CPRT - Embedded Expectations Analysis - 2020 07 16
Copart, Inc. (CPRT:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 32.3x Uniform P/E. At these levels, the market is pricing in expectations to remain at current levels, and management may be concerned about their costs and inventory management, and the sustainability of various business tailwindsSpecifically, management may have concerns about their investment in new yards and expansion projects and about continued declines in driving activity. In addition, management may be concerned about the impact of declines in their U.S. inventory and continued increases in their unit processing cost. Furthermore, they may lack confidence in their ability to keep their businesses open and sustain growth in unique international bidders. Finally, they may have concerns about the volatility of their selling prices and lower ASPs in the near-term, and they may be downplaying concerns about business tailwinds such as auction liquidity, loss frequency, car age, and car damage
Copart is a provider of online auctions and vehicle remarketing services. The company provides vehicle sellers with a range of services to process and sell vehicles primarily over the Internet through its Virtual Bidding Third Generation Internet auction-style sales technology. Vehicle sellers consist primarily of insurance companies, but also include banks, finance companies, charities, fleet operators, dealers and vehicles sourced directly from individual owners. The company sells the vehicles principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers and exporters and, at certain locations, to the general public.
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