Q: Copart is down 15 % in the last 5 days.
Why is it down so much?
Would you view this as a buying opportunity?
Would is your opinion of this company as a long term hold? How does it compare to RBA?
Why is it down so much?
Would you view this as a buying opportunity?
Would is your opinion of this company as a long term hold? How does it compare to RBA?
5i Research Answer:
CPRT reported revenue that was below estimates last week, and its growth lagged peers. There has also been a lull in construction equipment volumes. The stock fell the most since 2020. A few brokers also lowered their ratings. It is still expected to show decent earnings growth this year and next, and is sitting on $4B cash (no net debt). Still, it is not cheap at 34X earnings. We think it may flat-line or drift for awhile after these results and is just a HOLD today. RBA is smaller (by about half), cheaper (by 8 P/E points) and offers a dividend of 1% vs none for CPRT. RBA is also expected to show very good growth this year (+50%) but slowing growth in 2026 (10% to 15%). It is much more levered, but it's stock is outperforming.