Analyst Note
| David Whiston |Copart’s fourth-quarter fiscal 2023 results gave us no reason to change our investment thesis or fair value estimate, but we will reassess all valuation inputs when we roll our model forward for the soon-to-be filed 10-K. We consider Copart an outstanding-quality business and its wide moat helps the firm consistently generate share gains and profit growth. Fourth-quarter adjusted diluted EPS grew 21.4% year over year to $0.34 beating the $0.32 Refinitiv consensus. A nearly 10% increase in global unit volume (about 8% United States and 22% internationally) helped drive revenue up 12.9% to $997.6 million which also beat the Refinitiv consensus of $962.9 million. Foreign currency was a $6 million tailwind for the quarter. This growth, along with declines in some costs such as transportation due to falling diesel prices, enabled strong operating leverage with operating income up 20.3% and operating margin growing by 240 basis points to 39.2%.