Copart (CPRT) AI Stock Analysis

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Copart

(NASDAQ:CPRT)

Rating:76Outperform

Price Target:

$54.00

▲(11.02% Upside)

Copart's strong financial performance and strategic growth initiatives are the primary drivers of its stock score. While technical indicators suggest mixed momentum, and valuation metrics indicate potential overvaluation, the company's robust cash flow and strategic investments support a positive outlook. Challenges in the US insurance segment and increased operational costs are noted but are offset by international growth and strategic preparedness.

Positive Factors

Earnings performance

EPS of $0.40 increased 21% from $0.33 for the comparable period of FY/24.

Revenue growth

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

Technological advancements

Proactive levers driving CPRT’s growth include in-house AI-enabled image recognition tools, empowering insurance companies to total cars more accurately and effectively.

Negative Factors

Competitive and macro uncertainty

The current setup of high valuation, slowing profit growth, and higher competitive/macro uncertainty presents a more challenging backdrop.

Insurance unit performance

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

Inventory levels

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

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

Market Cap

$47.04B

Dividend YieldN/A

Average Volume (3M)6.49M

Price to Earnings (P/E)32.2

Beta (1Y)1.00

Revenue Growth10.21%

EPS Growth5.94%

CountryUS

Employees13,086

SectorIndustrials

Sector Strength76

IndustryAuto - Dealerships

Share Statistics

EPS (TTM)0.42

Shares Outstanding966,936,200

10 Day Avg. Volume5,558,931

30 Day Avg. Volume6,493,927

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.18

Enterprise Value/Revenue12.07

Enterprise Value/Gross Profit27.01

Enterprise Value/Ebitda29.83

Forecast

1Y Price Target

$52.50

Price Target Upside7.94% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Copart Business Overview & Revenue Model

Company DescriptionCopart, Inc. (CPRT) is a global leader in online vehicle auctions, specializing in the remarketing of vehicles for a diverse range of clients including insurance companies, rental car companies, and dealerships. Founded in 1982 and headquartered in Dallas, Texas, Copart operates in the automotive sector, offering a platform that enables buyers to bid on vehicles ranging from salvage and damaged cars to clean title vehicles. The company provides services that facilitate the buying and selling of vehicles through its extensive online auction platform, which is accessible to both individual buyers and commercial clients.

How the Company Makes MoneyCopart generates revenue primarily through its auction services, charging fees to both sellers and buyers involved in the auction process. Key revenue streams include seller fees, which are charged to vehicle sellers based on the final sale price of the vehicles, and buyer fees, which are charged to winning bidders. Additionally, Copart earns revenue from services related to vehicle transportation, storage, and title processing. The company has established significant partnerships with insurance companies and fleet operators, enhancing its inventory of vehicles and providing a steady stream of auction opportunities. Furthermore, Copart's focus on technology and digital sales has positioned it favorably in the market, contributing to its consistent financial performance.

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: |

Next Earnings Date:Sep 04, 2025

Earnings Call Sentiment Neutral

The earnings call presented a balanced outlook with strong international growth and strategic investments in storm preparedness and non-insurance segments. However, challenges in the US insurance unit volume, decreased global inventory, and increased facility costs indicate areas of concern.

Q3-2025 Updates

Positive Updates

Stable Insurance Volume and Rising Total Loss Frequency

Global insurance volume remained relatively flat with a nominal decline of 0.3% globally in unit sales. Total loss frequency in the US reached 22.8%, up 100 basis points from last year, indicating resilience in the insurance segment.

Strategic Investment in Storm Preparedness

Acquisition of Hall Ranch in South Florida for vehicle storage, expanding capacity to handle large storms, demonstrating proactive investment in operational readiness.

Growth in Non-Insurance Segments

BlueCar services saw a year-over-year growth of almost 14%, and dealer sales volume including National Power Sport auctions grew over 3% year over year.

International Segment Performance

International unit sales grew by 6%, with fee units increasing 9%. International service revenue grew by about 18%.

Positive Financial Metrics

Global revenue increased to $1.2 billion. Global service revenue increased by over 9%, and third quarter GAAP net income increased by over 6% to $407 million.

Negative Updates

US Insurance Unit Volume Decline

US insurance unit volume decreased close to 1% year over year, indicating challenges in the US insurance business.

Decrease in Global Inventory

Global inventory decreased nearly 10%, including an 11% decrease in the US, reflecting lower assignments and faster cycle times.

Decline in International Purchase Vehicle Sales

International purchase vehicle revenue decreased by over $23 million or 25%, driven by a shift from purchase contracts to consignment models.

Challenges in Heavy Equipment Auction Space

Observed softness due to uncertainty regarding infrastructure spending and tariffs.

Facility-Related Cost Increases

Global facility-related costs increased by about 12%, reflecting ongoing investments in operational capacity.

Company Guidance

In Copart, Inc.'s Third Quarter Fiscal 2025 earnings call, CEO Jeff Liaw and CFO Leah Stearns discussed several key metrics and trends. The global insurance volume saw a nominal decline of 0.3% year-over-year, with a 0.9% drop in the U.S., although accounting for leap year effects showed a 1.3% and 0.6% increase respectively. U.S. total loss frequency rose to 22.8%, up roughly 100 basis points from the previous year. Global unit sales grew by 1%, translating to over 2% on a per business day basis. U.S. insurance unit volume was nearly flat, while non-insurance U.S. unit volume outpaced this with significant growth in BlueCar services (14%) and dealer sales (3%). Internationally, unit sales grew by 6%, with purchase units decreasing by 13%. Global facility-related costs increased by 12%, reflecting ongoing investments. Revenues rose to $1.2 billion, with a 9% increase in global service revenue. GAAP net income increased by over 6% to $407 million, supported by a $7 million rise in interest income. The company also highlighted its strategic land acquisitions to enhance storm readiness, exemplified by the acquisition of Hall Ranch in South Florida, providing 400 acres for vehicle storage.

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.59B	4.24B	3.87B	3.50B	2.69B	2.21B
Gross Profit	2.05B	1.91B	1.74B	1.61B	1.34B	1.01B
EBITDA	1.86B	1.76B	1.65B	1.51B	1.26B	922.46M
Net Income	1.48B	1.36B	1.24B	1.09B	936.50M	699.91M
Balance Sheet
Total Assets	9.67B	8.43B	6.74B	5.31B	4.56B	3.46B
Cash, Cash Equivalents and Short-Term Investments	4.38B	3.42B	2.36B	1.38B	1.05B	477.72M
Total Debt	101.06M	118.73M	120.45M	119.47M	518.07M	518.62M
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	-24.60M

Copart Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price48.64

Price Trends

50DMA

47.35

Positive

100DMA

52.32

Negative

200DMA

54.94

Negative

Market Momentum

MACD

0.33

Negative

RSI

59.16

Neutral

STOCH

71.99

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPRT, the sentiment is Neutral. The current price of 48.64 is above the 20-day moving average (MA) of 47.15, above the 50-day MA of 47.35, and below the 200-day MA of 54.94, indicating a neutral trend. The MACD of 0.33 indicates Negative momentum. The RSI at 59.16 is Neutral, neither overbought nor oversold. The STOCH value of 71.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAG	80 Outperform	$12.37B	13.03	18.11%	2.65%	2.39%	5.84%
CPRT	76 Outperform	$47.04B	32.15	18.54%	―	10.21%	5.94%
KAR	72 Outperform	$3.10B	39.30	6.27%	―	11.45%	741.65%
KMX	71 Outperform	$8.95B	16.50	8.97%	―	3.17%	42.14%
AN	70 Outperform	$8.33B	13.84	27.24%	―	3.15%	-12.49%
Sector *	64 Neutral	$10.95B	16.37	8.81%	1.96%	2.68%	-15.33%
ACVA	54 Neutral	$1.99B	―	-14.18%	―	30.08%	21.11%

* Industrials Sector Average

Performance Comparison

CPRT

Copart

48.61

-3.79

-7.23%

AutoNation

222.08

43.07

24.06%

KMX

CarMax

62.07

-23.24

-27.24%

KAR

OPENLANE

29.10

11.83

68.50%

PAG

Penske Automotive Group

188.32

23.83

14.49%

ACVA

ACV Auctions

11.51

-6.76

-37.00%

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.Date of analysis: Aug 22, 2025