Sector: Industrials | Focus: Diversified Support Services
HQ: Dallas, Texas
Financial Risks
Copart faces risks from relying on a limited number of major vehicle sellers, potential cancellation of agreements, and difficulty in increasing vehicle supply. International expansion exposes them to currency fluctuations, managing foreign operations, complying with foreign laws, and adapting to different market structures. Cybersecurity threats, fraudulent transactions, and system disruptions are also significant risks. Environmental risks, legal proceedings, and fluctuating vehicle values pose further challenges. Competition, changes in tax laws, and macroeconomic factors like fuel prices and used car values also present risks.
Financial Upside
Copart's revenue growth is driven by increased volume and revenue per car, particularly in the US and internationally. Acquisitions, including Purple Wave, and new facility openings in various regions are expected to increase market share and profitability. The company's online auction platform (VB3) is expected to generate revenue and efficiencies. Cash flows from operations, sales of assets, and stock option exercises are expected to fund working capital and expansion. The company has a credit agreement for additional liquidity.
