Stock Analysis | Copart Outlook - A Weak Technical Picture Amid Mixed Analyst Outlooks

1. Market Snapshot: Copart's Technical Signal Suggests Avoidance

Copart (CPRT.O) is showing a weak technical profile with an internal diagnostic score of 2.9, urging investors to stay cautious. The stock’s current price is up 2.97% in recent days, but this rise seems at odds with bearish signals and weak technical indicators.

2. News Highlights: Global and Industry News May Distract From Stock’s Fundamental Trends

Recent global news includes reports on the looting of medical supplies in Gaza and North Korea's military advancements supported by Russia. While these developments don’t directly affect Copart, they reflect broader geopolitical uncertainty, which could indirectly weigh on market sentiment.

Also, Accelus secured new financing to boost its commercial expansion, and ETFGI reported a record $1.25 trillion in ETF assets across Asia-Pacific (excluding Japan). These developments highlight a strong capital-raising and asset management environment, though they may not directly impact Copart’s operations or stock price.

3. Analyst Views & Fundamentals: A Mixed Picture From Analysts and Company Financials

Analysts are divided in their views of Copart. The simple average rating is 3.50, while the performance-weighted rating is 2.20. This discrepancy suggests rating inconsistency, with one analyst (from Baird) showing 100% historical accuracy and another (from Stephens & Co.) with a 0% win rate. The current price trend (up 2.97%) diverges from these mixed expectations.

On the fundamentals, Copart’s internal diagnostic score is 5.64, indicating a moderate outlook. Key factors:

• Net income to revenue ratio: 1.11% (internal score: 3.00)
• Basic earnings per share YoY growth: 13.04% (internal score: 3.00)
• Diluted earnings per share YoY growth: 13.24% (internal score: 3.00)
• Fixed assets turnover ratio: 0.696 (internal score: 2.00)
• Interest coverage ratio: -81.68% (internal score: 2.00 — poor)
• Shareholders' equity / Total liabilities: 9.62% (internal score: 1.00 — weak)
• PE ratio: 29.24 (internal score: 1.00 — elevated)

This suggests Copart is generating decent growth in earnings, but its debt and leverage metrics are under pressure.

4. Money-Flow Trends: Big-Money and Retailers Both in Retreat

Copart’s fund-flow score is 7.3, labeled as good. However, the overall trend is negative, with all categories (small, medium, large, and extra-large) showing outflows. Specifically:

• Small inflow ratio: 48.12%
• Medium inflow ratio: 47.81%
• Large inflow ratio: 49.16%
• Extra-large inflow ratio: 47.80%
• Block inflow ratio: 47.98%

These numbers show that both institutional and retail investors are pulling money out of the stock. The internal fund-flow diagnostic score of 7.3 is high, but the negative trend contradicts the technical and analyst signals.

5. Key Technical Signals: Bearish Momentum Dominates

Copart’s technical analysis is not encouraging. The internal diagnostic score is 2.9, with 2 bearish and 1 neutral indicator in the last five days. Here are the key indicators:

• WR Overbought (internal score: 1.97): Signals overbought conditions with a 43.84% historical win rate but negative average returns.
• Bearish Engulfing (internal score: 5.36): Suggests a possible reversal with a 57.14% win rate.
• Marubozu White (internal score: 1.38): A bearish candle pattern with a 33.33% win rate.

Recent chart patterns include a Marubozu White on May 5 and WR Overbought signals on May 6, 12, and 13, pointing to a continuation of weakness. The key insight is that bearish signals dominate, and the market has been relatively quiet in terms of active signals.

6. Conclusion: Consider Waiting for a Pull-Back or Further Clarity

Copart faces conflicting signals. While the fundamentals and fund flows are not entirely negative (5.64 and 7.3 internal scores, respectively), the technical picture is weak with an internal diagnostic score of 2.9, and analysts are split. The market’s recent rise doesn’t align with bearish technical and analyst trends, creating uncertainty.

Actionable takeaway: Investors should consider waiting for a clearer trend or more alignment between fundamentals and technicals. For now, the bearish technicals and mixed analyst guidance suggest caution.