Copart
CPRT
$28.29
+3.70%
Copart Inc. operates a global online salvage vehicle auction platform, connecting vehicle sellers—primarily auto insurance companies—with over 750,000 registered buyers across 11 countries. As the dominant player in the salvage vehicle auction market, Copart leverages its proprietary VB3 bidding platform to facilitate over 4 million transactions annually, giving it a strong competitive moat in the specialty business services industry. The current investor narrative centers on growth deceleration, as recent quarterly results showed only 2.1% YoY revenue growth, raising questions about volume trends and pricing power. Additionally, the stock has been under pressure due to macro headwinds and a Supreme Court ruling on tariffs that could impact vehicle supply dynamics.…
CPRT
Copart
$28.29
Related headlines
CPRT 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Copart's 12-month outlook, with a consensus price target around $40.90 and implied upside of +44.6% versus the current price.
Average Target
$40.90
0 analysts
Implied Upside
+44.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$32 - $55
Analyst target range
Copart is covered by 10 analysts, with a consensus recommendation of 'Buy' (mean score of 2.15 on a 1-5 scale where 1 is Strong Buy). The average price target is $40.90, implying 50% upside from the current price of $27.28. The distribution shows 1 Underweight (Barclays), 2 Neutral (JP Morgan, Stephens), and 7 Buy/Outperform ratings, indicating a predominantly bullish sentiment despite the recent price decline. The target range spans from a low of $32.00 to a high of $55.00, representing a wide spread of 72% from low to high, signaling high uncertainty about the company's future. The low target of $32.00 implies 17% upside and likely assumes continued growth deceleration and margin pressure, while the high target of $55.00 (102% upside) reflects expectations of a growth reacceleration and multiple expansion. Recent analyst actions show no changes in ratings over the past few months, with JP Morgan maintaining Neutral, Barclays Underweight, and Baird Outperform, suggesting a lack of near-term catalysts to shift consensus.
Bulls vs Bears: CPRT Investment Factors
Copart presents a classic value-versus-momentum tension. On the bull side, the company boasts a dominant market position, fortress balance sheet, high profitability, and a forward P/E at a discount to peers, with analysts seeing 50% upside. On the bear side, revenue growth has decelerated sharply to 2.1%, the stock is in a sustained downtrend near its 52-week low, and the trailing P/E remains elevated relative to history. The single most important factor is whether revenue growth can reaccelerate—if it does, the stock could rerate higher; if it continues to decelerate, further downside is likely. Currently, the bearish momentum is stronger, but the valuation and balance sheet provide a floor.
Bullish
- Dominant market position with high margins: Copart's 32.5% net margin and 46.3% gross margin reflect its strong competitive moat in salvage auctions. The company processes over 4 million transactions annually with 750,000+ registered buyers, creating a network effect that is difficult to replicate.
- Fortress balance sheet with zero debt: Copart has a debt-to-equity ratio of 0.011 and a current ratio of 8.25, indicating virtually no leverage and ample liquidity. The company generated $1.34 billion in free cash flow over the trailing twelve months, providing a 3.1% FCF yield at the current price.
- Significant upside to analyst targets: The average analyst price target is $40.90, implying 50% upside from the current price of $27.28. Even the low target of $32.00 suggests 17% upside, indicating that analysts see material value despite recent headwinds.
- Forward P/E at a discount to industry: Copart's forward P/E of 16.2x is at a 26% discount to the specialty business services industry average of approximately 22x. If earnings materialize as expected, the stock could be undervalued relative to peers.
Bearish
- Sharp revenue growth deceleration: Revenue growth slowed to just 2.1% YoY in Q3 FY2026, down from 6.1% in the prior-year quarter. This deceleration raises concerns about volume trends and pricing power in a softening used-car market.
- Stock in sustained downtrend, near 52-week low: The stock has declined 40.6% over the past year and is trading at $27.28, just 0.2% above its 52-week low of $27.23. Technical momentum remains negative, with no reversal signals evident.
- High trailing P/E relative to history: The trailing P/E of 28.2x is above the five-year average midpoint and represents a 28% premium to the industry average of 22x. This leaves limited room for error if growth continues to disappoint.
- Uncertainty from Supreme Court tariff ruling: A recent Supreme Court ruling on tariffs could impact vehicle supply dynamics, potentially reducing the volume of salvage vehicles available. This adds regulatory risk to an already slowing growth narrative.
CPRT Technical Analysis
Copart is in a sustained downtrend, with the stock price declining 40.6% over the past year. The current price of $27.28 sits at just 0.2% above its 52-week low of $27.23 and 54.4% below the 52-week high of $50.11, indicating extreme bearish sentiment and positioning near the bottom of its range. This proximity to the low suggests either a potential value opportunity or a falling knife, depending on whether fundamentals stabilize. Short-term momentum remains negative, with a 1-month price change of -10.0% and a 3-month change of -18.0%, both accelerating to the downside. The 1-month relative strength versus the S&P 500 is -10.6%, confirming that the stock is underperforming the broader market. This divergence from the longer-term downtrend suggests no reversal signal yet, and the stock continues to make lower lows. The 52-week low at $27.23 provides immediate support, while the 52-week high at $50.11 is a distant resistance level. A breakdown below $27.23 could trigger further selling, while a move above the 50-day moving average (not provided) would be needed to suggest a trend change. The stock's beta of 1.023 indicates volatility roughly in line with the market, so the decline is not amplified by leverage but rather reflects company-specific weakness.
Beta
1.02
1.02x market volatility
Max Drawdown
-46.0%
Largest decline past year
52-Week Range
$27-$50
Price range past year
Annual Return
-38.5%
Cumulative gain past year
| Period | CPRT Return | S&P 500 |
|---|---|---|
| 1m | -8.0% | +0.1% |
| 3m | -15.4% | +5.7% |
| 6m | -31.1% | +8.5% |
| 1y | -38.5% | +20.3% |
| ytd | -25.1% | +10.1% |
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CPRT Fundamental Analysis
Revenue growth has decelerated sharply, with the most recent quarter (Q3 FY2026, ended April 30, 2026) reporting revenue of $1.237 billion, up only 2.1% YoY compared to 6.1% growth in the prior-year quarter. Over the trailing four quarters, revenue has averaged ~$1.16 billion, with sequential growth flattening. The service segment generated $1.056 billion (85% of total revenue), while product revenue was $181 million, indicating that the core auction fee business is the primary driver but is losing momentum. This deceleration raises concerns about volume growth and average selling prices in a softening used-car market. Copart remains highly profitable, with a net income of $402 million in Q3 FY2026, representing a net margin of 32.5%. Gross margin improved to 46.3% from 45.6% a year ago, while operating margin expanded to 37.5% from 37.3%, reflecting cost discipline. The company has maintained strong profitability despite revenue headwinds, with trailing twelve-month net income of $1.55 billion and a return on equity of 16.9%. The balance sheet is fortress-like, with a debt-to-equity ratio of just 0.011 and a current ratio of 8.25, indicating ample liquidity. Free cash flow for the trailing twelve months was $1.34 billion, yielding a robust FCF yield of 3.1% at the current market cap. The company has no interest expense and generates significant cash from operations ($584 million in Q3 alone), allowing it to self-fund growth and return capital to shareholders via buybacks.
Quarterly Revenue
$1.2B
2026-04
Revenue YoY Growth
+2.1%
YoY Comparison
Gross Margin
46.3%
Latest Quarter
Free Cash Flow
$1.3B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CPRT Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E stands at 28.2x, while the forward P/E is 16.2x, implying the market expects earnings to grow significantly—the forward EPS estimate of $2.19 represents a 54% increase over trailing EPS of $1.42. This wide gap suggests optimistic growth expectations baked into the forward multiple. Compared to the specialty business services industry average P/E of approximately 22x (estimated), Copart's trailing P/E of 28.2x represents a 28% premium, reflecting its dominant market position and high margins. However, the forward P/E of 16.2x is at a 26% discount to the industry forward average, indicating that if earnings materialize as expected, the stock could be undervalued. Historically, Copart's trailing P/E has ranged from 19x to 36x over the past five years, with the current 28.2x near the midpoint. The stock's P/S ratio of 9.4x is below its five-year average of ~35x, suggesting that on a sales basis, the stock is at a historically low multiple, which could indicate a value opportunity if revenue growth reaccelerates.
PE
28.2x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 19x~38x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
19.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Copart's revenue growth deceleration to 2.1% YoY is the primary financial risk, as it suggests potential volume or pricing weakness. The company's high net margin of 32.5% leaves little room for margin compression if competition intensifies or costs rise. Although the balance sheet is strong with zero debt, the reliance on insurance companies for 80% of vehicle volume creates concentration risk—any shift in insurer behavior could materially impact revenue. The wide gap between trailing P/E of 28.2x and forward P/E of 16.2x implies the market expects significant earnings growth, which may not materialize if revenue trends worsen.
Market & Competitive Risks: The stock's beta of 1.023 indicates market-like volatility, but its 40.6% decline over the past year shows company-specific weakness. Valuation compression risk is high given the trailing P/E premium to peers; if growth disappoints, the multiple could contract further. The Supreme Court tariff ruling adds regulatory uncertainty that could disrupt vehicle supply. Additionally, the used-car market softening could reduce average selling prices and transaction volumes. The stock's underperformance relative to the S&P 500 (relative strength -61.5% over 1 year) suggests negative sentiment may persist.
Worst-Case Scenario: If revenue growth turns negative due to a sharp decline in salvage vehicle supply or a recession reducing insurance claims, earnings could miss expectations. The stock could fall to its 52-week low of $27.23 or below, representing a potential loss of 0.2% from current levels, but a break below that support could lead to further declines toward $20, implying a -27% loss. Historically, the stock has a max drawdown of -45.98%, so a drop to $14.73 is possible in a severe downturn.