CPRT - Embedded Expectations Analysis - 2021 04 01
Copart, Inc. (CPRT:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 29.5x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about their inventory levels, gross margins, and ARPU growthSpecifically, management may lack confidence in their ability to improve customer integration efficiency, sustain gross margins, and expand their capacity. Furthermore, they may have concerns about decreases in their global inventory, the sustainability of quarterly ASP increases, and their potential as an online-only auction platform. Finally, management may be concerned about the impact of FX rates on customer buying frequency and the effect of principal mix on ARPU growth, and they may be overstating the strength of the long-term car auction industry outlook
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.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.