Copart Stock (CPRT) Earnings Mixed – Was The CEO’s 50,000 Share Buy Justified?

Hi there, fellow investors. Copart just

released its earnings report and results are mixed. But remember, the CEO bought

are mixed. But remember, the CEO bought 50,000 shares a couple of weeks ago, and today I'll show you whether these insider buys look smart after the published report and what I'm doing as a

long-term investor. The stock is down

long-term investor. The stock is down about 2 and 12% so far in after hours trading. So, investors are not quite

trading. So, investors are not quite happy, but also not hugely disappointed.

So, in today's video, I'll break down the earnings report for you guys, what it means for investors. I'll have a look at the insider buying that has been going on for Copart stock, where growth

opportunities actually lie, and at the end of the video, we'll have a look at the financials and of course the intrinsic value of the stock. Thank you

for tuning in and let's dive right in.

[music] Now, first of all, what is important to note is that revenue came in at 1.6 $16 billion which is a little lower than

expected. Expected were $1.18 billion.

expected. Expected were $1.18 billion.

So investors are not happy because sales were not as high. On the other hand side, diluted earnings per share came in at 41 cents compared to 37 cents last

year and expectations were around 40%.

So they beat earnings right here and that was an increase of 11.7% which is actually quite good. But this is why results are rather mixed and the stock

is not moving a lot. So it's more or less going sideways. Now what else we can see is that cash cash equivalents and restricted cash uh if we zoom just

over here. So we can see they have $5.2

over here. So we can see they have $5.2 billion in cash and cash equivalents compared to July when they reported $2.78 billion in cash. So, this is a

huge jump and that's good and that they have a lot of uh cash right here and they only have debt of a 100 million or so. So, they could easily pay off the

so. So, they could easily pay off the debt. That's actually a good development

debt. That's actually a good development and that's very healthy. Um, that's what I like to see. I also like the direction of the stockholders equity when we have a look right here. This went up like

more than 400 million. Um, that's also really good. Let's have a look at the

really good. Let's have a look at the service revenues. And we can see in

service revenues. And we can see in total this is $990 million in service revenues compared to $986 million in the previous year. So this is

a slight growth but not a lot actually.

And when we have a look at the United States 855 compared to $859 in the previous year and internationally

136 compared to 126. So what we can see here revenue-wise, the company is growing faster internationally and actually declining a little bit in the United States. Looking at the vehicle

United States. Looking at the vehicle sales, there is a different picture. So

we can see 97 million vehicles sold compared to 87 million in the previous year in the United States. And

internationally 66 million vehicles sold internationally in the 3 months ended October 31st. And in the prior year, we

October 31st. And in the prior year, we can see 72 million. So this number went down but in the US went up. So uh this is a different picture right here. So it

really is a rather mixed picture um that is being drawn here. And as you can see stock is coming up a little again. So we

can say it's going sideways really. This

is not a big jump. So more or less in line what investors were expecting I would say. But let me show you the

would say. But let me show you the transactions of the CEO. So most

recently he exercised options of 50,000 shares more or less. He right away sold 24,000 but he kept half of those in

stocks. So and also in July he exercised

stocks. So and also in July he exercised options of 50,000 shares and he sold 24,000. So he's keeping more shares than

24,000. So he's keeping more shares than he's selling. And this has been going on

he's selling. And this has been going on for half a year now or more than half a year. Whereas insider selling is not

year. Whereas insider selling is not such a big deal in my eyes. insider

buying is a really good sign. And I also wanted to have a look at okay what the business model of Copart really is. What

would make their revenue increase and actually when a car is a total loss. Uh

so um that that is their business. So

total loss frequency would need to increase. And how does that happen? that

increase. And how does that happen? that

happens for example with rising repair costs for electric vehicles for example which we will have more of in the future or more and more and more. So um this is

why I'm optimistic about the stock. And

another point right here is the aging car fleet. So this means that we are in

car fleet. So this means that we are in a cyclical business. uh you know people in businesses buy cars and then they're good for a couple of years but after a

couple of years um they have to buy new ones because the cars are getting old and we can see this nicely in the chart.

There will be times when earnings are higher and times where earnings will be lower because the cycle hasn't turned around yet. And we can see this here. So

around yet. And we can see this here. So

the stock price goes up, down, up, down, up, down. And right now, I would argue

up, down. And right now, I would argue that we are in a down cycle. And so this is a good entry point for the stock in my eyes because we're down cycle. And

the stock will go up cycle again. And

then it would be a good time to sell it again. Let's have a quick look at the

again. Let's have a quick look at the financials. We can see no down here.

financials. We can see no down here.

It's a very stable business. Actually,

growth has come down a little bit, but uh in my eyes, it's going to pick up again. um earnings per share also very

again. um earnings per share also very stable very stable growth has been coming down the growth a little but in my eyes it's going to pick up because the cycle is going to turn around at

some point free cash flow also um knows one direction which is up um so this is good debt to equity I love it nothing to talk about here it's very low very

healthy p ratio net really has been coming down due to the declining stock price but at the same time the earnings and the revenue have not decreased so this is actually a value opportunity and

P ratio for the next 12 months, same picture and the return on invested capital is very solid um has been turning around here in 2025. So this is

one argument for me that this is actually a down cycle and a good entry point as an investor. Now give me a minute to argue my intrinsic value calculation right here. uh intrinsic

value I see it at about $55 including a margin of safety of 30%. Current price

sits at $41 and then after hours trading as we can see is 40.9. So the stock came further up is now actually unchanged. So

um yeah this confirms the picture that it's a mixed um picture. So all in all this would be an upside of about 33% from current valuation. In the worst

case scenario, downside risk of 22%, in a best case scenario, upside of 200%, um, so let's have a look at this. In the

worst case scenario, I assume 5% of growth multiple of 20. I think u that makes sense and downside of 20% makes sense. Best case scenario is of course

sense. Best case scenario is of course optimistic by definition. This is not going to happen very likely in the near future. So a multiple of 45 and a growth

future. So a multiple of 45 and a growth rate of 19% is very much at the high end. But I have it in the calculation

end. But I have it in the calculation with a low probability. So uh that should be fine. And in the normal case scenario, so you can see here I'm assuming a free cash flow of $1.4

billion and a growth rate of 16.5% multiple of 34 and cash. You can see here 5.2 billion and total debt of 100 million. So that is really nothing. Now

million. So that is really nothing. Now

I do think Copart is a really great value opportunity for investors. It's

down cycle. So it's a great point to buy into the stock. The only thing about today's earnings report is that revenue has not grown as strongly and there are certain business areas that are actually

declining. This is what I don't like.

declining. This is what I don't like.

But again, we are down cycle and this may turn around at some point and as a value investor, this is the time to buy in in my eyes. Um, and we can wait and hold the stock until business turns

around and grows more strongly and then the stock price will naturally go up and this will be the time to profit from the investment. Let me know what you think

investment. Let me know what you think about the stock. If you have a different opinion than me, I think it's a good buying opportunity. For me, the stock is

buying opportunity. For me, the stock is a buy right now. I have it in my portfolio. Please let me know down in

portfolio. Please let me know down in the comments below whether you think uh differently. Please do also check out my

differently. Please do also check out my video on constellation software. I think

this stock is also a great value opportunity right now at a great price.

Would love to see you over there.