Key Highlights

  • Copart shares are trading up 5.73% at $31.86, against a previous close of $30.13.
  • The ISM Manufacturing reading of 55.5 came in stronger than expected and lifted industrials by nearly 2%.
  • The average analyst target is $37.80, with a Moderate Buy consensus.
  • JPMorgan upgraded the stock to overweight in September with a $40 target.
  • The shares trade above their 50-day average near $29.57 but below the 200-day near $32.44.

Copart (NASDAQ:CPRT) shares are rallying alongside a broad cyclical rebound, with no company-specific catalyst identified. Falling oil prices on U.S.-Iran diplomacy hopes and a stronger-than-expected ISM manufacturing reading of 55.5 lifted industrials by nearly 2%. Trading Volume is below average.

Cyclical Rebound Lifts Industrials

The move comes as U.S. indexes recover from Friday's selloff. Recent coverage of Copart centers on institutional filings and a still-positive analyst backdrop.

The consensus rating is Moderate Buy with an average target of $37.80. JPMorgan upgraded the stock to overweight in September with a $40 target.

Online Salvage Auction Model

Dallas-based Copart operates online vehicle auctions and remarketing services in 11 countries through its proprietary VB3 virtual bidding platform. It connects sellers, mainly insurers with total-loss vehicles, banks, fleets and dealers, to buyers such as dismantlers, rebuilders, dealers, exporters and the public. It earns most of its Revenue from commissions and fees for auctions, storage, logistics and title processing, and it generally does not own the vehicles it sells.

The company is a leader in a U.S. salvage auction market that is close to a duopoly. It also offers technology tools and direct-purchase channels.

Latest Results and Valuation Markers

In its most recent quarterly report, EPS of $0.35 missed the $0.38 consensus, while revenue of $1.15 billion beat estimates. The stock trades at 19.21 times forward Earnings and 20.51 times trailing earnings, with trailing EPS of $1.61 and a market Capitalization of about $29.51 billion. Its 52-week range runs from $25.72 to $43.38.

Jobs Report and Midterm Elections as Volatility Markers

Midterm elections and the jobs report remain near-term volatility risks. Investors will watch whether the shares can clear the 200-day average near $32.44 after trading above the 50-day average.