CPRT
CPRTCopart Inc is a leading online vehicle auction company operating in the automotive services industry.
It has established a dominant global position by pioneering a streamlined digital marketplace for salvaged and used vehicles.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy CPRT Today?
Technical Analysis
CPRT shows signs of being oversold after a significant 40% drawdown from its highs. While it trades near 52-week lows, the recent 3% monthly gain hints at a potential stabilization attempt. However, the stock has consistently underperformed the market, reflecting lingering weakness that requires confirmation of a sustained rebound.
Fundamentals
The company displays strong underlying fundamentals, with steady revenue growth and exceptional profitability, including a 35% net income margin. CPRT’s balance sheet is robust, featuring minimal debt and strong liquidity, while operational efficiency remains solid with high inventory turnover and healthy cash flow.
Valuation
Valuation metrics suggest CPRT is richly priced, with elevated PE, PB, and notably high EV/EBITDA ratios. Investors appear to be pricing in substantial future growth, which may not be fully aligned with current performance, posing a risk if growth moderates.
Risk
CPRT carries moderate volatility risk, as reflected in its beta and significant past drawdown. Despite low short interest, the stock remains sensitive to market fluctuations and company-specific developments, requiring careful risk assessment.
Investment Recommendation
CPRT presents a compelling case for cautious optimism due to its strong fundamentals and oversold technical position, which could offer a favorable entry point. However, the elevated valuation necessitates confidence in the company’s ability to sustain high growth. For investors with a moderate risk tolerance and a long-term horizon, CPRT may be worth considering as a quality business trading at a discounted price from recent highs.
CPRT 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Based on the provided analysis, here is a 12-month outlook for Copart (CPRT):
12-Month Outlook for CPRT
The primary catalyst for CPRT over the next year will be a potential rebound from its deeply oversold condition, leveraging its exceptionally strong profitability and robust balance sheet to demonstrate operational resilience. Key risks include its rich valuation, which leaves the stock vulnerable if quarterly results fail to meet the high growth expectations embedded in its price, alongside broader market volatility. Given the absence of a specific analyst target, a reasonable target range could be in the low-to-mid $40s, representing a 10-15% appreciation from the current price as the market rewards a return to steady execution.
Wall Street Consensus
Most Wall Street analysts are optimistic about CPRT's 12-month outlook, with consensus target around $39.99, indicating expected upside potential.
Bulls vs Bears: CPRT Investment Factors
Overall, CPRT has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Strong Fundamentals: Company maintains solid fundamentals despite recent stock price declines.
- High-Margin Business Model: Online auction platform built for steady, durable growth.
- Attractive Valuation: Stock currently trading at lower than average valuation levels.
- Recent Revenue Growth: Q3 fiscal 2025 revenue grew 7.5% to $1.2 billion.
Bearish
- Recent Price Weakness: Stock down 30% over past six months, underperforming market.
- Market Enthusiasm Cooling: Investor sentiment has weakened despite company fundamentals.
- Volatile Trading Pattern: Shares showing significant price swings in recent sessions.
- Extended Underperformance: Stock has declined 14% over past three months.
CPRT Technical Analysis
CPRT has experienced significant weakness over the past year, characterized by a substantial drawdown from its highs. The stock currently trades near the lower end of its 52-week range, reflecting persistent downward pressure.
Over the short term, CPRT shows mixed signals with a modest 1-month gain of 3.05% but a more pronounced 3-month decline of 9.47%. The stock has significantly underperformed the market by 12.84% over this three-month period, indicating relative weakness despite its recent monthly stabilization attempt.
Currently trading at $39.87, CPRT sits just 6.6% above its 52-week low of $37.41 and approximately 38% below its yearly high. Given its proximity to recent lows and the substantial maximum drawdown of -40.84%, the stock appears to be in an oversold condition relative to its annual trading range.
| Period | CPRT Return | S&P 500 |
|---|---|---|
| 1m | +3.4% | +1.3% |
| 3m | -8.9% | +5.7% |
| 6m | -16.1% | +10.6% |
| 1y | -29.1% | +16.5% |
| ytd | +5.9% | +1.1% |
CPRT Fundamental Analysis
Revenue & Profitability: CPRT demonstrates steady revenue growth, with Q1 2026 revenue increasing to $1.16 billion from $1.13 billion in the previous quarter. This top-line expansion is supported by strong profitability, evidenced by a gross profit margin rising to 46.5% and a robust net income margin of 35.0% in the most recent quarter. The company's earnings power remains exceptional, with significant operating leverage translating revenue growth efficiently to the bottom line.
Financial Health: The company exhibits an exceptionally strong balance sheet, characterized by a minimal debt-to-equity ratio of just 0.01 and substantial liquidity with current and quick ratios above 7.8. This financial conservatism is complemented by strong cash generation, as reflected in an operating cash flow to sales ratio of 46.3% and a negative cash conversion cycle that indicates efficient working capital management.
Operational Efficiency: CPRT maintains solid operational returns, with a return on equity of 4.2% and return on capital employed of 4.4%. The company demonstrates efficient asset utilization through high inventory turnover of 15.3x and maintains healthy cash flow generation relative to operations. These metrics highlight CPRT's effective deployment of capital and operational execution.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Try Now & Get Tesla Stock RewardValuation Analysis: Is CPRT Overvalued?
Valuation metrics indicate CPRT may be overvalued based on traditional measures. The PE ratios around 24-26 appear elevated compared to typical market valuations, while the PB ratio of 4.03 and PS ratio of 8.3 suggest premium pricing relative to assets and sales. Most notably, the exceptionally high EV/EBITDA of 76.3 and PEG ratio exceeding 10 indicate investors are paying a substantial premium for both current earnings and expected growth.
Without specific industry comparison data, CPRT's valuation appears stretched based on absolute measures. The company's multiples exceed broad market averages, suggesting investors are pricing in significant growth expectations that may not be fully supported by current metrics. This elevated valuation level requires strong fundamental performance to justify current price levels.
Investment Risk Disclosure
Volatility Risk: CPRT's beta of 1.103 indicates it is slightly more volatile than the broader market, suggesting it may experience amplified movements in both directions. This is corroborated by the significant one-year maximum drawdown of -40.84%, highlighting a substantial period of peak-to-trough loss and considerable price fluctuation risk for investors.
Other Risks: The absence of notable short interest suggests the market does not currently harbor significant speculative bets against the stock's decline. However, investors should still consider other factors such as potential idiosyncratic business risks or liquidity conditions, as these can still pose challenges independent of short-selling activity.
FAQs
Based on the analysis, I would maintain a neutral stance on CPRT despite its pullback. While the stock appears oversold technically and boasts strong fundamentals with high margins and a healthy balance sheet, its valuation multiples remain elevated relative to market averages. This stock is best suited for patient, long-term investors who believe in the company's durable business model and are willing to wait for growth to justify the current price.
CPRT appears overvalued based on key valuation metrics compared to general market standards. Its P/E ratio of 24.3, P/B ratio of 4.0, and P/S ratio of 8.3 all sit at premium levels, while its PEG ratio above 10 indicates investors are paying heavily for growth expectations. Although CPRT enjoys strong profitability (35% net margin) and a rock-solid balance sheet, current multiples suggest the market has already priced in substantial future performance, leaving limited room for upside.
Based on the provided information about CPRT, here are the key risks of holding its stock, ordered by importance:
1. Market Volatility Risk: As evidenced by the stock's substantial -40.84% maximum drawdown and its trading near 52-week lows, CPRT is susceptible to significant price fluctuations, amplified by its beta slightly above the market average (1.103), potentially leading to sharp declines during market downturns. 2. Business Execution Risk: Despite strong current profitability, the stock's significant underperformance (-12.84% over three months) relative to the market suggests risk that future operational results may fail to meet elevated investor expectations, leading to further price pressure. 3. Industry/Cyclical Risk: Operating in a sector correlated with economic activity, an economic slowdown could reduce the volume of vehicles processed, directly impacting CPRT's revenue and high profit margins, which are central to its valuation. 4. Liquidity and Sentiment Risk: The stock's persistent downward technical pressure and proximity to its 52-week low indicate a potential risk of continued negative momentum or a loss of investor confidence that could be disproportionate to changes in fundamental performance.
Based on the provided fundamental analysis, here is a strategic forecast for CPRT stock through 2026.
2026 Forecast for CPRT
Our base case target price range for 2026 is $45-55, representing steady, mid-single-digit annualized growth driven by the company's expanding revenue, exceptional profitability, and operational efficiency. A bull case could push towards $60+, contingent on accelerated market share gains and successful execution of new growth initiatives. Key growth drivers include: (1) consistent top-line expansion from a resilient business model, (2) industry-leading margins providing significant earnings power, and (3) a fortress balance sheet enabling strategic investments or acquisitions.
Core assumptions are that CPRT maintains its premium valuation by continuing its impressive margin profile and that the vehicle salvage market remains stable. This forecast carries significant uncertainty, primarily tied to whether future earnings can justify the stock's current rich valuation and the potential for broader economic pressures to impact vehicle volumes.