Stock Analysis | Copart Outlook - Technical Weakness and Mixed Analyst Views

1. Market Snapshot

Copart (CPRT.O) is showing signs of technical weakness and a mixed analyst outlook. While the stock has risen by 3.06% recently, the technical score of 2.96 (internal diagnostic score, 0-10) suggests a bearish trend and a warning to avoid it for now.

2. News Highlights

Recent news has largely focused on geopolitical and industry-related updates, with limited direct impact on Copart. Here are two key stories:

• Fuel Ethanol Market Report Released - A new market analysis highlights emerging strategies for sustainable aviation fuel, which could indirectly benefit energy and industrial sectors in the long term.
• Gaza Aid Looting Reports - Aid supplies in Gaza have been affected by looting, creating a humanitarian crisis and geopolitical tensions. While unrelated to Copart, it reflects broader instability and could impact global markets indirectly.

3. Analyst Views & Fundamentals

The analyst community has a split outlook on Copart, with one firm showing perfect historical accuracy and another with a poor record.

• Simple Average Rating: 3.50 – The average of all analyst ratings over the last 20 days.
• Weighted Average Rating: 2.20 – A performance-weighted average, emphasizing the track record of analysts.
• Ratings Consistency: Dispersed – Analysts are not aligned, with one firm giving a "Buy" and another a "Neutral" rating.
• Alignment with Price Trend: Mismatched – The stock is currently rising, but weighted expectations remain bearish.

Here are key fundamental factors and their model scores:

• EV/EBIT: 14.93 – Score: 2 (internal diagnostic score). A high EV/EBIT ratio suggests the stock is overvalued relative to its cash flow.
• Profit-Market Value (Profit-MV): 34.17% – Score: 3. A decent ratio indicating profitability relative to market valuation.
• ROA: 4.21% – Score: 4. The return on assets is moderate, indicating average efficiency in asset use.
• Net Income to Revenue (Net Income-Revenue): 111.49% – Score: 4. A very high ratio, suggesting the company is generating significant net income relative to its revenue.
• Gross Profit Margin (GPM): 87.30% – Score: 4. A strong gross margin, indicating the company retains most of its revenue after direct costs.
• PE Ratio: 29.24 – Score: 2. A high P/E ratio may suggest the stock is overvalued or that investors expect strong future earnings growth.

4. Money-Flow Trends

Copart is seeing positive money-flow trends from large and extra-large investors, while small investors are showing negative sentiment.

• Overall Inflow Ratio: 51.45% – Indicates a slight positive net flow into the stock.
• Block Inflow Ratio: 51.90% – Large institutional or block investors are buying the stock.
• Small Trend: Negative – Retail investors are pulling money out or being cautious.
• Medium and Large Trends: Negative – Mixed activity from medium-sized and large retail investors.
• Fund Flow Score: 7.68 (internal diagnostic score, 0-10) – A strong score, indicating healthy inflows from big money despite retail caution.

5. Key Technical Signals

Technical indicators suggest a weak market for Copart, with bearish signals dominating and a low score of 2.96 (internal diagnostic score, 0-10).

• Williams %R Overbought (WR Overbought): 1.85 (internal diagnostic score) – A weak indicator that has historically led to negative returns, with an average return of -0.22% and a win rate of 43.06%.
• Shooting Star: 4.06 (internal diagnostic score) – A neutral to slightly bullish pattern that has had average success, with a 50% win rate and 0.25% average return.

Recent Chart Activity:

• On 20250822 and 20250828, a WR Overbought signal was observed – This pattern has occurred seven times over the last 5 days and is typically bearish.
• On 20250820, a Shooting Star signal appeared – A rare event, but historically neutral to slightly bullish.

6. Conclusion

Copart (CPRT.O) is currently in a weak technical position with a bearish bias, despite strong money flows from large investors. While the fundamentals show a mix of strong and weak indicators, the recent analyst views are inconsistent and the technical score is low.

Actionable Takeaway: Consider waiting for a clearer trend or a pullback in the stock price before taking a position. Keep an eye on the next analyst updates and any developments in the broader market environment that could affect Copart's valuation.