COPART, INC. (CPRT): what the price requires
At today's price, COPART, INC. (CPRT) is priced for +4.4% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CPRT
Headline
| Field | Value |
|---|---|
| Ticker | CPRT |
| Company | COPART, INC. |
| Current price | $27.36/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 7.0% |
| Operating margin today | 36.7% |
| Margin compression implied | -29.7pp |
| Implied growth | 4.4% |
| Multiple paid | 13x operating income |
The operating-margin requirement is derived from the framework's value band at year 10, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 9.4% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5.2pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -1.12σ |
| cohort percentile (of 210 peers) | 27 |
| implied end-window share | 0% |
Valuation X-Ray
Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.49x | 5 | expensive |
| Earnings | 1.80x | 5 | expensive |
| Relative | 1.42x | 5 | expensive |
| Growth | 1.50x | 3 | expensive |
Families that call it expensive: Earnings, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $17.25 | 1.59x | yes | FCF base $1.3B, growth 1% (input: historical growth), terminal g 1.1%, WACC 9.2%, 5yr projection |
| DCF Exit Multiple | Growth | $24.49 | 1.12x | yes | Exit EV/EBITDA: 11.9x / 13.9x / 15.9x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $30.51 | 0.90x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.9x / 20.0x / 23.1x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $17.81 | 1.54x | yes | BV/sh $9.31, ROE (TTM) 17.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $24.32 | 1.12x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $18.22 | 1.50x | yes | Rev $4.6B, growth 1% (input: historical growth; tapered), Terminal P/S: 4.7x / 5.6x / 6.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $19.20 | 1.42x | yes | EPS $1.60, growth 5% (input: historical EPS growth), PEG=3.19 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $13.94 | 1.96x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.54B × (1−20%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $24.26 | 1.13x | yes | BV $9.31 + 5yr PV of (ROE (TTM) 17.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $18.30 | 1.49x | yes | √(22.5 × EPS $1.60 × BVPS $9.31) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $27.61 | 0.99x | yes | EBITDA $1.87B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $15.16 | 1.80x | yes | FCF $1338.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $14.72 | 1.86x | yes | SBC-adj FCF $1.30B (FCF $1.34B − SBC $0.04B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $25.37 | 1.08x | yes | EPS $1.60 × (8.5 + 2×5.2%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $4.19 | 6.53x | yes | BV $9.31 × (ROIC 4.1% / WACC 9.2%) |
| P/Sales Sector | Relative | $7.38 | 3.71x | yes | Revenue $4.64B × sector P/S 1.5x |
| PEG Fair Value | Relative | $12.50 | 2.19x | yes | EPS $1.60 × (PEG 1.5 × growth 5.2% (input: historical EPS growth)) → PE 7.8x |
| Earnings Yield | Earnings | $17.30 | 1.58x | yes | EPS $1.60 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.7m |
| Net debt / NOPAT (after-tax) | 0.00x |
| Net debt / operating income (pre-tax) | 0.00x |
| Share count CAGR (buyback) | -0.5% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Copart runs the dominant online salvage-vehicle auction marketplace, an asset-light, network-effect business earning a 36.6% operating margin, with roughly $3.35 billion of cash against about $115 million of debt.
- The structural tailwind is rising total-loss frequency, which reached 23.6% in early 2026 (up nearly five points over four years), as costlier repairs push insurers to total more damaged cars and route them to auction.
- The near-term tension is growth: fiscal Q3 2026 revenue rose just 2.1% as U.S. insurance unit volume fell 4.2%, offset by record average selling prices (U.S. insurance ASPs up 4.1%), and the price already assumes a return to historical growth.
Bull Case
Start with the bear's best punch, because the bull case has to survive it: growth has slowed hard. Fiscal Q3 2026 revenue rose just 2.1%, U.S. insurance unit volume fell 4.2%, and the nine-month top line is essentially flat. The question is whether that is the business breaking or the business pausing, and the data points to a pause. The unit softness traces to softer claims activity as drivers adjust to higher premiums, while the structural driver of Copart's volume keeps climbing: total-loss frequency, the share of damaged vehicles insurers write off rather than repair, reached 23.6% in early 2026, up nearly five points over four years. The 10-K is blunt that selling prices are "driven primarily by: (i) market demand for rebuildable, drivable vehicles; (ii) used car pricing", and on price Copart is winning, with U.S. insurance average selling prices at a record, up 4.1% in the quarter.
The franchise underneath is the reason a soft volume quarter does not threaten the thesis. Copart runs the dominant online salvage auction, a two-sided marketplace where the most sellers attract the most buyers, built on physical yards, regulatory licenses, and a global online bidder base a competitor cannot assemble quickly. It converts that position into a 36.6% operating margin, the kind of profitability that signals real pricing power rather than a commodity service. The 10-K does not pretend the moat is automatic, noting the "vehicle sales industry is highly competitive, and we may not be able to compete successfully", but the margin is the evidence that, for now, it competes from a position of strength.
The growth options are real and already showing up. International is doing the heavy lifting while U.S. insurance volume rests: international units rose 5.9% and international revenue grew about 14.1%, with noninsurance units up double digits. The adjacent industrial-equipment platform, Purple Wave, grew gross transaction value more than 25% over the trailing year. And the company can fund all of it from cash: roughly $3.35 billion on the balance sheet against about $115 million of debt removes financial risk entirely. A debt-free marketplace with a structural total-loss tailwind, record pricing, and international and adjacent-platform growth is an unusual combination, and the pullback toward a 52-week low has compressed the multiple paid for it.
Bear Case
The oddest line in the bear case is the balance sheet, because a hoard usually reads as safety. Copart holds roughly $3.35 billion of cash against about $115 million of debt, which is genuine protection, but cash that large, earning a modest yield while it sits, is also a capital-allocation question the company has been slow to answer. Idle capital drags reported return on invested capital, and a marketplace this profitable that neither deploys the cash into growth fast enough to consume it nor returns it at scale is letting a meaningful chunk of its asset base do very little. The fortress is real; what the fortress is for is the open question.
The growth that justified the premium has decelerated sharply. Fiscal Q3 2026 revenue rose just 2.1%, nine-month revenue was about flat, and the cause is concentrated on the volume side: U.S. insurance unit volume fell 4.2% and global insurance units fell 2.7%, with the top line held up almost entirely by record average selling prices. Pricing offsetting volume works until it doesn't. Used-vehicle values are cyclical, and if average selling prices roll over while insurance volumes are still soft, both legs of the revenue bridge weaken at the same time. The market has registered the shift, marking the stock toward a 52-week low. Competition presses from the other side as well: the 10-K concedes the "vehicle sales industry is highly competitive", and rivals contest the same vehicle supply, the same buyers, and the same floorplan economics.
What ties it together is that the price already assumes the round trip back to historical growth. The price embeds operating-income growth around 8% a year, and no family of valuation method reaches today's level: the asset, earnings-power, peer-multiple, and even forward-growth lenses all sit below the price. Copart has grown at the implied pace before, so the rate is not fantasy, but the recent prints run closer to 2%, which means the buyer is underwriting a return to form rather than a continuation of the current trend. The bet is that total-loss frequency and record pricing carry the model through a soft-volume patch and growth re-accelerates. If insurance volumes stay soft and selling prices stop setting records, the premium loses the one thing holding it up.
Valuation
Read backward, today's $30.85 (as of June 14, 2026) implies operating-income growth of roughly 8% a year sustained for several years, on a business currently earning a 36.6% operating margin. Copart has grown faster than that historically, so the implied rate is within what the franchise has demonstrated; the stretch is duration and the assumption that the compounding resumes, not that the level is impossible. What that backward read cannot see but the recent results can is that Copart is presently growing closer to 2%, so the price is paying for a re-acceleration rather than for the trend in front of it.
The families of method agree the price has run ahead of today's economics. None of them reaches the current price: the asset-value lens, the earnings-power lens, the peer-multiple comparison, and the forward-growth methods all land below it. Part of that is a genuine signal that the stock is not cheap on any standard frame, and part is artifact: a no-growth earnings-power view structurally understates a 36.6%-margin compounder, and the large idle cash balance depresses the return-on-capital measures that feed the asset-value methods. The honest read is that the price is a bet beyond what any backward-looking frame supports, justified only if the growth re-acceleration the price implies actually shows up.
The downside, at least, is unusually well bounded. Roughly $3.35 billion of cash against about $115 million of debt means solvency is a non-issue and the franchise can self-fund through a soft patch without touching the equity. So the decisive variable is not the balance sheet; it is the durability of the growth the price implies. If insurance volumes recover and average selling prices hold their records, the re-acceleration arrives and the premium is earned. If they don't, the price has no value-method floor beneath it to catch the fall.
Catalysts
Copart reported fiscal Q3 2026 (quarter ended April 30, 2026) in late May, with consolidated revenue of about $1.24 billion, up 2.1% year over year, net income of $402.4 million, and diluted EPS from continuing operations of $0.43 against $0.42 a year earlier. Through nine months, revenue was roughly $3.5 billion, essentially flat, underscoring the deceleration that has defined the fiscal year.
The volume-versus-pricing split is the story inside the print. Global insurance unit sales fell 2.7% and U.S. insurance unit volume dropped 4.2%, with management attributing the softness to reduced claims activity as drivers adjust to higher premiums. Pricing absorbed the shortfall: U.S. insurance average selling prices rose 4.1% to a record, and global average selling prices rose about 5%. International was the bright spot, with total international units up 5.9%, noninsurance units up double digits, and international revenue up roughly 14.1%, led by the UK, Germany, and Canada. The longer-term backdrop stayed favorable, with total-loss frequency at 23.6% in the first calendar quarter of 2026.
Analyst sentiment is constructive but split, with a buy-leaning consensus and a wide twelve-month price-target range running from the low $30s to the low $60s, a spread that mirrors the central question: whether the recent volume softness is a pause in a structurally growing business or the start of a slower-growth chapter. The next checkpoints are the trajectory of insurance unit volumes and whether average selling prices can hold their records as used-vehicle values move.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- OPLN (OPENLANE, Inc.)
- (no filing in the citation store)
- KMX (CARMAX, INC.)
- (no filing in the citation store)
- CVNA (CARVANA CO.)
- (no filing in the citation store)
- ABG (ASBURY AUTOMOTIVE GROUP, INC.)
- (no filing in the citation store)
- GPI (Group 1 Automotive, Inc)
- (no filing in the citation store)
- SAH (SONIC AUTOMOTIVE, INC.)
- (no filing in the citation store)
- AN (AUTONATION, INC.)
- (no filing in the citation store)
- RUSHA (RUSH ENTERPRISES, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Copart fiscal Q3 2026 results, May 2026