Why Copart Stock Jumped 23% Last Month

Group 1 - Copart's shares increased by 23.2% in November, indicating strong market performance and shareholder retention [1] - The company reported a record revenue of $1.15 billion for Q1 of fiscal 2025, marking a 12% year-over-year growth, which was ahead of expectations [2][3] - Gross profit and net income grew by 10% and 9% respectively, aligning with analyst expectations [2][3] Group 2 - 81% of vehicles sold by Copart in fiscal 2024 were sourced from insurance companies, highlighting its reliance on the insurance sector [4] - Despite challenges from hurricanes in Florida, Copart managed to efficiently retrieve and sell vehicles [4] - The company primarily generates revenue from high-margin value-added services, which mitigates the impact of slight declines in profit margins [5] Group 3 - Copart's stock is currently trading at a high price-to-sales (P/S) ratio of 14, raising concerns about its valuation [6] - The company is considered a high-quality business, with historical performance suggesting that even at peak valuations, it has outperformed the S&P 500 [7] - Investors who wait for lower valuations may miss out on significant upside potential from a company with a strong track record of compounding returns [8]