Copart (CPRT) AI Stock Analysis

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Copart

(NASDAQ:CPRT)

Rating:69Neutral

Price Target:

$59.00

▲(17.65%Upside)

Copart's overall score is driven by strong financial performance and positive earnings call highlights, despite technical indicators showing bearish trends. The company's high valuation also weighs on the score, but strategic investments and robust cash flow position it well for future growth.

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

$48.47B

Dividend YieldN/A

Average Volume (3M)6.04M

Price to Earnings (P/E)33.1

Beta (1Y)1.00

Revenue Growth10.21%

EPS Growth5.94%

CountryUS

Employees13,086

SectorIndustrials

Sector Strength91

IndustryAuto - Dealerships

Share Statistics

EPS (TTM)0.42

Shares Outstanding966,936,200

10 Day Avg. Volume7,937,878

30 Day Avg. Volume6,035,284

Financial Highlights & Ratios

PEG Ratio9.86

Price to Book (P/B)7.15

Price to Sales (P/S)0.00

P/FCF Ratio58.45

Enterprise Value/Market Cap1.16

Enterprise Value/Revenue3.25

Enterprise Value/Gross Profit28.03

Enterprise Value/Ebitda8.26

Forecast

1Y Price Target

$62.50

Price Target Upside24.63% Upside

Rating ConsensusHold

Number of Analyst Covering4

Copart Business Overview & Revenue Model

Company DescriptionCopart, Inc. provides online auctions and vehicle remarketing services in the United States, Canada, the United Kingdom, Brazil, the Republic of Ireland, Germany, Finland, the United Arab Emirates, Oman, Bahrain, and Spain. 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 to vehicle sellers, insurance companies, banks and finance companies, charities, fleet operators, dealers, vehicle rental companies, and individuals. 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, title processing and procurement, loan payoff, flexible vehicle processing programs, buy it now, member network, sales process, and dealer services. Its services also comprise services to sell vehicles through CashForCars.com; U-Pull-It service that allows buyer to remove valuable parts and sell the remaining parts and car body; copart 360, an online technology for posting vehicle images; membership tiers for those registering to buy vehicles through Copart.com; and virtual queue to secure a place in line while visiting one of its locations. The company sells its products principally to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, and exporters, as well as to the public. The company was incorporated in 1982 and is headquartered in Dallas, Texas.

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: -17.33%|

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 strong financial performance. The income statement shows excellent profitability with high net and gross profit margins, and a solid revenue growth rate. The balance sheet indicates low leverage with a significant equity ratio and impressive ROE. Cash flow generation is robust, with healthy free cash flow growth and effective capital management.

Income Statement

Very Positive

Copart's income statement indicates strong profitability and growth. The Gross Profit Margin stands at 58.65% for TTM, reflecting efficient cost management. Net Profit Margin is a robust 32.27%, indicating high profitability. Revenue Growth Rate is 6.37% year-over-year, suggesting solid growth momentum. EBIT and EBITDA Margins are 36.15% and 38.30% respectively, showcasing strong operational efficiency.

Balance Sheet

Very Positive

The balance sheet shows financial stability with a low Debt-to-Equity Ratio of 0.01, indicating minimal reliance on debt. The Return on Equity (ROE) is impressive at 17.52%, reflecting high returns to shareholders. The Equity Ratio is 90.38%, signaling a firm equity foundation. Overall, the company's balance sheet portrays low leverage and strong equity positioning.

Cash Flow

Very Positive

Copart's cash flow statement highlights robust cash generation. The Free Cash Flow Growth Rate is 5.71%, indicating healthy cash flow expansion. Operating Cash Flow to Net Income Ratio is 1.10, suggesting effective cash generation from operations. Free Cash Flow to Net Income Ratio is 0.70, demonstrating good conversion of earnings into cash flow despite significant capital expenditures.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
4.51B	4.24B	3.87B	3.50B	2.69B	2.21B
	Gross Profit
2.01B	1.94B	1.74B	1.61B	1.34B	1.01B
	EBIT
1.63B	1.57B	1.49B	1.37B	1.14B	816.10M
	EBITDA
1.78B	1.76B	1.49B	1.37B	1.14B	922.46M
	Net Income Common Stockholders
1.45B	1.36B	1.24B	1.09B	936.50M	699.91M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.80B	3.42B	2.36B	1.38B	1.05B	477.72M
	Total Assets
9.19B	8.43B	6.74B	5.31B	4.56B	3.46B
	Total Debt
119.40M	118.73M	120.45M	119.47M	518.07M	518.19M
	Net Debt
-3.22B	-1.40B	-836.94M	-1.26B	-530.19M	40.47M
	Total Liabilities
863.32M	879.21M	750.44M	683.26M	1.03B	965.75M
	Stockholders Equity
8.30B	7.52B	5.99B	4.63B	3.53B	2.49B
Cash Flow		Free Cash Flow
1.02B	961.57M	847.57M	839.24M	527.89M	314.21M
	Operating Cash Flow
1.60B	1.47B	1.36B	1.18B	990.89M	917.88M
	Investing Cash Flow
435.11M	-940.08M	-1.89B	-442.31M	-465.47M	-601.21M
	Financing Cash Flow
50.54M	19.27M	66.61M	-382.69M	40.92M	-27.41M

Copart Technical Analysis

Technical Analysis Sentiment

Negative

Last Price50.15

Price Trends

50DMA

58.00

Negative

100DMA

57.15

Negative

200DMA

56.26

Negative

Market Momentum

MACD

-2.75

Positive

RSI

21.74

Positive

STOCH

4.27

Positive

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 50.15 is below the 20-day moving average (MA) of 56.23, below the 50-day MA of 58.00, and below the 200-day MA of 56.26, indicating a bearish trend. The MACD of -2.75 indicates Positive momentum. The RSI at 21.74 is Positive, neither overbought nor oversold. The STOCH value of 4.27 is Positive, 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	$8.36B	10.12	12.95%	0.67%	12.96%	-6.25%
SAH	72 Outperform	$2.48B	10.41	24.52%	1.78%	1.59%	43.91%
KAR	71 Outperform	$2.54B	40.80	5.46%	―	9.42%	―
CPRT	69 Neutral	$48.47B	33.13	18.54%	―	10.21%	5.94%
Sector *	66 Neutral	$4.51B	12.29	5.40%	248.53%	4.14%	-12.41%
ACVA	65 Neutral	$2.83B	―	-16.49%	―	32.89%	7.44%
KMX	64 Neutral	$10.01B	20.51	8.13%	―	-0.69%	6.27%

* Industrials Sector Average

Performance Comparison

CPRT

Copart

50.15

-3.44

-6.42%

KMX

CarMax

67.20

-1.27

-1.85%

KAR

OPENLANE

23.80

6.91

40.91%

LAD

Lithia Motors

323.56

65.47

25.37%

SAH

Sonic Automotive

74.36

18.44

32.98%

ACVA

ACV Auctions

16.69

-1.67

-9.10%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.