Copart (NASDAQ:CPRT) and Liquidity Services (NASDAQ:LQDT) Critical Review

Liquidity Services (NASDAQ:LQDT) and Copart (NASDAQ:CPRT) are both business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Profitability

This table compares Liquidity Services and Copart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Liquidity Services	6.31%	20.89%	11.33%
Copart	32.21%	18.20%	16.36%

Institutional & Insider Ownership

71.2% of Liquidity Services shares are held by institutional investors. Comparatively, 85.8% of Copart shares are held by institutional investors. 28.4% of Liquidity Services shares are held by company insiders. Comparatively, 9.7% of Copart shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Liquidity Services and Copart”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Liquidity Services	$363.32 million	2.08	$19.99 million	$0.79	30.69
Copart	$4.24 billion	11.25	$1.36 billion	$1.52	32.42

Copart has higher revenue and earnings than Liquidity Services. Liquidity Services is trading at a lower price-to-earnings ratio than Copart, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Liquidity Services has a beta of 1.14, meaning that its stock price is 14% more volatile than the S&P 500. Comparatively, Copart has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Liquidity Services and Copart, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Liquidity Services	0	0	2	0	3.00
Copart	0	2	1	0	2.33

Liquidity Services currently has a consensus target price of $38.50, indicating a potential upside of 58.80%. Copart has a consensus target price of $55.50, indicating a potential upside of 12.61%. Given Liquidity Services’ stronger consensus rating and higher probable upside, research analysts plainly believe Liquidity Services is more favorable than Copart.

Summary

Copart beats Liquidity Services on 8 of the 14 factors compared between the two stocks.

About Liquidity Services

Liquidity Services, Inc. provides e-commerce marketplaces, self-directed auction listing tools, and value-added services in the United States and internationally. The company operates through four segments: GovDeals, Retail Supply Chain Group (RSCG), Capital Assets Group (CAG), and Machinio. Its marketplaces include liquidation.com that enable corporations to sell surplus and salvage consumer goods and retail capital assets; GovDeals marketplace, which provides self-directed service solutions in which sellers list their own assets that enables local and state government entities, and commercial businesses located in the United States and Canada to sell surplus and salvage assets; and AllSurplus, a centralized marketplace that connects global buyer base with assets from across the network of marketplaces in a single destination. The company also offers a suite of services, including surplus management, asset valuation, asset sales, marketing, returns management, asset recovery, and ecommerce services. In addition, it operates a global search engine platform for listing used equipment for sale in the construction, machine tool, transportation, printing, and agriculture sectors. The company offers products from industry verticals, such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, real estate, energy equipment, industrial capital assets, heavy equipment, fleet and transportation equipment, and specialty equipment. The company was incorporated in 1999 and is headquartered in Bethesda, Maryland.

About Copart

Copart, Inc. provides online auctions and vehicle remarketing services. It offers a range of services for processing and selling vehicles over the Internet through its Virtual Bidding Third Generation Internet auction-style sales technology on behalf of vehicle sellers, insurance companies, banks and finance companies, charities, and fleet operators and dealers, as well as individual owners. The company’s services include online seller access, salvage estimation, estimating, end-of-life vehicle processing, virtual insured exchange, transportation, vehicle inspection stations, on-demand reporting, motor vehicle regulatory agency processing, flexible vehicle processing programs, buy it now, member network, sales process, and dealer services. Its services also include buying vehicles through CashForCars.com and Copart Direct. The company sells its products principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, and exporters, as well as to the general public. It operates in the United States, Canada, the United Kingdom, Brazil, the Republic of Ireland, Germany, Finland, the United Arab Emirates, Oman, Bahrain, and Spain. Copart, Inc. was founded in 1982 and is headquartered in Dallas, Texas.