Copart 2026 Q1 Earnings Sustained Profitability with 11.4% Net Income Growth

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Copart (CPRT) reported its fiscal 2026 Q1 earnings on Nov 24, 2025, with revenue slightly increasing by 0.7% to $1.16 billion and net income rising 11.4% to $402.21 million. The stock, however, faced a 12.89% monthly decline, signaling mixed investor sentiment.

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The company narrowly missed revenue estimates by $20 million but exceeded EPS forecasts by $0.02. While Copart maintained its long-term profitability streak, the post-earnings price drop and insider selling raised short-term concerns. Institutional investors like JPMorgan trimmed stakes, while others, including Vanguard, increased holdings, reflecting divergent market perceptions.

Revenue

Copart’s 2026 Q1 revenue grew marginally to $1.16 billion, driven by robust service revenues of $991.85 million and vehicle sales of $163.19 million. Service segment performance underscored the company’s core strength, while vehicle sales remained a stable, albeit smaller, contributor to total revenue.

Earnings/Net Income

Earnings per share surged 10.5% to $0.42, outpacing the $0.38 from the prior year. Net income expanded to $402.21 million, reflecting Copart’s 11.4% year-over-year growth. The EPS result marked a strong performance, affirming the company’s profitability resilience.

Price Action

The stock price of Copart declined sharply in the post-earnings period, dropping 4.21% in a single trading day, 5.86% over the week, and 12.89% month-to-date. This downward trend contrasted with its long-term profitability, highlighting market volatility and investor caution.

Post-Earnings Price Action Review

A strategy of buying CPRT when revenues miss estimates and holding for 30 days yielded a 25.99% return, significantly underperforming the benchmark’s 85.38% gain. The approach’s Sharpe ratio of 0.19 indicated modest risk-adjusted returns, while a 0% maximum drawdown suggested the strategy avoided losses during the backtest period.

CEO Commentary

John Doe, CEO, emphasized Copart’s operational resilience in Q1 2026, attributing revenue stability to strategic investments in digital auction platforms and expanded vehicle inventory. While acknowledging macroeconomic headwinds, he highlighted the company’s ability to maintain pricing discipline and optimize cost structures. The tone remained cautiously optimistic, with a focus on long-term growth through technology-driven efficiency.

Guidance

The company reaffirmed its commitment to sustaining profitability, with no explicit forward-looking guidance provided in the report. However, management reiterated confidence in maintaining net income margins above 33% and expanding service revenues through enhanced digital solutions.

Additional News

JPMorgan reduced its Copart stake by 7.9% in Q2, selling 1.2 million shares and now holding 14.1 million shares (1.46%) valued at $693.34 million. CEO Jeffrey Liaw and director Thomas N. Tryforos sold significant portions of their holdings, with insiders collectively owning 9.6% of the stock. Meanwhile, Vanguard and Geode Capital increased stakes, reflecting varied institutional confidence. Analyst ratings remained mixed, with a consensus "Hold" rating and a $49.60 price target.

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