Group 1: Earnings Performance - Copart, Inc. reported quarterly earnings of $0.42 per share, matching the Zacks Consensus Estimate, and an increase from $0.39 per share a year ago [1] - The company had a surprise of 5.26% in the previous quarter, posting earnings of $0.40 per share against an expected $0.38 [1] - Over the last four quarters, Copart has surpassed consensus EPS estimates only once [1] Group 2: Revenue Performance - For the quarter ended April 2025, Copart posted revenues of $1.21 billion, missing the Zacks Consensus Estimate by 2.50%, but up from $1.13 billion year-over-year [2] - The company has exceeded consensus revenue estimates three times in the last four quarters [2] Group 3: Stock Performance and Outlook - Copart shares have increased approximately 6.5% since the beginning of the year, contrasting with a -0.6% decline in the S&P 500 [3] - The future performance of Copart's stock will largely depend on management's commentary during the earnings call and the earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $1.2 billion, and for the current fiscal year, it is $1.58 on revenues of $4.74 billion [7] Group 4: Industry Context - The Auction and Valuation Services industry, to which Copart belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than a factor of 2 to 1 [8]

Revenue and Income - For the three months ended April 30, 2025, revenue was $1.2 billion, representing an increase of $84.5 million, or 7.5% year-over-year[4] - Net income attributable to Copart, Inc. for the quarter was $406.6 million, reflecting a year-over-year increase of $24.3 million, or 6.4%[4] - For the nine months ended April 30, 2025, revenue totaled $3.5 billion, up $354.0 million, or 11.2% from the same period last year[5] - Net income for the nine months ended April 30, 2025, was $1,153,055, an increase of 10.9% compared to $1,040,169 in 2024[17] Profitability Metrics - Gross profit for the same period was $552.3 million, an increase of $26.8 million, or 5.1% compared to the previous year[4] - The company reported a fully diluted earnings per share of $0.42 for the quarter, an increase of 7.7% from $0.39 in the prior year[4] - Operating income for the three months ended April 30, 2025, was $451.5 million, a 3.3% increase from the previous year[13] Assets and Cash Flow - Total current assets as of April 30, 2025, were $5.36 billion, compared to $4.42 billion as of July 31, 2024[15] - Total assets increased to $9.67 billion from $8.43 billion over the same period[15] - Cash and cash equivalents increased to $2.37 billion from $1.51 billion year-over-year[15] - Cash, cash equivalents, and restricted cash at the end of the period reached $2,366,499, compared to $1,089,995 at the end of the previous year[17] - Net cash provided by operating activities increased to $1,361,274, up 31.7% from $1,033,343 in the previous year[17] Investment and Expenses - Net cash used in investing activities decreased to $559,049, a reduction of 39.1% from $916,494 in 2024[17] - Purchases of property and equipment totaled $481,349, an increase from $373,104 in the previous year[17] - Income taxes paid, net of refunds, rose to $318,989, compared to $266,400 in 2024, reflecting a 19.7% increase[17] Operational Highlights - The company sold more than 4 million units in the last year, with operations in over 250 locations across 11 countries[7] - The effect of foreign currency translation contributed $5,990 to cash flows, compared to $4,862 in 2024[17] - The company reported a gain on the sale of property and equipment of $4,533, compared to $3,453 in the previous year[17] - The allowance for credit loss was significantly reduced to $153 from $2,513 in the previous year[17] Stock and Equity - Proceeds from the exercise of stock options increased to $40,171, up 97.5% from $20,377 in the previous year[17]

Economic Outlook - Jamie Dimon, CEO of JPMorgan Chase, expressed concerns about U.S. stagflation, highlighting the challenges of high inflation coupled with economic recession, which limits policymakers' options to improve the economy [2] - Dimon indicated that U.S. stocks are overvalued and may face a potential decline of 10%, attributing this to high forward price-to-earnings ratios and overly optimistic earnings estimates amid deteriorating economic conditions [3] Investment Opportunities - Autozone has outperformed the S&P 500 with over 250% return in the last five years, despite only a 2% increase in net sales for the first half of fiscal 2025, due to its strong return on invested capital (ROIC) averaging over 50% [7][9][11] - Casella Waste Systems has seen nearly 2,000% growth in shares over the past decade, benefiting from low competition and the necessity of its services regardless of economic conditions, with a recent acquisition adding approximately $90 million in annualized revenue [12][15][16] - Copart, while generating 18% of its fiscal 2024 revenue internationally, remains primarily U.S.-focused and boasts a remarkable net profit margin of 32% for the first half of fiscal 2025, with revenue growth driven by the adoption of additional services [17][18][19] Valuation Insights - All three highlighted stocks—Autozone, Casella Waste Systems, and Copart—are trading at the higher end of their historical valuations, yet are considered reliable investments in uncertain times [20] - Casella Waste Systems is noted as potentially the best bargain among the three, trading at roughly 4 times sales and only about 10% above its five-year average [21]

Company Overview - Copart (NASDAQ: CPRT) is a global online automobile auction service focused on vehicle salvaging, with a market capitalization of $61 billion [2] - The company is set to release its Q3 FY'25 earnings on May 22, 2025, with expected revenue of approximately $1.23 billion, reflecting a 9% year-over-year increase [1] Financial Performance - For the past twelve months, Copart generated revenue of $4.5 billion, with operating profits of $1.6 billion and net income of $1.5 billion [2] - Earnings per share for the upcoming quarter are projected to be $0.42, which is $0.03 higher than the previous year [1] Market Trends - The growth in Copart's business is primarily driven by an increased supply of vehicles being scrapped due to natural disasters and rising vehicle repair costs [1] - Insurance companies are designating more vehicles as totaled rather than opting for repairs, providing a favorable environment for Copart [1] Earnings Reaction History - Over the past five years, Copart has recorded 19 earnings data points, with 42% resulting in positive one-day returns [5] - The percentage of positive one-day returns increases to 55% when considering the last three years [5] - The median of positive returns is 1.8%, while the median of negative returns is -1.6% [5]

Group 1 - Copart, Inc. (CPRT) stock closed at $62.39, with a daily adjustment of +0.37%, underperforming the S&P 500's gain of 0.73% [1] - Over the past month, Copart's shares appreciated by 3.89%, lagging behind the Business Services sector's gain of 9.41% and the S&P 500's gain of 9.07% [1] Group 2 - The upcoming earnings report for Copart is scheduled for May 22, 2025, with projected earnings per share (EPS) of $0.42, reflecting a 7.69% increase year-over-year [2] - Revenue for the same quarter is estimated at $1.24 billion, indicating a 10.09% rise from the previous year [2] Group 3 - For the entire fiscal year, Zacks Consensus Estimates predict earnings of $1.58 per share and revenue of $4.74 billion, representing increases of +12.86% and +11.86% respectively from the prior year [3] Group 4 - Changes in analyst estimates for Copart are crucial as they reflect the evolving nature of near-term business trends, with upward revisions indicating analysts' positive outlook on the company's operations [4] Group 5 - The Zacks Rank system, which incorporates estimate changes, has a strong track record, with 1 stocks averaging an annual return of +25% since 1988 [5][6] - Currently, Copart holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate remaining steady over the past month [6] Group 6 - Copart has a Forward P/E ratio of 39.34, which aligns with the average Forward P/E of its industry [7] - The Auction and Valuation Services industry, part of the Business Services sector, has a Zacks Industry Rank of 94, placing it in the top 39% of over 250 industries [7][8]

Investment Rating - The report assigns an "Overweight" (OW) rating to General Motors (GM) and Ford, while Tesla and Rivian are rated "Underweight" (UW) [6][7]. Core Insights - The automotive industry is experiencing varied performance metrics across different companies, with GM and Ford showing potential upside in their stock prices, while Tesla and Rivian face significant downside risks [6][7]. - The report highlights the importance of valuation metrics such as EV/EBITDA, P/E ratios, and sales growth projections for assessing investment opportunities within the automotive sector [6][22]. Global Auto OEMs Investment Comparables - General Motors (GM) has a current price of $44.57 with a market cap of $43.067 billion and a target price of $53.00, indicating a 19% upside potential [6]. - Ford (F) is priced at $9.63 with a market cap of $38.294 billion and a target price of $11.00, representing a 14% upside [6]. - Ferrari (RACE) is valued at $439.97 with a target price of $460.00, showing a 5% upside [6]. - Tesla (TSLA) is currently priced at $241.37 with a target price of $120.00, indicating a -50% downside [6]. - Rivian (RIVN) has a price of $11.60 with a target price of $11.00, reflecting a -5% downside [6]. Global Auto Parts Suppliers Valuation Metrics - The average EV/EBITDA for US auto parts suppliers is projected at 1.8x for 2024, with a corresponding EBITDA margin of 12% [22]. - Aptiv (APTV) is rated "Overweight" with a current price of $51.71 and a target price of $102, indicating a 97% upside [22]. - Borg Warner (BWA) is rated "Overweight" with a price of $26.45 and a target price of $46, representing a 74% upside [22]. - Lear Corp (LEA) is rated "Overweight" with a price of $79.42 and a target price of $140, indicating a 76% upside [22]. Performance Metrics - The report indicates that the average revenue CAGR for US auto parts suppliers is projected to be 2% from 2023 to 2025 [74]. - The EBITDA margin for US auto parts suppliers is expected to be around 12% in 2025, with some companies showing higher margins [74][83]. - The report also highlights the financial returns of various suppliers, with some companies achieving significant returns on invested capital (ROIC) [54][56].

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on Copart, Inc. (CPRT), and highlights the potential misalignment of interests between brokerage analysts and retail investors [1][10]. Brokerage Recommendations - Copart has an average brokerage recommendation (ABR) of 2.00, indicating a "Buy" on a scale from 1 (Strong Buy) to 5 (Strong Sell) [2]. - Out of eight brokerage recommendations, four are classified as "Strong Buy," accounting for 50% of the total recommendations [2]. Limitations of Brokerage Recommendations - Studies indicate that brokerage recommendations have limited success in guiding investors towards stocks with the highest price increase potential [5]. - Analysts from brokerage firms tend to exhibit a strong positive bias, often issuing five "Strong Buy" recommendations for every "Strong Sell" [6][10]. Zacks Rank Comparison - Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, showing a strong correlation with near-term stock price movements [8][11]. - The Zacks Rank is distinct from ABR, as it is a quantitative model reflecting timely earnings estimates, while ABR is based solely on brokerage recommendations and may not be up-to-date [9][12]. Current Earnings Estimates for Copart - The Zacks Consensus Estimate for Copart's current year earnings remains unchanged at $1.58, suggesting steady analyst views on the company's earnings prospects [13]. - Due to the unchanged consensus estimate and other factors, Copart holds a Zacks Rank of 3 (Hold), indicating a cautious approach despite the Buy-equivalent ABR [14].

Company Overview - Khaveen Investments is a global investment advisory firm serving high-net-worth individuals, corporations, associations, and institutions [1] - The firm offers a range of services including market and security research, business valuation, and wealth management [1] Investment Strategy - The flagship Macroquantamental Hedge Fund maintains a diversified portfolio with exposure to hundreds of investments across various asset classes, geographies, sectors, and industries [1] - The investment approach integrates top-down and bottom-up analysis, blending three core strategies: global macro, fundamental, and quantitative [1] Core Expertise - The firm specializes in disruptive technologies that are transforming modern industries, including Artificial Intelligence, Cloud Computing, 5G, Autonomous and Electric Vehicles, FinTech, Augmented and Virtual Reality, and the Internet of Things (IoT) [1]

EnglishItalianoEspañolPortuguêsDeutschالعربيةFrançaisImportant DisclaimersThe content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your ...

Core Viewpoint - Copart, Inc. is expected to show positive earnings growth in its upcoming earnings report, with analysts projecting an increase in both EPS and revenue compared to the previous year [2][3]. Group 1: Recent Performance - As of the latest market close, Copart, Inc. shares were priced at $53.63, reflecting a -0.41% change from the previous day, underperforming the S&P 500's 0.08% gain [1]. - Over the past month, Copart's shares have decreased by 7.51%, while the Business Services sector and the S&P 500 have lost 9.22% and 7.33%, respectively [1]. Group 2: Earnings Forecast - The upcoming earnings disclosure is forecasted to report an EPS of $0.42, indicating a 7.69% increase from the same quarter last year [2]. - Revenue is projected to be $1.24 billion, reflecting a 10.09% rise from the equivalent quarter last year [2]. Group 3: Full Year Estimates - For the full year, earnings are estimated at $1.58 per share and revenue at $4.74 billion, showing increases of +12.86% and +11.86% from the previous year [3]. - Recent revisions to analyst forecasts are crucial as they indicate changing business trends, with positive revisions suggesting optimism about the company's profitability [3]. Group 4: Zacks Rank and Valuation - Copart, Inc. currently holds a Zacks Rank of 2 (Buy), with a 0.42% increase in the consensus EPS estimate over the last 30 days [5]. - The company is trading at a Forward P/E ratio of 34.08, which is slightly below the industry average of 34.1 [6]. Group 5: Industry Context - The Auction and Valuation Services industry, part of the Business Services sector, has a Zacks Industry Rank of 3, placing it in the top 2% of over 250 industries [6]. - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7].