How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Copart, Inc. (CPRT) ten years ago? It may not have been easy to hold on to CPRT for all that time, but if you did, how much would your investment be worth today?
Copart, Inc.'s Business In-Depth
With that in mind, let's take a look at Copart, Inc.'s main business drivers.
Based in Dallas, TX, Copart, Inc. was founded in 1982. The company provides online auction of salvage and clean-title vehicles. It also offers a wide range of remarketing services. This is done mainly over the Internet, through its Virtual Bidding Third Generation (VB3) Internet auction-style sales technology. Sellers are primarily insurance companies, banks, financial institutions, charities, car dealerships, fleet operators, and vehicle rental companies. Buyers include licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers and exporters, as well as the general public.
Copart’s services include online supplier access, salvage estimation services, end-of-life vehicle processing, transportation services, vehicle inspection stations, on-demand reporting, title processing and procurement, among others.
The company primarily has two revenue streams: service revenues and purchased vehicles. Service revenues come from Copart acting as an intermediary in vehicle sales. In these cases, Copart does not own the vehicles; instead, it facilitates the auction process through its platform. The company earns money by charging fees for the services provided during the auction. Purchased vehicle revenues are generated when Copart buys vehicles outright, takes ownership, and then sells them at a higher price. The profit comes from the difference between the purchase price and the marked-up selling price.
In fiscal year 2024, service revenues constituted 82.7% of the company's total revenue, while vehicle sales accounted for the remaining 17.3%.
With operations at more than 250 locations in 11 countries, Copart has more than 265,000 vehicles available online every day. In the United States, Canada, Brazil, the Republic of Ireland, Finland, the U.A.E., Oman and Bahrain, Copart sells vehicles primarily as an agent and earns revenues from auction-related sales transaction fees paid by vehicle suppliers and buyers, as well as the associated fees for services following the auction, such as delivery and storage. In the United Kingdom, Spain and Germany, it operates both as agent and principal. In Germany and Spain, Copart also generates revenues from sales listing fees for listing vehicles on behalf of insurance companies and insurance experts.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Copart, Inc. ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in November 2014 would be worth $14,065.09, or a 1,306.51% gain, as of November 26, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 189.66% and gold's return of 110.14% over the same time frame.
Looking ahead, analysts are expecting more upside for CPRT.
Copart enjoys a leadership position in the automotive auction market, commanding roughly 40% of the market share. Thanks to its large scale, solid market leadership and continued expansion efforts, the company’s revenues look poised for an upward trajectory. The acquisition of Purple Wave is also a positive development. However, Copart has been doubling down on storage-capacity expansion and will continue to prioritize expansion efforts, which are likely to clip cash flows. Operating costs have been rising for several quarters amid increasing G&A expenditure. The G&A expense may continue to increase as the company continues to invest in its sales marketing product and technology functions, hurting its near-term margins. The stock warrants a cautious stance for the time being.
Shares have gained 22.95% over the past four weeks and there have been 2 higher earnings estimate revisions for fiscal 2025 compared to none lower. The consensus estimate has moved up as well.5 Stocks Set to Double
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Today, See These 5 Potential Home Runs >>Copart, Inc. (CPRT) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
