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 $55.16, Copart Inc has witnessed a daily gain of 1.04%, marked against a three-month change of -2.85%. A thorough analysis, underlined by the GF Score, suggests that Copart Inc is well-positioned for substantial growth in the near future.
Understanding 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: 5/10
- Momentum rank: 7/10
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, GuruFocus assigned Copart Inc the GF Score of 96 out of 100, which signals the highest outperformance potential.
Company Overview: Copart Inc
Based in Dallas, Copart Inc operates an online salvage vehicle auction with operations in 11 countries across North America, Europe, and the Middle East, facilitating over 3.5 million transactions annually. The company utilizes its virtual bidding platform, VB3, to connect vehicle sellers with over 750,000 registered buyers around the world. Buyers primarily consist of vehicle dismantlers, rebuilders, individuals, and used vehicle retailers. About 80% of Copart's vehicle volume is supplied by auto insurance companies holding vehicles deemed a total loss. Copart also offers services such as vehicle transportation, storage, title transfer, and salvage value estimation. The company primarily operates on a consignment basis and collects 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 39.41, 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. 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 15.8%, which outperforms better than 70.72% of 963 companies in the Business Services industry. Moreover, Copart Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 11.3, and the rate over the past five years is 17.7. This trend accentuates the company's continued capability to drive growth.
Conclusion: Copart Inc's Path to Market Leadership
Copart Inc's financial strength, profitability, and growth metrics, as highlighted by the GF Score, underscore the firm's unparalleled position for potential outperformance. The company's strategic initiatives, robust financial health, and consistent growth trajectory make it a compelling choice for value investors seeking long-term gains. As Copart Inc continues to leverage its competitive advantages and expand its market presence, it remains a stock to watch for those aiming to capitalize on its growth potential. For more insights into companies with strong GF Scores, GuruFocus Premium members can explore the following screener link: GF Score Screen.
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.
