions are likely to have fueled revenues. Copart’s buyout of Kentucky-based online auctioning platform, Vincent Auto Solutions, strengthened its footprint in Western Kentucky and is likely to have contributed to sales during the quarter to be reported. Strategic partnership with CHAMPtitles to introduce an automated digital platform for car sellers is also likely to have buoyed the company’s top line during the to-be-reported quarter. During the fiscal fourth quarter, it opened a new location in Bismarck to serve customers in North Dakota.

Yet, rising operating expenses, and high storage and labor costs are expected to have dented margins. The consensus mark for cost of vehicle sales is pegged at $86 million, implying a year-over-year rise of 56.3%. Also, increased investments due to business expansion should have clipped Copart’s bottom line to some extent.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for the company 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: It has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Copart — whose peers 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.

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eBay Inc. (EBAY): Free Stock Analysis Report
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