What Happened?
Shares of online vehicle auction company Copart (NASDAQ: CPRT) jumped 3% in the afternoon session after HSBC upgraded the stock to Buy from Hold, lifting its price target to $62.00 from $56.00.
The upgrade comes after the stock fell approximately 20% since its third-quarter fiscal 2025 results were released in late May. HSBC analysts noted that while there are market concerns about stalling growth and rising competition, they believe the slower volume growth is likely temporary. The bank highlighted Copart's impressive historical growth and stated that the recent share price decline provides an attractive entry point for a high-quality company with long-term potential. HSBC also pointed to other levers, such as margins and share buybacks, that could drive continued earnings expansion for the online vehicle auction company.
After the initial pop the shares cooled down to $49.70, up 3.3% from previous close.
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What Is The Market Telling Us
Copart’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 11.4% on the news that the company reported weak first quarter 2025 result that missed Wall Street's sales and EBITDA estimates, while earnings were in line. Overall this was a weaker quarter.
Copart is down 11.8% since the beginning of the year, and at $49.70 per share, it is trading 22.2% below its 52-week high of $63.84 from May 2025. Investors who bought $1,000 worth of Copart’s shares 5 years ago would now be looking at an investment worth $1,921.
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