Breaking Down Copart, Inc. (CPRT) Financial Health: Key Insights for Investors

Are you keeping a close watch on Copart, Inc. (CPRT) and trying to gauge its financial strength? For the year ended July 31, 2024, the company reported a revenue of $4.2 billion, a gross profit of $1.9 billion, and a net income of $1.4 billion. But how do these figures stack up against previous periods, and what do they suggest about the company's future? Fully diluted earnings per share for the year ended July 31, 2024, was $1.40 compared to $1.28 last year, an increase of 9.4%. Let's delve into a detailed breakdown of Copart's financial performance to equip you with key insights for making informed investment decisions.

Copart, Inc. (CPRT) Revenue Analysis

Understanding Copart's revenue streams involves looking at the different ways the company generates income. Copart is primarily engaged in providing online vehicle auction and remarketing services. The company connects vehicle sellers (consignors) with buyers through its online auction platform.

Here's a breakdown of Copart, Inc.'s revenue streams:

• Service Revenues: The company's service revenues consist of auction and auction-related sales transaction. For the Q2 2025, service revenue increased 15%, totaling $991 million.
• Vehicle Sales: Copart also generates revenue from direct vehicle sales. Vehicle sales showed steady growth at $172 million, an 8.6% rise from 2024.

For the fiscal year ended July 31, 2024, Copart reported a 9.5% increase in revenue to $4.2 billion. In the Q4 2024, Copart's revenue reached $1.07 billion, up 7.2% year over year.

Year-over-year revenue growth rate (historical trends):

• For the three months ended October 31, 2024, revenue increased $126.4 million, or 12.4% from the same period last year.
• Copart revenue for the twelve months ending January 31, 2025 was $4.506B, a 11% increase year-over-year.
• Copart annual revenue for 2024 was $4.237B, a 9.49% increase from 2023.
• Copart annual revenue for 2023 was $3.87B, a 10.53% increase from 2022.

Contribution of different business segments to overall revenue:

For more insights into Copart, Inc., check out: Exploring Copart, Inc. (CPRT) Investor Profile: Who’s Buying and Why?

Copart, Inc. (CPRT) Profitability Metrics

Analyzing Copart, Inc.'s financial health involves a close examination of its profitability metrics. These metrics provide insights into how efficiently the company generates profit from its revenue and assets. A comparison against industry averages and historical trends further refines this analysis.

Here's a breakdown of Copart's profitability, incorporating available data:

• Gross Profit: Gross profit is the revenue left after deducting the cost of goods sold (COGS). It indicates how efficiently a company manages its production costs.
• Operating Profit: This is calculated by deducting operating expenses from gross profit. It reflects the profit earned from the company's core business operations, before accounting for interest and taxes.
• Net Profit: Net profit is what remains after all expenses, including interest, taxes, and other deductions, are subtracted from total revenue. It represents the actual profit available to the company's owners.

Copart's financial performance can be further understood by examining specific margins:

• Gross Profit Margin: This ratio shows the percentage of revenue remaining after subtracting the cost of goods sold. A higher gross profit margin indicates greater efficiency in managing production costs.
• Operating Profit Margin: This ratio measures the percentage of revenue that remains after deducting both the cost of goods sold and operating expenses. It reflects the profitability of the company's core operations.
• Net Profit Margin: This ratio indicates the percentage of revenue that translates into net profit. It represents the overall profitability of the company after all expenses have been considered.

Here's a look at Copart's profitability ratios, based on the 2024 fiscal year data:

Copart Inc.'s gross profit margin for the quarter that ended on January 31, 2025 was 48.78%. Copart Inc.'s operating profit margin for the quarter that ended on January 31, 2025 was 37.44%. According to the latest financial reports, Copart Inc.'s net profit margin for the quarter that ended on January 31, 2025 was 28.84%.

Analyzing trends in these margins over time can reveal whether Copart's profitability is improving, declining, or remaining stable. Comparing these ratios with industry averages provides context, indicating whether Copart is performing better or worse than its peers. For instance, if Copart's gross profit margin is consistently higher than the industry average, it may suggest that the company has a competitive advantage in managing its production costs.

Operational efficiency is a key driver of profitability. Effective cost management directly impacts gross margins, and consistent monitoring of these trends is essential. For example, reductions in operating expenses as a percentage of revenue can lead to higher operating profit margins, indicating improved efficiency.

Additionally, you might be interested in learning more about Mission Statement, Vision, & Core Values of Copart, Inc. (CPRT).

Copart, Inc. (CPRT) Debt vs. Equity Structure

Understanding how Copart, Inc. (CPRT) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity.

As of the second quarter of fiscal year 2024, Copart, Inc. (CPRT) maintained a relatively conservative debt profile. The company's financial statements provide insights into its debt structure:

• Total debt: $400 million

The debt-to-equity ratio is a key metric to assess financial leverage. As of January 31, 2024, Copart, Inc. (CPRT) reported a debt-to-equity ratio of approximately 0.17.

This ratio is calculated as:

Total Liabilities / Shareholder Equity = $1.48 billion / $8.59 billion = 0.17

A lower debt-to-equity ratio generally indicates less financial risk because the company has a smaller proportion of debt compared to equity. Copart, Inc.'s (CPRT) ratio of 0.17 suggests a conservative approach to leverage, which can be seen positively by investors concerned about financial stability.

Here's a snapshot of Copart, Inc.'s (CPRT) debt and equity composition based on the latest available data:

Copart, Inc. (CPRT) strategically balances debt and equity to fund its operations and expansion. While specific details on recent debt issuances or refinancing activities require up-to-date information, the company's approach to maintaining a low debt-to-equity ratio reflects a preference for financial prudence. This approach allows Copart, Inc. (CPRT) to:

• Fund growth initiatives without taking on excessive debt.
• Maintain financial flexibility to respond to market changes.
• Signal financial stability to investors.

For more insights into Copart, Inc.'s (CPRT) values, explore Mission Statement, Vision, & Core Values of Copart, Inc. (CPRT).

Copart, Inc. (CPRT) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and long-term liabilities, respectively. For Copart, Inc. (CPRT), assessing these metrics provides insights into its operational efficiency and financial stability.

Assessing Copart, Inc.'s Liquidity:

Analyzing Copart's liquidity involves examining its current and quick ratios, working capital trends, and cash flow statements. These components offer a comprehensive view of the company's ability to cover its immediate financial obligations.

• Current and Quick Ratios: These ratios measure a company's ability to pay off short-term liabilities with its short-term assets.

For the fiscal year 2024, Copart's financial data provides the following insights:

• The current ratio, calculated by dividing current assets by current liabilities, stood at 2.1 as of July 31, 2024. This indicates that Copart has $2.10 in current assets for every $1.00 of current liabilities.
• The quick ratio, which excludes inventories from current assets to provide a more conservative measure, was also 2.1 as of July 31, 2024. The consistency between the current and quick ratios suggests that Copart's current assets are highly liquid.

• Analysis of Working Capital Trends: Working capital, defined as current assets minus current liabilities, is a measure of a company's short-term financial health.

Copart's working capital has shown a positive trend. As of July 31, 2024, the company reported working capital of $1.14 billion, compared to $954.41 million as of July 31, 2023. This increase indicates improved short-term financial flexibility.

• Cash Flow Statements Overview: Examining the cash flow statement provides insights into the sources and uses of cash. It is divided into three main activities: operating, investing, and financing.

Copart’s cash flow trends for the fiscal year 2024 are as follows:

The statement of cash flows highlights that Copart’s operating activities are a strong source of cash, which supports its investments and financing activities. The increase in net cash from operating activities from $1.06 billion in 2023 to $1.24 billion in 2024 underscores the company's robust operational performance.

Potential Liquidity Concerns or Strengths:

Based on the analysis:

• Strengths: Copart demonstrates strong liquidity positions with healthy current and quick ratios. The increasing working capital and positive cash flow from operations further reinforce its ability to meet short-term obligations.
• Concerns: There are no immediate liquidity concerns evident from the data. However, continuous monitoring of these metrics is essential to ensure sustained financial health.

For additional insights into Copart's strategic direction, refer to Mission Statement, Vision, & Core Values of Copart, Inc. (CPRT).

Copart, Inc. (CPRT) Valuation Analysis

Determining whether Copart, Inc. (CPRT) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. Examining metrics such as price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) provides insight into the company's valuation relative to its earnings, book value, and operational cash flow.

As of April 2025, up-to-date financial data for Copart, Inc. is essential for an accurate valuation assessment. For instance, a recent P/E ratio, reflecting the relationship between Copart's stock price and its earnings per share, helps investors understand how much they are paying for each dollar of earnings. Similarly, the P/B ratio compares the company's market capitalization to its book value, indicating whether the stock is trading at a premium or discount to its net asset value. The EV/EBITDA ratio offers a view of overall company valuation, incorporating both debt and equity, relative to its earnings before interest, taxes, depreciation, and amortization.

Analyzing Copart's stock price trends over the last 12 months (or longer) reveals market sentiment and historical performance. Significant price appreciation may suggest overvaluation, while a declining or stagnant price could indicate undervaluation or market concerns. It's important to consider broader market trends and industry-specific factors that may influence Copart's stock performance. Here's a look at factors that can influence the stock price:

• Overall market conditions
• Industry trends
• Company-specific news and events

Copart, Inc. does not currently offer a dividend yield, so dividend payout ratios are not applicable. However, for companies that do offer dividends, these metrics are crucial in assessing the sustainability of dividend payments and the company's commitment to returning value to shareholders.

Finally, considering analyst consensus on Copart's stock valuation provides an external perspective. Analyst ratings, such as buy, hold, or sell, reflect their overall assessment of the stock's potential upside or downside, based on fundamental analysis, industry outlook, and macroeconomic factors. Keep in mind that analyst ratings are not always correct and should be viewed as just one piece of the puzzle.

Below is an example of how financial ratios can be used to evaluate a company. Note that this is not Copart's actual data, but rather an illustrative example:

To gain further insight into Copart's strategic direction, review Mission Statement, Vision, & Core Values of Copart, Inc. (CPRT).

Copart, Inc. (CPRT) Risk Factors

Copart, Inc. (CPRT) faces a variety of risks that could impact its financial health. These risks can be broadly categorized into internal and external factors, encompassing industry competition, regulatory changes, and market conditions.

One of the primary external risks is intense competition within the online auto auction industry. Copart faces competition from other established players and new entrants, which could pressure pricing and market share. Changes in government regulations regarding vehicle sales, environmental standards, or international trade could also pose significant risks. Economic downturns and fluctuations in global markets can reduce demand for vehicles, affecting sales volumes and profitability.

Internally, operational risks include potential disruptions to Copart's auction platforms, cybersecurity threats, and logistical challenges in managing a large inventory of vehicles across numerous locations. Financial risks involve managing debt levels, interest rate fluctuations, and the potential for impairment of assets. Strategic risks include the need to adapt to changing consumer preferences, technological advancements, and the evolving landscape of the automotive industry.

While specific mitigation strategies are not detailed here, companies like Copart often employ various tactics to address these risks, such as diversifying service offerings, investing in technology and cybersecurity, and maintaining strong relationships with regulatory bodies. Monitoring these risk factors is crucial for investors to assess the long-term financial stability and growth potential of Copart.

Here are some key risks that Copart, Inc. (CPRT) faces:

• Industry Competition: Intense competition in the online auto auction space.
• Regulatory Changes: Shifts in government regulations affecting vehicle sales and environmental standards.
• Market Conditions: Economic downturns reducing demand for vehicles.
• Operational Risks: Disruptions to auction platforms and cybersecurity threats.
• Financial Risks: Managing debt and interest rate fluctuations.
• Strategic Risks: Adapting to changing consumer preferences and technological advancements.

For more insights into Copart, Inc.'s (CPRT) financial health, you can read: Breaking Down Copart, Inc. (CPRT) Financial Health: Key Insights for Investors

Copart, Inc. (CPRT) Growth Opportunities

Copart, Inc. (CPRT) is strategically positioned for future growth, driven by several key factors. These include continuous product innovations, expansion into new markets, strategic acquisitions, and various partnerships. These elements collectively enhance Copart's competitive edge and future revenue potential.

Key growth drivers for Copart, Inc. (CPRT) include:

• Product Innovations: Copart consistently updates its technology and service offerings to meet the evolving needs of its customers.
• Market Expansions: Copart has been expanding its global footprint, entering new markets and increasing its presence in existing ones.
• Acquisitions: Copart has a history of strategic acquisitions that have helped it expand its service offerings and geographic reach.

Future growth prospects for Copart, Inc. (CPRT) also hinge on its ability to leverage its competitive advantages:

• Global Footprint: Copart operates in over 200 locations in 11 countries, giving it a significant competitive advantage.
• Technological Innovation: Copart's VB3 platform and mobile app provide a seamless and efficient bidding experience for buyers.
• Strong Relationships: Copart has strong relationships with insurance companies, dealers, and other vehicle suppliers.

While specific future revenue growth projections and earnings estimates require up-to-date financial analysis, Copart's strategic initiatives and partnerships indicate a positive trajectory. For insights into the company’s guiding principles, refer to: Mission Statement, Vision, & Core Values of Copart, Inc. (CPRT).

A look at Copart, Inc.'s (CPRT) recent performance and strategic initiatives offers insight into its growth trajectory. Here's an overview based on the latest available information:

Copart, Inc. (CPRT) is well-positioned for continued growth, leveraging its technological innovation, global presence, and strategic relationships. While specific financial projections depend on future market conditions and company performance, the existing strategies and competitive advantages support a positive outlook.