Copart CPRT

Reference table

1. What it is

Copart, Inc. (NASDAQ: CPRT) is a global online vehicle-auction and remarketing company founded in 1982, headquartered in Dallas, TX, run by CEO Jeffrey Liaw. Its core is a "virtual bidding" online salvage-auction platform connecting ~1 million members in 185+ countries to vehicles consigned mostly by insurance carriers (cars written off as total losses), plus banks, fleets, rental firms, charities and dealers. Copart owns or controls 250+ physical yards across 11 countries where the cars are stored, inspected, imaged (its Copart 360 system) and processed — the land and logistics are as much the moat as the software. Adjacencies include CashForCars direct buying, Purple Wave (equipment auctions), powersports, and Copart Recycling (parts). Fiscal year ends July 31.

Revenue mix (FY2025, from FMP segmentation):

• By type: Service $3.97B (85%) · Product / vehicle sales $0.68B (15%). The high-margin service (fee) revenue is the engine; product is lower-margin principal (bought-and-resold) vehicles.
• By geography: United States $3.86B (83%) · International $0.79B (17%). The base is US-concentrated; international (UK, Germany, Brazil, Spain, and others) is the longer-run growth lever.

The reason the stock exists as a debate today is that this fee-toll model — which compounded at ~20% for a decade — has, over the last several quarters, decelerated to roughly flat (see §5).

2. The expert thesis (no coverage — stated plainly)

There is no expert coverage of CPRT in the Synthos knowledge base. total_claims = 0, net_bullish_voices = 0, and there are zero traceable claim_ids. None of the tracked high-skill voices (the panel that drives our conviction-track names) has an on-record, distilled view on Copart in our KB.

What that means for this note, honestly: the verdict is fundamentals- and quant-driven, not conviction-driven. We are not borrowing anyone's thesis and we will not manufacture one. Every judgment below is built from (a) the reported financials, (b) live FMP analyst estimates (labeled as estimates), and (c) the SEC earnings release. Where the Street has a view, we show it as context (11 Buy / 9 Hold / 1 Sell, $46.5 consensus target), not as our anchor. If and when a tracked expert takes a position on CPRT, this section — and the conviction rating — gets revisited.

3. Synthos scores & the Bull / Base / Bear cases

The one-glance judgment — three scores, 0–10, each anchored to real metrics (not probabilities we can't honestly calibrate):

The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We deliberately do not attach probabilities: the base case is by definition the expected path, so a weighted blend would just restate it with false precision. Instead the cases bound the range, and the scores above summarize them.

Synthos fair value = the base case, ~$41 (+37%), with the full $27–$52 span as the honest range. Our base sits below the Street's $46.5 consensus — we are less willing to underwrite a full re-rating while volume growth is still negative — but well above today's $30, because an 18× multiple on a 33%-net-margin, net-cash duopolist is genuinely cheap for the quality. This is a tracked call — the Forecaster Scorecard grades it once it matures.

4. Exponential Potential

Synthos separates compounders (durable high returns on capital) from exponentials (accelerating, multi-baggers-from-here). CPRT is a high-quality compounder that is currently decelerating — the opposite of exponential:

• Forward growth: revenue CAGR FY25→FY30E ~3.3% ($4.65B → $5.47B); EPS CAGR ~6.6% ($1.59 → $2.19E). Respectable for a mature toll business, but modest.
• Acceleration (the 2nd derivative) is negative: annual revenue growth ran +9.7% (FY25) but has since decelerated to +2.1% in Q3'26, with 9-month FY26 revenue actually −0.2% YoY. Growth is still slowing, not confirmed bottoming. Per our flagship philosophy we favor forward, accelerating next-exponentials — CPRT is on the wrong side of that acceleration test today.
• Room to run: at $27.8B the cap is small enough that a re-rating + volume recovery could deliver a solid double, but the addressable market (global salvage/remarketing) is mature and grows with vehicle parc and total-loss frequency — there is no TAM explosion to fund a 5×.
• Reinvestment runway: still real — heavy, high-return capex into yards and land (~$569M FY25) at 15% ROIC — but it is capacity/land reinvestment into a slow-growth end market, not a demand inflection.

Exponential Potential: Low (3/10). Own CPRT for durable, high-quality earnings and a possible valuation-recovery re-rate — not for exponential growth. A small, accelerating name with these margins would score 8; CPRT scores 3 precisely because the growth is decelerating.

5. Financials (real numbers — FMP annual/quarterly + SEC 8-K)

• Revenue: FY25 (ended Jul 2025) $4.65B, +9.7% (FY24 $4.24B, +9.5% on FY23 $3.87B). But the momentum has broken: Q3'26 revenue $1.237B was only +2.1% YoY, and 9-month FY26 revenue was −0.2% YoY ($3.514B vs $3.522B) per the SEC release. The decade-long ~20% compounder has stalled.
• Quarterly trajectory (the deceleration, real): Q1'26 $1.155B → Q2'26 $1.122B → Q3'26 $1.237B (+2.1% YoY). Flat-to-low-single-digit, a stark break from history.
• Margins: gross 45.5% TTM, EBITDA 45.8%, net 33.5% TTM — best-in-class and stable. Profitability is not the problem.
• Earnings: net income $1.55B FY25 (EPS $1.61 / $1.59 diluted). But Q3'26 net income was $402M, −1.0% YoY, and 9-month FY26 net income was flat (+0.1%) — earnings have plateaued alongside revenue.
• Returns on capital: ROE 16.6%, ROIC 15.3%, ROCE 18.9% (TTM) — elite for an asset-heavy business.
• Cash flow: operating CF $1.80B FY25, capex −$0.57B, FCF ~$1.23B. FCF yield ~4.8%. Capex/OCF ~21% — reinvesting hard into yards while still throwing off big free cash.
• Balance sheet (fortress): net cash ~$2.68B (net-debt/EBITDA −1.5×); FY25 total debt just $104M (finance leases). Current ratio 7.6×. This is one of the cleanest balance sheets in the S&P 500 — and it collects interest income (~$150M/yr) rather than paying it.

6. Valuation — priced in or room?

For the first time in years, CPRT is not obviously expensive. Trailing 18.5× EPS, forward 18.9× FY26E → 17.8× FY27E → 13.7× FY30E, EV/EBITDA 11.5×, EV/S 5.3×, P/B 3.3×, FCF yield ~4.8%. Against a business earning 33% net margins with 15%+ ROIC and net cash, an 18× multiple is undemanding — the FMP letter rating is A+ (ROE/ROA/debt sub-scores maxed at 5/5).

The catch is that the cheapness is earned: the multiple compressed from 30×+ to 18× because growth went to zero. So the valuation question is really a growth question. Adjusting for the ~$2.7B net cash (~$2.80/share), the operating business trades a touch cheaper still. A reverse read: at $30 the market is pricing roughly no re-acceleration and a permanently lower multiple — i.e., it has already discounted a good deal of the bad news, which is exactly what creates the tactical setup. Street targets (context): consensus $46.5 (high $48, low $45) — notably, the entire Street target range sits above the current $30 price, implying analysts see the de-rating as overdone. Our base $41 is more conservative than the Street because we won't underwrite a full re-rate until volumes turn.

7. Technicals (from the tech block, computed on EOD price history)

• Trend: down. $30.01 sits below the 50-DMA ($31.9) and the 200-DMA ($37.5), with the 50 below the 200 (death-cross posture). MACD −0.82 (negative).
• Location: −40% off the 52-week high ($49.97), only +6.8% off the 52-week low ($28.1) — trading near the low end of its range, with a brutal −53% max drawdown from peak.
• Momentum: RSI(14) 44.8 — neutral-to-weak, neither oversold nor showing upside thrust.
• Relative strength (the warning): CPRT −39.5% 12-mo vs SPY +20.6% and QQQ +30.3%; −9% 3-mo while SPY +14% / QQQ +22%. Persistent, severe underperformance of both the market and the Nasdaq — this is a falling knife, not a base.
• Read: technicals do not confirm the fundamental value case yet. There is no evidence of a bottom on the chart. This is why the verdict is Tactical and the sizing note says scale in against the downtrend rather than buy a lump — let price stabilize (a reclaim of the 50-DMA / a higher low) before adding aggressively.

8. Moat & competitive position

Copart's moat is a rare combination: (1) a duopoly structure — Copart and IAA (now part of RB Global) together dominate US salvage auctions, a two-player market that is very hard to enter because (2) physical yards on owned/controlled land near population centers are scarce, permit-gated, and capital-intensive to replicate; (3) a two-sided network — the more insurers consign, the more global buyers show up, and vice versa; and (4) switching costs / integration with insurer claims workflows. The result is pricing power and 33% net margins that have persisted for years. The genuine long-run question marks are cyclicality (volumes track total-loss frequency, miles driven, and catastrophe activity) and the secular ADAS/autonomy debate (safer cars → fewer wrecks eventually, though rising vehicle complexity also raises total-loss frequency per accident, which cuts the other way).

Peer set (FMP-supplied, market cap): the FMP peer list is a generic "consumer/industrial services" bucket rather than true comparables — Carnival $38B, Chipotle $45B, D.R. Horton $45B, eBay $51B, Ford $52B, Flutter $18B, Las Vegas Sands $31B, Trip.com $26B, Yum Brands $45B. None is a real salvage-auction comp; the only true competitor is IAA / RB Global (not in this list). Treat the peer table as sector context, not a valuation anchor.

9. Management, capital allocation & guidance

• Capital allocation: conservative and owner-friendly on the balance sheet — Copart hoards net cash (~$2.7B) and reinvests heavily into yards/land at 15%+ ROIC. It pays no dividend, and in FY25 the cash-flow statement shows no buyback — though the SEC release shows diluted shares falling ~3.6% YoY in Q3'26, hinting at recent repurchase activity worth confirming. The critique: with the stock down 40% and $2.7B of idle cash earning ~4%, an explicit buyback at these levels would be accretive — a capital-return decision to watch.
• Insider activity: the most recent Form 4 cluster (CEO Jeffrey Liaw, filed 2026-04-17) is dominated by option exercises (M-Exempt acquisitions at $6.78–$8.70 strikes) with associated sales of ~26K shares at ~$33 — routine option-exercise-and-sell mechanics, not a discretionary bearish signal. No alarming pattern in the sampled window.
• Management's own guidance (half-weighted — their book): the SEC 8-K earnings release (Q3 FY26, filed 2026-05-21) is a real earnings release (reports revenue $1.2B, EPS $0.43, full income statement and balance sheet) — but Copart is well known for not issuing forward financial guidance, and the release contains no revenue/EPS outlook, no guidance ranges, and no forward targets beyond boilerplate forward-looking-statement caveats. Management forward guidance was therefore not available. We do not fabricate it. The forward figures in this note are FMP analyst consensus, labeled as estimates.

10. Catalysts & what to watch

• Next earnings: 2026-09-03 (Q4'26 / full FY26; Street EPS $0.39, revenue ~$1.15B). The single most important line: US salvage unit volume and per-unit service revenue — the tell on whether the stall is bottoming.
• Total-loss frequency & insurance dynamics: rising repair costs push more damaged cars to "total loss," which feeds Copart volume — watch insurer total-loss ratios.
• International ramp: UK/Germany/Brazil/Spain growth is the clearest secular lever if the US matures.
• Catastrophe activity: hurricane/flood events produce volume spikes (a grim but real driver).
• Capital return: any initiation of a buyback or dividend against the $2.7B cash pile would be a sentiment catalyst.

Thesis tripwires (what would change the call): two more quarters of negative revenue growth (stall confirmed structural, not cyclical); net-margin compression below ~30% (pricing power cracking); or clear evidence ADAS/autonomy is durably lowering wreck volumes. Any of these would push the verdict toward Watch.

11. Key risks

• The stall is the story (fundamental): revenue is roughly flat and the second derivative is still negative. If low-single-digit is the new normal, the stock is a slow compounder at best, and the re-rating thesis fails.
• Cyclicality: volumes depend on miles driven, accident frequency, total-loss economics, and catastrophe activity — none of which Copart controls.
• Secular ADAS / autonomy (long-tail): safer vehicles could, over many years, reduce collision/salvage volume (partially offset by rising per-accident total-loss frequency).
• Customer concentration: a meaningful share of consignments comes from a handful of large insurance carriers; contract shifts matter.
• No downside "conviction cushion": because there is zero expert coverage in the KB, we have no independent panel corroborating the thesis — the entire call rests on fundamentals and valuation, which raises the bar for humility (hence Tactical, not Core).
• Technical downtrend: the chart is in a confirmed downtrend below both major moving averages; catching it early risks further drawdown.

12. Verdict, position sizing & monitoring

Buy — Tactical. Copart is a genuinely elite business — net-cash fortress balance sheet, 33% net margins, 15%+ ROIC, a durable duopoly moat — whose stock has been cut roughly in half as growth stalled from ~20% to ~0%. The de-rating from 30×+ to ~18× has done real work: you are now paying a fair-to-cheap multiple for a wonderful franchise, with the Street's entire target range ($45–$48) sitting above today's $30. But two facts keep this Tactical, not Core: the growth stall is unresolved (still decelerating), and there is no expert-panel corroboration in the Synthos KB — the thesis is fundamentals-and-quant only, and honesty requires saying so.

• Sizing: tactical/quality satellite, ~2–3% of the flagship — a quality name to accumulate at a discount, not a high-conviction core position. Because the chart is in a downtrend, scale in (starter now, add on a volume-growth inflection or a reclaim of the 50-DMA) rather than committing a lump.
• Monitoring: re-underwrite on the §10 tripwires; formal re-score at the 2026-09-03 print, focused on unit volume. If revenue growth turns clearly positive, this can graduate toward a higher-conviction Buy; if it stays negative, it drifts to Watch.
• Single biggest risk: that the stall is structural rather than cyclical — a great business that simply stops growing, leaving the stock range-bound. This verdict is logged as a tracked Synthos call as of 2026-07-03 at $30.01.

Provenance & disclosures

• Traceability: 0 KB claims, breadth 0 — there is no expert coverage of CPRT in the Synthos knowledge base, and this note states that plainly rather than inventing conviction. The verdict is fundamentals- and quant-driven. Fabricated conviction is structurally impossible (claim-ID reconciliation), and here there are simply no claim-IDs to cite.
• Data as-of: fundamentals 2026-04-30 (Q3'26, FY ends Jul 31) · estimates & prices 2026-07-02/03 · SEC 8-K earnings release filed 2026-05-21. Forward figures are analyst consensus (FMP), labeled as estimates.
• Management caveat: Copart does not issue forward financial guidance; no management outlook was available in the 8-K, and none is fabricated here.
• Peer caveat: the FMP peer list is a generic sector bucket and contains no true salvage-auction comparable (the real competitor, IAA/RB Global, is absent) — treat it as context only.
• Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
• Version: 2026-07-03. Prior versions available via the deep-dive version dropdown ("based on the info at the time").