Copart Inc (CPRT, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $48.45, Copart Inc has witnessed a daily loss of 0.58%, marked against a three-month change of 12.01%. A thorough analysis, underlined by the GF Score, suggests that Copart Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 6/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, but a lower GF Value rank, GuruFocus assigned Copart Inc the GF Score of 93 out of 100, which signals the highest outperformance potential.
Understanding Copart Inc's Business
With a market cap of $46.52 billion and sales of $3.87 billion, Copart Inc operates an online salvage vehicle auction with a presence in 11 countries. The company's operating margin stands at a healthy 38.42%. Copart's virtual bidding platform, VB3, connects vehicle sellers with over 750,000 registered buyers globally, including vehicle dismantlers, rebuilders, and used vehicle retailers. Approximately 80% of Copart's vehicle volume comes from auto insurance companies with total loss vehicles. Copart also provides services such as vehicle transportation, storage, title transfer, and salvage value estimation, primarily operating on a consignment basis and collecting fees based on the vehicle's final selling price.
Financial Strength Breakdown
According to the Financial Strength rating, Copart Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. With an Altman Z-Score of 40.32, Copart Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.03, Copart Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Copart Inc's impressive standing among its peers in generating profit. The company's Operating Margin has increased over the past five years, with the latest figure at 38.42%. Furthermore, Copart's Gross Margin has also seen a consistent rise, indicating growing efficiency in revenue conversion into profit. Copart Inc's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Copart Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 20.1%, which outperforms 84.57% of companies in the Business Services industry. Moreover, Copart Inc has seen a robust increase in its EBITDA over the past few years, with a three-year growth rate of 20.7 and a five-year rate of 21.2, highlighting the company's capability to drive growth.
Conclusion: Copart Inc's Position for Outperformance
Considering Copart Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking companies with similar characteristics can explore more options using the GF Score Screen. With its strong market position and consistent performance, Copart Inc stands as a compelling investment case for those looking to capitalize on the company's growth trajectory and financial resilience.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
