Why Copart's Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of online car auction company Copart fell as much as 10.6% today after the company released earnings.

So what: Revenues rose 16.4% to $263.7 million in the quarter, which came in slightly ahead of estimates. What investors are focusing on today is the 8.6% drop in earnings per share to $0.32, which was $0.08 behind estimates.  

Now what: Earnings fell slightly for the full year, which isn't good for a company trading at 22 times trailing earnings. Also keep in mind that $11.2 million of the revenue growth this quarter was due to the QCSA acquisition, which has pulled down organic growth. I'd like to see far more income growth before bidding on Copart, especially considering the price the stock is going for.

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The article Why Copart's Shares Dropped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool recommends Copart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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