Copart, Inc. (CPRT) is listed on NASDAQ and operates in the Specialty Business Services industry (Industrials sector).
Copart, Inc. provides online auctions and vehicle remarketing services in the United States, the United Kingdom, Germany, Brazil, Canada, the United Arab Emirates, Spain, Finland, Oman, the Republic of Ireland, and Bahrain. It offers a range of services to process and sell vehicles over the internet through its virtual bidding third generation internet auction-style sales technology. The company's services include online seller access, salvage estimation, estimating, end-of-life vehicle processing, transportation, vehicle inspection stations, on-demand reporting, title processing and express, loan payoff, flexible vehicle processing programs, buy it now, sales process, and dealer services. Its services also comprise services to sell vehicles through BluCar, CashForCars.com, CashForCars.ca, CashForCars.de, CashForCars.co.uk, and Cash-for-cars.ie; Copart Recycling service, which allows the public to purchase parts from salvaged and end-of-life vehicles; and copart 360, a proprietary technology that captures clear 360-degree views of interiors and exteriors of cars, trucks, and vans. In addition, it provides IntelliSeller, an automated tool leveraging its vehicle and sales data to assist its sellers in making vital auction decisions; Purple Wave Inc., that offers wholesale construction, agriculture, and fleet remarketing services through no-reserve online auctions; wholesale powersport vehicle remarketing services through live and online auction platforms. The company sells i...
| Rating | Analysts |
|---|---|
| Strong Buy | 0 |
| Buy | 10 |
| Hold | 8 |
| Sell | 1 |
| Strong Sell | 0 |
Copart, Inc., established in 1982 and headquartered in Dallas, Texas, operates in the specialty business services industry within the industrials sector. The company provides online auctions and vehicle remarketing services across several countries, including the United States, United Kingdom, Germany, Brazil, Canada, United Arab Emirates, Spain, Finland, Oman, Republic of Ireland, and Bahrain. Copart utilizes a virtual bidding platform for internet auction-style sales, offering services such as online seller access, salvage estimation, vehicle processing, transportation, inspection, and title processing. The company also facilitates vehicle sales through platforms like BluCar and CashForCars in various regions. Copart Recycling allows the public to purchase parts from salvaged vehicles. Additionally, Copart offers Copart 360, a technology providing 360-degree views of vehicles, and IntelliSeller, an automated tool for auction decision-making. The company also owns Purple Wave Inc., which provides wholesale construction, agriculture, and fleet remarketing services. Copart's clientele includes licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and the general public.
Over the past three fiscal years, the company has demonstrated robust growth and financial health. Revenue consistently increased at a compound annual growth rate (CAGR) of 9.6%, rising from $3.87 billion in 2023 to $4.65 billion in 2025. This growth was accompanied by a notable increase in earnings per share (EPS), which grew at an 11.5% CAGR, reaching $1.59 by 2025. Despite the revenue growth, operating margins experienced a slight compression, decreasing by 1.9 percentage points from 38.4% to 36.5%, suggesting some pressure on operational efficiency. However, net margins improved by 1.4 percentage points, indicating effective cost management and profitability enhancement. The company's cash generation capabilities strengthened significantly, with operating cash flow (OCF) and free cash flow (FCF) both showing consistent increases. FCF, in particular, grew at a remarkable 20.5% CAGR, reaching $1.23 billion in 2025, and the FCF margin expanded by 4.6 percentage points to 26.5%. The company's net cash position improved substantially, with net debt decreasing from -$837 million to -$2.68 billion, reflecting a strong balance sheet. Additionally, the company's liquidity ratios are exceptionally high, with a current ratio of 10.1 and a quick ratio of 10.0, underscoring its ability to meet short-term obligations. Despite a slight increase in share count by 1.1%, the overall financial performance indicates a solid foundation for continued operational success.
Recent developments for Copart, Inc. (NASDAQ: CPRT) are primarily centered around analyst ratings and insider trading activities. On April 23, Zacks Investment Research included Copart in its list of "New Strong Sell Stocks," indicating a bearish outlook. This follows an April 18 report where Copart received an average "Hold" rating from analysts, with Barclays lowering its target price to $32 from $33. Additionally, insider trading activity was noted with Jeffrey Liaw selling 26,213 shares at an average price of $33, as reported on April 19. Institutional trading also saw movements, with Davidson Kahn Capital Management LLC increasing its position in Copart by 3% in the fourth quarter, while HB Wealth Management LLC reduced its holdings by 7% during the same period. Assetmark Inc. raised its stake, and AQR Capital Management LLC significantly increased its shares, indicating varied institutional sentiment. Copart is set to release its third-quarter fiscal 2026 results on May 13, which will provide further insights into its financial performance. These developments reflect a mixed sentiment from analysts and investors, with some reducing their positions while others see potential value in the stock.
The salvage auction industry, where Copart operates, is currently experiencing a mix of macroeconomic and industry-specific trends. The industry is shaped by shifts in auto insurance coverage, with consumers pulling back on coverage due to economic pressures, leading to softer claims activity. However, total loss frequency continues to rise, a trend consistent over the years, which supports Copart's business model. Management highlights the structural advantages of their marketplace, such as auction liquidity and international buyer participation, as key tailwinds. Headwinds include the cyclical nature of insurance coverage and competitive dynamics within the industry. Despite these challenges, Copart's focus on delivering superior economic outcomes for insurance clients remains a consistent theme across calls.
Copart's recent performance has been influenced by a combination of declining unit volumes and rising average selling prices (ASPs). In the second quarter of fiscal 2026, consolidated revenue declined by 3.6% year-over-year, primarily due to lower unit volumes, although ASPs increased by 6%. The decline in unit volumes is attributed to a reduction in insurance coverage by consumers and a shift in market share among insurance carriers. Despite these challenges, Copart achieved record ASPs, driven by their global buyer network and enhanced data-driven merchandising. Management expressed satisfaction with their auction returns and cycle times, which have improved due to their extensive tow network and Title Express offering. However, they acknowledged the impact of macroeconomic factors such as consumer behavior and insurance industry cyclicality on their performance. The narrative between the calls remained consistent, with a focus on leveraging their competitive advantages to drive results.
Copart's forward strategy focuses on leveraging their competitive advantages to drive growth and value creation. Management is investing in technology, land capacity, and their sales force to enhance operational efficiency and expand their market presence. They emphasize the importance of auction liquidity, international buyer participation, and superior economic outcomes for sellers as key competitive advantages. Management acknowledges risks such as shifts in insurance coverage and competitive dynamics, particularly from other players in the salvage auction space. Analysts questioned the impact of market share dynamics and the potential for increased competition. The tension in the thesis lies in balancing growth with the cyclical nature of the industry and consumer behavior. While the strategy is sound, execution risks remain, particularly in maintaining market share and adapting to industry shifts.
Comparing the two calls, management has largely delivered on their commitments, particularly in terms of maintaining high ASPs and improving cycle times. In the earlier call, they emphasized the importance of auction liquidity and international buyer participation, which continued to be strong in the later call. However, unit volumes declined more than expected, which management attributed to macroeconomic factors rather than execution issues. Guidance on revenue and profit margins was met, although the decline in unit volumes remains a concern. Management's silence on specific competitive pressures suggests a focus on internal strengths rather than external threats. Overall, execution has been consistent, but challenges in unit volume growth highlight areas for improvement.
- Monitor total loss frequency trends, as management expects it to continue rising, impacting unit volumes positively.
- Track changes in insurance coverage and consumer behavior, as these are key drivers of unit volumes and claims activity.
- Observe international buyer participation and ASP trends, as these are critical to maintaining competitive advantages.
- Watch for any strategic shifts or investments in land capacity and technology, which are essential for long-term growth.
- Pay attention to management's commentary on competitive dynamics and market share, particularly regarding major insurance carriers.