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Reading Copart’s Fiscal 1Q16 Results: Falls in Revenue and Income

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Copart’s price movement as of November 23

Copart (CPRT), the Texas-based provider of online auction and remarketing services, has a market cap of $4.5 billion. Copart’s YTD (year-to-date) price movement has so far been a mix of ups and downs in 2015. But after the company’s 1Q16 earnings report, Copart’s stock rose by 1.36% to close at $37.20 per share as of November 23, 2015. The company’s price movements on weekly, monthly, and YTD bases were 3.9%, 4.2%, and 2.0%, respectively.

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Technically, this data means that Copart’s stock has broken the support of its 20-day, 50-day, and 200-day moving averages throughout 2015. As of November 23, Copart was trading at 2.3% above its 20-day moving average, at 5.3% above its 50-day moving average, and at 3.3% above its 200-day moving average.

ETFs that invest in Copart and industry peers

The PowerShares S&P Mid-Cap Low Volatility Portfolio (XMLV) invests 1.3% of its holdings in Copart. The ETF tracks a volatility-weighted index of the 80 least volatile S&P MidCap 400 companies. The YTD price movement of XMLV was 7.1% as of November 20, 2015.

Below is a rundown of Copart’s competitors in the industry and their respective market caps:

  • CarMax (KMX)—$11.5 billion
  • KAR Auction Services (KAR)—$5.1 billion
  • Penske Automotive Group (PAG)—$4.1 billion
  • Lithia Motors Inc. (LAD)—$3.2 billion
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Copart’s performance in 1Q16

Copart reported 1Q16 total revenues of $288.8 million, which represents a fall of 0.55% when compared to the total revenues of $290.4 million the company saw in 1Q15. Revenues from service rose by 1.8% while revenues from vehicle sales fell by 13.5% in 1Q16 compared to the same period one year previously.

The company’s operating income rose to $86.2 million in 1Q16, which represents a rise of 4.6% compared to 1Q15. Its net income and EPS (earnings per share) fell to $52.4 million and $0.42, respectively, in 1Q16, compared to the net income and EPS of $52.6 million and $0.40, respectively, that it saw in 1Q15.

Meanwhile, Copart’s cash and cash equivalents, accounts receivables, and vehicle pooling costs and inventories rose by 3.7%, 7.3%, and 6.2%, respectively, in 1Q16 on a quarterly basis. The company’s ratio rose to 3.50 as of November 23, and its debt-to-equity ratio fell to 0.82 in 1Q16, compared to its debt-to-equity ratio of 3.44 and 0.86, respectively, in 4Q15.

More about Copart

Copart provides remarketing services that include the following:

  • processing vehicles
  • selling and salvaging vehicles
  • cleaning titles

Copart extends these services not only to dealers, dismantlers, rebuilders, and exporters but also, in some locations, to end users.

Continue to the corresponding part of this series for an instructive comparison of Copart’s 1Q16 performance with that of its industry peers.

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