Copart (CPRT) AI Stock Analysis

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Copart

(NASDAQ:CPRT)

Rating:70Outperform

Price Target:

$56.00

▲(12.02%Upside)

Copart's strong financial performance and positive earnings call sentiments are tempered by technical analysis indicating current bearish trends and a high valuation. While the company is well-positioned for long-term growth due to strategic investments and robust revenue increases, the current market sentiment and valuation concerns suggest a cautious outlook in the short term.

Positive Factors

Financial Performance

Global service revenue increased 15% to $991 million, while purchased vehicle sales rose 8.6% to $172 million.

Market Growth

Expectation for the salvage auction market to continue to exhibit above-average growth for at least the next several years.

Technological Leadership

Attraction to Copart’s unique and entrepreneurial corporate culture and belief in its technological leadership in its field.

Negative Factors

Growth Concerns

Concerns around forward growth trajectory and pose downside risk to premium valuation.

Inventory Levels

US inventory units down -11% year-over-year exiting-F3Q25 apply incremental downside pressure on forward unit growth expectations.

Volume Growth

CPRT's US insurance volume growth of -1% year-over-year confirmed concerns around stalling volume growth and modest share losses.

Copart (CPRT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$48.62B

Dividend YieldN/A

Average Volume (3M)6.32M

Price to Earnings (P/E)33.4

Beta (1Y)1.00

Revenue Growth10.21%

EPS Growth5.94%

CountryUS

Employees13,086

SectorIndustrials

Sector Strength90

IndustryAuto - Dealerships

Share Statistics

EPS (TTM)0.42

Shares Outstanding966,936,200

10 Day Avg. Volume8,162,295

30 Day Avg. Volume6,321,663

Financial Highlights & Ratios

PEG Ratio0.72

Price to Book (P/B)10.05

Price to Sales (P/S)0.00

P/FCF Ratio65.69

Enterprise Value/Market Cap0.37

Enterprise Value/Revenue1.02

Enterprise Value/Gross Profit8.85

Enterprise Value/Ebitda2.58

Forecast

1Y Price Target

$62.50

Price Target Upside25.03% Upside

Rating ConsensusHold

Number of Analyst Covering4

Copart Business Overview & Revenue Model

Company DescriptionCopart, Inc. (CPRT) is a global leader in online vehicle auctions and a prominent player in the automotive remarketing industry. The company operates a digital platform that connects sellers and buyers of vehicles, providing services primarily to insurance companies, dealerships, rental car companies, and financial institutions. Copart's core offerings include the sale of salvage and clean title vehicles through its proprietary virtual auction platform, which is accessible to a vast audience of registered buyers worldwide.

How the Company Makes MoneyCopart makes money primarily through the auctioning of vehicles on its online platform. The company's revenue model is based on transaction fees from both sellers and buyers who participate in the auctions. Sellers, such as insurance companies and dealerships, pay listing and service fees to have their vehicles listed for auction on Copart's platform. Buyers, who are typically dismantlers, rebuilders, and used vehicle dealers, pay a buyer's fee upon successfully winning a bid for a vehicle. Additionally, Copart generates income through membership fees, transportation services, and value-added services such as vehicle storage and title processing. Significant partnerships with insurance companies play a key role in ensuring a steady supply of vehicles for auction, which is crucial for the company's continued revenue growth.

Copart Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas are driving growth and where the company might need to adjust its strategy.

Chart InsightsCopart's Services revenue has shown consistent growth, reaching over $1 billion by early 2025, driven by strategic investments and increased total loss frequency. Despite a decline in global inventory, the earnings call highlighted a 9% rise in global service revenue and strong performance in both US and international segments. The acquisition of Hall Ranch for storm readiness and increased ASPs further bolster Copart's long-term growth prospects, although challenges in the heavy equipment auction space and a dip in purchased vehicle sales remain concerns.

Data provided by:

Main Street Data

Copart Earnings Call Summary

Earnings Call Date:May 22, 2025

(Q3-2025)

% Change Since: -17.59%|

Next Earnings Date:Sep 03, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong revenue growth, particularly in the US and international segments, as well as strategic investments to enhance storm preparedness. However, challenges such as decreased global inventory levels, softness in the heavy equipment auction space, and a decline in purchased vehicle sales present notable concerns.

Q3-2025 Updates

Positive Updates

Increase in Global Revenue

Global revenue increased to $1.2 billion, with global service revenue rising over 9% compared to the third quarter of 2024.

US and International Segment Performance

US service revenue grew by 8% while international service revenue grew by about 18%.

Growth in BlueCar and Dealer Sales Volume

BlueCar experienced year-over-year growth of almost 14%, while dealer sales volume grew over 3% year over year.

Increase in Global ASPs

Global ASPs increased by approximately 3% for the quarter compared to the year-ago period.

Significant Liquidity

Copart ended the quarter with over $5.6 billion of liquidity.

Strategic Acquisition for Storm Preparation

Acquisition of Hall Ranch in South Florida provides nearly 400 acres for vehicle storage, enhancing storm readiness.

Negative Updates

Decrease in Global Inventory Levels

Global inventory decreased nearly 10% from the previous year, driven by lower assignments and faster cycle times.

Challenges in Heavy Equipment Auction Space

Softness observed due to uncertainty regarding infrastructure spending and tariffs.

Decline in Global Purchased Vehicle Sales

Global purchased vehicle sales decreased approximately 2%, with gross profit decreasing 60% in the third quarter.

Decrease in US Insurance Unit Volume

US insurance unit volume decreased close to 1% year over year.

Company Guidance

During Copart's third-quarter fiscal 2025 earnings call, CEO Jeff Liaw highlighted several key metrics and strategic initiatives. The company's global insurance volume experienced a nominal decline of 0.3% year-over-year in unit sales, while U.S. insurance units saw a 0.9% decrease. However, accounting for the extra business day in leap year 2024, global insurance and U.S. insurance units sold actually grew by 1.3% and 0.6%, respectively. Total loss frequency in the U.S. increased to 22.8%, up 100 basis points compared to the previous year. Copart's global unit sales increased by 1%, and on a per-business-day basis, the growth was over 2%. The company's revenues also saw substantial growth, with global service revenue rising over 9% from the third quarter of 2024. The call emphasized Copart's ongoing investments in real estate, technology, and operational readiness, including the acquisition of Hall Ranch in South Florida, which offers nearly 400 acres for vehicle storage, anticipating an active storm season. CFO Leah Stearns noted that U.S. insurance ASPs increased over 2%, and international segment insurance ASPs rose approximately 5%. Despite a 10% decline in global inventory, Copart expressed confidence in the long-term growth driven by rising total loss frequency and continued investment in operational efficiency. The company's GAAP net income increased by over 6% to $407 million, or $0.42 per diluted share, with a tax rate of just over 19%.

Copart Financial Statement Overview

Summary

Copart exhibits excellent financial health characterized by strong profitability, a solid balance sheet, and robust cash flows. The company's consistent revenue and profit growth, low leverage, and strong cash generation position it well for sustained performance and growth in the auto dealership industry.

Income Statement

Very Positive

Copart has demonstrated strong revenue growth with a notable increase from $3.5 billion in 2022 to $4.6 billion TTM. Gross and net profit margins are robust, consistently exceeding 30%, indicating high profitability. EBIT and EBITDA margins are also impressive, showing effective cost management. The company has maintained a positive revenue growth trajectory, highlighting its competitive advantage in the industry.

Balance Sheet

Very Positive

The balance sheet is solid with a low debt-to-equity ratio, reflecting prudent financial leverage. High equity ratio indicates a strong asset base funded by equity, reducing financial risk. Return on Equity is strong, driven by high net income. The company has ample cash reserves, enhancing financial stability and flexibility.

Cash Flow

Very Positive

Copart's cash flow is strong with significant free cash flow generation, reflecting efficient operations. Free cash flow to net income ratio is favorable, indicating effective conversion of earnings into cash. Operating cash flow has grown consistently, supporting future growth investments. The company has maintained positive cash flow metrics, demonstrating solid cash management practices.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
4.59B	4.24B	3.87B	3.50B	2.69B	2.21B
	Gross Profit
2.04B	1.91B	1.74B	1.61B	1.34B	1.01B
	EBIT
1.64B	1.57B	1.49B	1.37B	1.14B	816.10M
	EBITDA
1.86B	1.76B	1.49B	1.37B	1.14B	922.46M
	Net Income Common Stockholders
1.48B	1.36B	1.24B	1.09B	936.50M	699.91M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.38B	3.42B	2.36B	1.38B	1.05B	477.72M
	Total Assets
9.67B	8.43B	6.74B	5.31B	4.56B	3.46B
	Total Debt
101.06M	118.73M	120.45M	119.47M	518.07M	518.19M
	Net Debt
-2.27B	-1.40B	-836.94M	-1.26B	-530.19M	40.47M
	Total Liabilities
869.52M	879.21M	750.44M	683.26M	1.03B	965.75M
	Stockholders Equity
8.78B	7.52B	5.99B	4.63B	3.53B	2.49B
Cash Flow		Free Cash Flow
1.18B	961.57M	847.57M	839.24M	527.89M	314.21M
	Operating Cash Flow
1.80B	1.47B	1.36B	1.18B	990.89M	917.88M
	Investing Cash Flow
-582.63M	-940.08M	-1.89B	-442.31M	-465.47M	-601.21M
	Financing Cash Flow
52.56M	19.27M	66.61M	-382.69M	40.92M	-27.41M

Copart Technical Analysis

Technical Analysis Sentiment

Negative

Last Price49.99

Price Trends

50DMA

57.64

Negative

100DMA

56.96

Negative

200DMA

56.23

Negative

Market Momentum

MACD

-2.62

Positive

RSI

23.28

Positive

STOCH

31.97

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPRT, the sentiment is Negative. The current price of 49.99 is below the 20-day moving average (MA) of 54.42, below the 50-day MA of 57.64, and below the 200-day MA of 56.23, indicating a bearish trend. The MACD of -2.62 indicates Positive momentum. The RSI at 23.28 is Positive, neither overbought nor oversold. The STOCH value of 31.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CPRT.

Copart Risk Analysis

Copart disclosed 34 risk factors in its most recent earnings report. Copart reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Copart Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LAD	80 Outperform	$8.77B	10.61	12.95%	0.65%	12.96%	-6.25%
SAH	72 Outperform	$2.58B	10.84	24.52%	1.83%	1.59%	43.91%
KAR	71 Outperform	$2.59B	40.18	5.46%	―	9.42%	―
CPRT	70 Outperform	$48.62B	33.38	18.54%	―	10.21%	5.94%
ACVA	69 Neutral	$2.89B	―	-16.49%	―	32.89%	7.44%
Sector *	66 Neutral	$4.52B	12.34	5.41%	3.62%	4.15%	-12.18%
KMX	62 Neutral	$10.43B	21.17	8.13%	―	-0.69%	6.27%

* Industrials Sector Average

Performance Comparison

CPRT

Copart

49.99

-3.22

-6.05%

KMX

CarMax

66.11

-3.80

-5.44%

KAR

OPENLANE

23.44

7.16

43.98%

LAD

Lithia Motors

329.04

79.00

31.59%

SAH

Sonic Automotive

76.81

21.55

39.00%

ACVA

ACV Auctions

16.42

-1.27

-7.18%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.