Stock Analysis | Copart Outlook - Weak Technicals and Mixed Analyst Sentiment

1. Market Snapshot

Copart (CPRT.O) is showing weak technical signals and mixed analyst sentiment, with a price drop of 0.80% recently. The stock is currently in a bearish trend with more bearish indicators than bullish ones.

2. News Highlights

• May 29: Fuel Ethanol Market Report Released – A new market report highlights opportunities in the ethanol-to-SAF (sustainable aviation fuel) industry through 2034. While this may benefit the energy sector, the impact on Copart appears minimal.
• May 31: Gaza Aid Supplies Looting – Several reports highlight the looting of medical supplies in Gaza, which could affect global humanitarian aid. This geopolitical issue has no direct impact on Copart but adds to global instability and investor caution.
• May 31: ETF Growth in Asia-Pacific – ETF assets in Asia-Pacific (excluding Japan) hit a record $1.25 trillion. This could reflect broader investor optimism in markets outside the US, though Copart's performance remains under pressure.

3. Analyst Views & Fundamentals

Recent analyst activity for Copart shows a mixed consensus, with two separate ratings: "Strong Buy" and "Neutral." The simple average rating is 4.00, but the performance-weighted rating is 0.00 due to the poor historical performance of the involved analysts.

Despite the mixed analyst views, the fundamental outlook is strong. Our model highlights the following key metrics and scores:

• Return on Equity (ROE): 4.64% – internal diagnostic score (0-10): 3.00
• Return on Assets (ROA): 4.21% – internal diagnostic score (0-10): 3.00
• Net Profit Margin: 32.37% – internal diagnostic score (0-10): 3.00
• Net Income to Revenue: 1.12% – internal diagnostic score (0-10): 3.00
• Profit-MV: 1.39 – internal diagnostic score (0-10): 3.00
• Annualized Net Profit Margin on Total Assets: 16.98% – internal diagnostic score (0-10): 3.00
• ROE (Diluted): 9.03% – internal diagnostic score (0-10): 3.00
• Long-Term Debt to Working Capital Ratio: 5.39% – internal diagnostic score (0-10): 2.00

The fundamental scores suggest Copart is efficiently managing its capital and generating strong margins, but the technical and analyst signals caution against near-term optimism.

4. Money-Flow Trends

Despite the weak price action, money-flow patterns are relatively positive. Large and extra-large institutional flows are trending in a positive direction, while small and medium flows are negative. The overall inflow ratio is 50.14%, indicating that more capital is flowing in than out. The block inflow ratio is 50.30%, suggesting some institutional interest in the stock.

While the overall money flow is positive, the fund-flow score is 7.63 (good), which contrasts with the bearish technical outlook.

5. Key Technical Signals

Our internal technical analysis for Copart shows a very weak chart pattern with more bearish signals than bullish ones. Here's a breakdown of key indicators:

• Williams %R Overbought – internal diagnostic score (0-10): 1.88 (Neutral bias, but historically associated with an average return of -0.22%)
• Earnings Release Date – internal diagnostic score (0-10): 1.00 (Biased bearish, with an average return of -1.34%)
• Shooting Star – internal diagnostic score (0-10): 4.06 (Neutral rise, with an average return of 0.25%)

Recent chart patterns include multiple instances of Williams %R Overbought signals on August 22, 28, and September 4, 2025, and a Shooting Star on August 20. The most recent strong bearish signal is from the Earnings Release Date on September 4.

Overall, the technical trend is bearish, with 2 bearish indicators vs. 0 bullish. This suggests a high risk of further decline in the near term.

6. Conclusion

Copart’s fundamentals remain strong, with high profit margins and solid returns on equity, but the technical and analyst signals suggest caution. Given the weak technical indicators and the recent bearish earnings date signal, we recommend avoiding Copart for now. Investors should watch the upcoming earnings closely for signs of a potential reversal or confirmation of the bearish trend.