Copart (CPRT) versus America’s Car-Mart (CRMT) Critical Review
Copart (NASDAQ: CPRT) and America’s Car-Mart (NASDAQ:CRMT) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitabiliy, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.
Volatility and Risk
Copart has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, America’s Car-Mart has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for Copart and America’s Car-Mart, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Copart currently has a consensus target price of $52.50, indicating a potential upside of 67.14%. America’s Car-Mart has a consensus target price of $41.00, indicating a potential upside of 7.47%. Given Copart’s higher probable upside, analysts clearly believe Copart is more favorable than America’s Car-Mart.
Institutional and Insider Ownership
40.2% of Copart shares are held by institutional investors. Comparatively, 83.9% of America’s Car-Mart shares are held by institutional investors. 17.0% of Copart shares are held by company insiders. Comparatively, 11.7% of America’s Car-Mart shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Copart and America’s Car-Mart’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Copart||$1.40 billion||5.17||$504.25 million||$1.72||18.26|
|America’s Car-Mart||$587.75 million||0.49||$41.79 million||$2.50||15.26|
Copart has higher revenue and earnings than America’s Car-Mart. America’s Car-Mart is trading at a lower price-to-earnings ratio than Copart, indicating that it is currently the more affordable of the two stocks.
This table compares Copart and America’s Car-Mart’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Copart beats America’s Car-Mart on 10 of the 13 factors compared between the two stocks.
Copart, Inc. (Copart) is a provider of online auctions and vehicle remarketing services in the United States, Canada, the United Kingdom, the United Arab Emirates, Oman, Bahrain, Brazil, Ireland, Spain and India. The Company also provides vehicle remarketing services in Germany. The Company operates through two segments: United States and International. The Company provides vehicle sellers with a range of services to process and sell vehicles primarily over the Internet through its virtual bidding third generation Internet auction-style sales technology (VB3). The Company’s service offerings include Online Seller Access, Salvage Estimation Services, Estimating Services, End-Of-Life Vehicle Processing, Virtual Insured Exchange (VIX), Transportation Services, Vehicle Inspection Stations, On-Demand Reporting, Department of Motor Vehicle (DMV) Processing, Flexible Vehicle Processing Programs, Buy It Now, Member Network, Sales Process, Copart Dealer Services, CashForCars.com and U-Pull-It.
About America’s Car-Mart
America’s Car-Mart, Inc. is an automotive retailer focused on the integrated auto sales and finance segment of the used car market. The Company conducts its operations through its two operating subsidiaries, America’s Car Mart, Inc. (Car-Mart of Arkansas) and Colonial Auto Finance, Inc. (Colonial) (Collectively, Car-Mart of Arkansas and Colonial are referred to as Car-Mart). It primarily sells older model used vehicles and provides financing for all of its customers. As of April 30, 2016, the Company operated 143 dealerships located primarily in small cities throughout the South-Central United States. Dealerships are operated on a decentralized basis. Each dealership is responsible for buying (with the assistance of a corporate office buyer) and selling vehicles, making credit decisions, and servicing and collecting the installment contracts it originates. Dealerships also maintain their own records and make daily deposits. The Company has both regular and satellite dealerships.
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