Junked-car salvager Copart (CPRT 4.39%) stock fell 4.5% through 11:30 a.m. ET Friday after missing earnings last night.
Heading into its fiscal Q2 2026 report, analysts forecast Copart to earn $0.39 per share on $1.15 billion in sales. In fact, Copart earned just $0.36 per share on sales of $1.12 billion.
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Copart Q2 earnings
Copart revenues slipped 4% year over year in Q2, resulting in a 10% decline in per-share profit, worsening a decline that began in Q1. Year to date, Copart's sales are down 1%, and earnings are flat against fiscal 2025 at $0.77 per share.
That's the bad news.
The good news is that Copart's free cash flow is up significantly this year. Although operating cash flow was basically unchanged year over year at $662.8 million, Copart cut its purchases of property and equipment nearly in half, to just $177.7 million. As a result, free cash flow so far this year is a strong $485.1 million -- and trending toward perhaps $970 million through the end of the fiscal year!
NASDAQ: CPRT
Key Data Points
Is Copart stock a buy?
Copart management didn't give much in the way of guidance, but assuming Copart can hit that mark, the stock would be trading for a price-to-free cash flow ratio of 37.4. Back out $5.1 billion in net cash on the balance sheet, and the EV/FCF ratio on this one falls to just 32.1.
I can't call the stock a "buy" at this valuation -- not with profits flat and revenues falling. But there's no doubt Copart stock is getting cheaper, and it's already a lot cheaper than it was a year ago.
