Performance Comparison: Copart And Competitors In Commercial Services & Supplies Industry

Copart, Inc. -0.68% Post

Copart, Inc.

CPRT

54.38

54.38

-0.68%

0.00% Post

In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Copart (NASDAQ:CPRT) in relation to its major competitors in the Commercial Services & Supplies industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within 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 35.70 7.33 11.85 5.36% $0.44 $0.46 14.22%
Cintas Corp 43.56 15.25 6.76 9.28% $0.61 $1.14 1.49%
RB Global Inc 65.37 2.48 3.25 1.11% $0.29 $0.47 147.83%
UniFirst Corp 33.53 1.73 1.56 1.39% $0.07 $0.19 10.74%
Vestis Corp 12.94 3.16 0.98 17.9% $0.15 $0.23 4.79%
Matthews International Corp 29.92 2.18 0.63 3.38% $0.05 $0.15 5.04%
VSE Corp 22.19 1.69 0.82 1.77% $0.03 $0.03 38.22%
Viad Corp 52.34 14.81 0.64 87.34% $0.08 $0.08 -4.4%
Healthcare Services Group Inc 24.12 1.73 0.46 -1.23% $-0.0 $0.03 -0.75%
Liquidity Services Inc 26.18 3.24 1.74 3.96% $0.01 $0.04 6.32%
Average 34.46 5.14 1.87 13.88% $0.14 $0.26 23.25%

By closely examining Copart, we can identify the following trends:

  • The current Price to Earnings ratio of 35.7 is 1.04x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

  • The elevated Price to Book ratio of 7.33 relative to the industry average by 1.43x suggests company might be overvalued based on its book value.

  • With a relatively high Price to Sales ratio of 11.85, which is 6.34x the industry average, the stock might be considered overvalued based on sales performance.

  • The company has a lower Return on Equity (ROE) of 5.36%, which is 8.52% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.

  • The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $440 Million is 3.14x above the industry average, highlighting stronger profitability and robust cash flow generation.

  • Compared to its industry, the company has higher gross profit of $460 Million, which indicates 1.77x above the industry average, indicating stronger profitability and higher earnings from its core operations.

  • With a revenue growth of 14.22%, which is much lower than the industry average of 23.25%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

debt to equity

The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.

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:

  • When comparing the debt-to-equity ratio, Copart is in a stronger financial position compared to its top 4 peers.

  • The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.02.

Key Takeaways

The valuation analysis for Copart in the Commercial Services & Supplies industry indicates that its PE, PB, and PS ratios are high compared to its peers. This suggests that the company may be overvalued in terms of its earnings, book value, and sales. On the other hand, Copart's low ROE and revenue growth, combined with its high EBITDA and gross profit, indicate potential challenges in generating returns and expanding its business. Overall, the analysis suggests that Copart's valuation may not be favorable compared to its industry peers.

This article was generated by Benzinga's automated content engine and reviewed by an editor.

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