Amidst the fast-paced and highly competitive business environment of today, conducting comprehensive company analysis is essential for investors and industry enthusiasts. In this article, we will delve into an extensive industry comparison, evaluating Copart CPRT in comparison to its major competitors within the Commercial Services & Supplies industry. By analyzing critical financial metrics, market position, and growth potential, our objective is to provide valuable insights for investors and offer a deeper understanding of company's performance in the industry.
Copart Background
Based in Dallas, Copart operates an online salvage vehicle auction with operations in 11 countries across North America, Europe, and the Middle East, facilitating over 3.5 million transactions annually. The company utilizes its virtual bidding platform, VB3, to connect vehicle sellers with over 750,000 registered buyers around the world. Buyers primarily consist of vehicle dismantlers, rebuilders, individuals and used vehicle retailers. About 80% of Copart's vehicle volume is supplied by auto insurance companies holding vehicles deemed a total loss. Copart also offers services such as vehicle transportation, storage, title transfer, and salvage value estimation. The company primarily operates on a consignment basis and collects fees based on the vehicle's final selling price.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Copart Inc | 35.32 | 7.23 | 11.29 | 6.01% | $0.43 | $0.46 | 12.93% |
| Cintas Corp | 37.76 | 12.54 | 5.78 | 9.7% | $0.61 | $1.14 | 2.53% |
| RB Global Inc | 61.58 | 2.46 | 3.55 | 1.58% | $0.33 | $0.53 | 128.38% |
| UniFirst Corp | 29.16 | 1.50 | 1.37 | 1.23% | $0.06 | $0.2 | 12.73% |
| Driven Brands Holdings Inc | 14.77 | 1.12 | 0.87 | 2.19% | $0.14 | $0.32 | 19.31% |
| VSE Corp | 19.92 | 1.83 | 0.69 | 1.91% | $0.03 | $0.03 | 20.89% |
| Healthcare Services Group Inc | 19.42 | 1.66 | 0.45 | 1.93% | $0.02 | $0.05 | -1.39% |
| Liquidity Services Inc | 27.74 | 3.93 | 2.09 | 4.23% | $0.01 | $0.05 | 15.61% |
| Viad Corp | 47.38 | 33.60 | 0.46 | 111.53% | $0.04 | $0.03 | 0.35% |
| Average | 32.22 | 7.33 | 1.91 | 16.79% | $0.16 | $0.29 | 24.8% |
When conducting a detailed analysis of Copart, the following trends become clear:
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The current Price to Earnings ratio of 35.32 is 1.1x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.
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With a Price to Book ratio of 7.23, significantly falling below the industry average by 0.99x, it suggests undervaluation and the possibility of untapped growth prospects.
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The Price to Sales ratio of 11.29, which is 5.91x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
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The company has a lower Return on Equity (ROE) of 6.01%, which is 10.78% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $430 Million is 2.69x above the industry average, highlighting stronger profitability and robust cash flow generation.
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With higher gross profit of $460 Million, which indicates 1.59x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
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The company's revenue growth of 12.93% is significantly lower compared to the industry average of 24.8%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In terms of the Debt-to-Equity ratio, Copart stands in comparison with its top 4 peers, leading to the following comparisons:
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Among its top 4 peers, Copart has a stronger financial position with a lower debt-to-equity ratio of 0.02.
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This indicates that the company relies less on debt financing and maintains a more favorable balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
The high PE ratio suggests that Copart may be overvalued compared to its peers in the Commercial Services & Supplies industry. The low PB ratio indicates that the stock may be undervalued based on its book value. The high PS ratio suggests that Copart may be overvalued relative to its revenue. The low ROE indicates that Copart may have lower profitability compared to its peers. The high EBITDA and gross profit suggest that Copart may have strong financial performance. The low revenue growth suggests that Copart may have slower growth compared to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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