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Investing.com - CFRA lowered its price target on Copart (NASDAQ:CPRT) to $65 from $70 while maintaining a Strong Buy rating on the auto auction company’s shares. According to InvestingPro data, Copart maintains a "GREAT" financial health score, with the stock currently trading near its 52-week low of $45.05.
The research firm cited a slight valuation discount compared to Copart’s historical averages, applying a forward price-to-earnings multiple of 32.5x for fiscal year 2027, below the company’s five-year average of 33.6x. The company currently trades at a P/E ratio of 31.29x, with InvestingPro analysis suggesting the stock is fairly valued at current levels.
CFRA maintained its fiscal 2026 adjusted earnings per share estimate of $1.80 and introduced a fiscal 2027 forecast of $2.00, projecting continued growth for the company.
The firm highlighted Copart’s recent quarterly performance, which exceeded expectations with improved gross margins that were 290 basis points higher year-over-year and 60 basis points above consensus estimates, suggesting more effective cost management. InvestingPro data confirms this strength, showing an impressive gross profit margin of 49.31% and a robust current ratio of 8.42, indicating strong operational efficiency and liquidity. Discover 12 additional exclusive insights about Copart with an InvestingPro subscription.
Despite lowering the price target, CFRA sees approximately 30% upside potential for Copart shares over the next 12 months and views the stock as a "compelling mean reversion opportunity" given its year-to-date underperformance of 13% and substantial net cash balance of $4.7 billion.
In other recent news, Copart reported its fourth-quarter earnings for fiscal year 2025, exceeding analysts’ expectations with an earnings per share (EPS) of $0.41, surpassing the forecasted $0.36. However, the company experienced a slight revenue shortfall, reporting $1.13 billion compared to the anticipated $1.14 billion. Despite this, the earnings performance was viewed positively, highlighting Copart’s strategic focus on technology and auction liquidity. Following the earnings report, Stephens adjusted its price target for Copart, reducing it from $50.00 to $46.00, while maintaining an Equal Weight rating. This adjustment was influenced by competitive concerns surrounding the company. The developments reflect the market’s mixed reactions to Copart’s financial results and future prospects. These recent updates provide investors with critical insights into Copart’s financial health and strategic directions.
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