Stock Analysis | Copart Outlook - Weak Technicals and Mixed Analyst Signals Amid Mixed Fundamentals

Market Snapshot

Headline Takeaway: Copart (CPRT.O) is showing a weak technical outlook with no bullish indicators, but strong fundamental momentum. The stock is currently down by 1.13% amid mixed analyst views.

News Highlights

Recent news impacting Copart and the broader market includes:

• New Zealand property market continued to see declining stock levels for the third month in a row, with new dwellings consented down in June. This could affect global economic sentiment and indirectly impact Copart's operations.
• Global services trade growth slowed to 5% in Q1 2025, though AI-driven computer services showed resilience. This could hint at a sectoral shift in demand, possibly affecting Copart's business if it operates in related areas.
• Royal Caribbean shares declined due to rising costs from a delayed ship launch, highlighting broader economic pressures that might also affect Copart.

Analyst Views & Fundamentals

Copart has received two analyst ratings in the past 20 days, with one "Buy" and one "Neutral" recommendation. The simple average rating score is 3.50, while the performance-weighted rating score is 1.10, indicating a more bearish outlook when historical performance is factored in. The ratings show some dispersion, with analysts like Craig R. Kennison (Baird) and Jeff Lick (Stephens & Co.) having differing views.

The stock's current price trend (-1.13%) is aligned with the performance-weighted ratings, which are more bearish, but not with the simple average (which is neutral). Here's how Copart's fundamentals stack up:

• Shareholders' equity attributable to parent company / Total liabilities: 9.62% (internal diagnostic score: 1 out of 10)
• Net income / Revenue: 1.11% (internal diagnostic score: 3 out of 10)
• Quick ratio: 7.79% (internal diagnostic score: 3 out of 10)
• Basic earnings per share (YoY growth rate): 13.04% (internal diagnostic score: 3 out of 10)
• Diluted earnings per share (YoY growth rate): 13.24% (internal diagnostic score: 3 out of 10)
• Total profit (YoY growth rate): 9.63% (internal diagnostic score: 3 out of 10)
• Net profit attributable to parent company shareholders (YoY growth rate): 13.88% (internal diagnostic score: 3 out of 10)

Money-Flow Trends

Copart has shown mixed money-flow patterns. While the overall trend is positive, with an inflow ratio of 50.74%, the inflow from large and extra-large investors is stronger than from smaller retail investors. Specifically:

• Small investors: 48.68% inflow ratio, with a negative trend
• Medium investors: 47.94% inflow ratio, with a negative trend
• Large investors: 48.99% inflow ratio, with a negative trend
• Extra-large investors: 51.73% inflow ratio, with a positive trend
• Block investors: 51.60% inflow ratio, with a positive trend

This suggests that large institutional investors are more confident in Copart than the average retail trader, giving the stock a fund flow score of 6.76, which is considered "good."

Key Technical Signals

Copart's technical indicators show a weak trend, with no bullish signals and three bearish ones:

• RSI Oversold: Internal diagnostic score: 1 out of 10
• MACD Death Cross: Internal diagnostic score: 1 out of 10
• WR Oversold: Internal diagnostic score: 1 out of 10
• Bearish Engulfing: Internal diagnostic score: 5.61 out of 10
• MACD Golden Cross: Internal diagnostic score: 6.38 out of 10

Recent chart patterns include:

• July 17: RSI Oversold, WR Oversold, and MACD Death Cross
• July 18: WR Oversold
• July 21: WR Oversold and MACD Golden Cross
• July 28: Bearish Engulfing
• July 31: WR Oversold

These signals suggest a weak momentum and rising risk of further price declines, with the key technical score at 3.0 out of 10. The overall trend is described as "weak technicals, suggest to avoid."

Conclusion

Copart is currently showing a mixed outlook. While the fundamentals are strong with rising earnings and cash metrics, the technical indicators are bearish and the analyst ratings are split. Given the weak technical signals and the recent price decline of 1.13%, investors may want to consider waiting for a pull-back before entering a position. Keep an eye on upcoming earnings and any follow-up analyst ratings for a clearer direction.