The majority of the vehicles in these auctions are either damaged or recovered stolen typically sold to rebuilders, used vehicle importers, or for their parts value. The company is presenting strong growth, with a consolidating market position highlighted by an impressive 235% return for the stock over the past three years. We think the outlook is positive, supported by an ongoing expansion and steady profitability. This article takes a look at recent developments and our view on where Copart is headed next.
Copart Fiscal Q1 Earnings Recap
The company reported a big fiscal 2020 Q1 result back in November, with non-GAAP EPS of $0.65 compared to $0.47 in the period last year and also $0.06 ahead of expectations. Quarterly revenue of $554.4 million increased by 20.2% y/y and also beat the market estimate. Gross margin expanded to 46% from 42.9% in Q1 2019 based on higher average selling prices. The operating income margin also expanded by 420 basis points. Reported net income climbed by 91% to $218 million.
The story here was overall strong momentum in the platform supported by a 25% y/y growth in U.S. revenues. International revenues, which represent about 17% of the total, grew by a more moderate 11.4%. Management highlighted how an increasing number of unique bidders in live auctions and also an increasing mix of less-damaged cars (which have a broader appeal) drove a higher average selling price ("ASP"), supporting higher revenues and margins.
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