COPART, INC. (CPRT): what the price assumes

In the published model solve dated 2026-Q2, anchored at $33.00, COPART, INC. (CPRT) is priced for +9.5% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/CPRT

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 10: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.5% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits 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.

Families that call it expensive: Asset, Earnings, Relative

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)

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• On revenue of $4.64B this company converts about 36.7% into operating profit, in an industry where the listed comparisons run OPLN at 10.9%, RUSHA at 5.3%, AN at 4.4% and SAH at 2.3%, which is the single fact that explains everything else about how it is priced.
• There are no borrowings outstanding, and at the last fiscal year end "$314.9 million of the $2.8 billion of cash, cash equivalents, and restricted cash was held by our foreign subsidiaries", with a further 2.0 billion dollars of held-to-maturity securities alongside it.
• Volume is what to watch: service revenue fell over the nine months ended April 30, 2026 on lower units, cushioned by higher revenue per car, and unit flow depends on how often insurers decide a damaged car is not worth repairing.

Bull Case

Take the price at face value first. At roughly 14 times company-wide operating income, what the market is asking of this business is that operating profit compound at something like 5.3% a year for five years. Nothing exotic. That is a mid-single-digit pace, inside what the company has recently delivered, and against its own peer set the multiple sits in the lower half of the range. So the market is not paying for a miracle; it is paying for continuation.

Now look at what is being continued. Copart converts about 36.7% of revenue into operating profit. The comparable listed businesses in vehicle remarketing and retail do not come close: OPLN manages 10.9%, RUSHA 5.3%, AN 4.4%, ABG 4.6%, GPI 3.3% and SAH 2.3%. That is not a rounding difference or an accounting quirk. It is a different business hiding inside the same industry classification, and it comes from the fact that 85% of revenue is service fees on other people's cars rather than the cars themselves.

The reason those fees hold is physical, and it is the least glamorous moat in the market: land. Salvage vehicles have to be stored somewhere near where they crashed, and the company describes site selection in terms of proximity "to a major road or highway" and, most importantly, appropriate zoning for the business. Zoned industrial acreage near metropolitan roads is not manufacturable. The filing is candid that new entrants face this too, warning that competition for such sites "could significantly increase the cost of such acquisitions and thereby materially impede our expansion objectives". Every yard already assembled is a barrier the next competitor pays retail to cross.

On the other side of the transaction sits the demand pool that makes the auctions work. The company maintains "a database of approximately 1 million registered members ("buyers") in the vehicle dismantling and recycling, rebuilding, used vehicle dealer and export industries". This is the part that compounds: insurers assign cars to whichever platform clears them at the highest net price, and the platform clears them highest because it has the most bidders, which is why it gets the next car. The buyer network and the seller relationships reinforce each other, and neither can be bought quickly.

The balance sheet gives that machine room to be patient. "The Company had no outstanding borrowings under the Revolving Loan Facility as of July 31, 2025 and July 31, 2024." Cash and equivalents plus held-to-maturity securities together sit in the billions against a $26.3B market value, the share count has been essentially flat over four years, drifting down about 0.5% a year, and the company is not consuming cash. A business that owns its assets outright and owes almost nothing gets to buy land in a downturn when its competitors are refinancing.

The concession the bull has to make is about pace. Revenue is not compounding the way it did; the most recent nine-month period saw service revenue fall on lower volume. The bull case does not require it to reaccelerate, only for the fee structure and the margin to hold while units eventually normalize, and there is a slow tailwind underneath, since the filing notes that the average age of cars on the road has continued to rise. Older cars are totalled more readily than new ones.

Bear Case

Begin with the money that is not doing anything. At the end of the last fiscal year the company reported "$314.9 million of the $2.8 billion of cash, cash equivalents, and restricted cash was held by our foreign subsidiaries", with roughly 2.0 billion dollars more sitting in held-to-maturity securities. That pile earns what short-dated government paper earns. The operating business earns dramatically more on the capital it uses, which is the entire reason the stock trades where it does. Every dollar parked in Treasuries rather than deployed into the business, returned to owners, or used to buy something is a dollar earning a fraction of the return the company itself demonstrates it can generate.

There is no dividend absorbing it, and the share count barely moves, drifting down about 0.5% a year over four years. So the capital is neither being reinvested at the rate the operating business earns nor handed back. Management has said, in effect, that it wants optionality. Optionality has a price, and the holder pays it in the form of a blended return that is lower than the operating business alone would deliver. For a company this profitable, that is the governance question worth asking.

The second problem is that the thing the price needs to grow is not growing right now. At roughly 14 times operating income, the price asks for operating profit to compound at around 5.3% a year for five years. Over the nine months ended April 30, 2026 the direction ran the other way: service revenue declined, driven by lower volume and only partly cushioned by higher revenue per car. Vehicle sales fell for a related reason the company states plainly, "a decrease in volume related to sellers switching to a consignment model marginally offset by an increase in revenue per car, which was due to a change in mix of vehicles sold". A mix shift toward consignment is not itself bad economics, but it does mean the top line understates and the growth the price wants has to come from unit flow that is currently falling.

Unit flow is the part nobody at the company controls. Whether a damaged car becomes salvage is an insurer's arithmetic, and the filing sets out the variables: used car pricing, repair costs, and the relationship between them, noting that near-term changes in used car prices and repair cost are inversely related and may move total loss frequency, which in turn affects the growth rate. Anything that makes it "less economical for insurance company sellers to declare a vehicle involved in an accident a total loss, could also have a material impact on revenue growth". Higher used-car values and cheaper repairs would each independently reduce the supply of cars this company exists to sell.

And the fee structure is not fully insulated. Under the company's PIP contracts the cost of transporting a vehicle to a facility is bundled into the fee, and the filing warns the company "may incur increased fees, which we may not be able to pass on". Fuel, drivers, and towing capacity are inputs it buys at market and sells at a contracted rate. That is a margin exposure sitting inside the very line that produces the 36.7% margin.

Put it together and the shape of the bear is not that this is a bad business. It plainly is not. It is that every family of standard valuation method lands below today's price, the earnings-power methods by the widest margin, and the gap is being asked to close through growth from a unit base that is currently shrinking while several billion dollars of the company's own capital sits idle.

Valuation

An unusual thing about this price is that no family of method reaches it. Asset value, earnings power, peer multiples and forward growth all land below where the stock trades, which means there is no standard frame that defends the current level on its own terms. The narrowest gap sits with the forward-growth methods, where the price is roughly 1.4 times what that family reaches; the widest sits with the earnings-power methods, where the price is about 1.8 times what they reach.

The earnings-power gap is the one to understand, because it is the most literal. Those methods take the profit the business currently produces, or the free cash it currently generates, and capitalize it at the cost of equity with no growth assumed whatsoever. Doing that here produces a figure well under the traded price. That is not a claim the stock is mispriced. It is the arithmetic statement that a buyer today is paying for growth, because the existing profit stream, valued as a perpetuity that never expands, does not get there.

The forward methods close most of the distance, and the closest of them does so by holding the exit multiple flat at today's level five years out. Say that plainly: the method reaches the price by assuming the market pays the same multiple of cash profit then as it does now. That assumption may well be right for a business with these margins. It is still an assumption rather than a finding, and it is the load-bearing one.

What the price actually embeds is more modest than the gap implies. At roughly 14 times company-wide operating income, the assumption backs out to operating profit compounding around 5.3% a year over a five-year stage, which sits inside what this company has recently delivered and in the lower half of the multiple range its peer set trades at. The two readings reconcile in one step: the trailing lenses value the current profit stream and stop, while the price credits five more years of compounding first. Hold that figure loosely, since it moves by roughly five points for every point of change in the assumed cost of capital.

The peer comparison explains why the market is willing to extend that credit. On revenue of $4.64B the company earns about 36.7% at the operating line. OPLN, the nearest thing to a direct comparison, earns 10.9% while growing revenue 10.1%. The dealer groups are further away still, with AN at 4.4%, ABG at 4.6%, GPI at 3.3% and SAH at 2.3%. A margin structure that far above an entire cohort is either a durable advantage or a temporary one, and the multiple is the market's vote on which.

The balance sheet removes the usual downside amplifier. "The Company had no outstanding borrowings under the Revolving Loan Facility as of July 31, 2025 and July 31, 2024." Against that, cash, equivalents and restricted cash of 2.8 billion dollars sat on the books at the last fiscal year end together with about 2.0 billion dollars of held-to-maturity securities. There is no refinancing date to survive and no covenant to trip. What a buyer is underwriting at this price is therefore narrow and specific: not solvency, not leverage, but whether the fee stream on other people's totalled cars keeps compounding at a mid-single-digit pace for another five years.

Catalysts

The most informative recent development is a change in how sellers transact rather than a headline event. Over the nine months ended April 30, 2026, vehicle sales revenue fell, and the company attributes it to "a decrease in volume related to sellers switching to a consignment model marginally offset by an increase in revenue per car, which was due to a change in mix of vehicles sold". Under consignment the company sells the car for the owner and books a fee rather than the gross proceeds, so reported revenue falls while the economics can improve. Anyone tracking the top line without that context will read the trend wrong.

The underlying volume picture is genuinely softer, though. Service revenue also declined across the same nine months, driven by lower volume and partly offset by higher revenue per car in the United States. International ran the other way, with growth driven by both volume and revenue per car after excluding positive currency movements of $8.7 million. Two segments moving in opposite directions is the near-term story, and the split matters because the domestic business is much the larger of the two.

For the medium term, the variable to follow is the one the company itself flags: the relationship between used car values and repair costs, which together determine how often insurers total a vehicle rather than fix it. The filing notes that the average age of cars on the road has continued to rise, which works in the company's favour over time, while also warning that anything making it "less economical for insurance company sellers to declare a vehicle involved in an accident a total loss, could also have a material impact on revenue growth". Capacity, meanwhile, keeps expanding through facility development and acquisition, a process the company has run for decades and which it links directly to market share gains in its core salvage remarketing business.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• OPLN (OPENLANE, Inc.)
• FY2025 10-K: …advantage could be threatened and our business and results of operations could be adversely impacted. We face significant competition for the supply of used vehicles, the buyers of those vehicles and the floorplan financing of these vehicles. Our principal sources of competition primarily come from: (i) large,…
• FY2025 10-K: …their operations. This segment structure reflects the financial information used by our CODM to make decisions regarding the business, including resource allocations and performance assessments. The Company's method for measuring profitability on a reportable segment basis is operating profit (loss). The CODM…
• KMX (CARMAX, INC.)
• FY2025 10-K: …risks. BUSINESS RISKS We operate in a highly competitive industry. Failure to develop and execute strategies to remain the nation's largest retailer of used vehicles and to adapt to the increasing use of digital and online tools to market, buy, sell and finance used vehicles could adversely affect our business, sales…
• FY2025 10-K: …of which facilitate increased competition. Based on industry data, there were approximately 38 million used cars sold in the U.S. in calendar 2024, of which approximately 20 million were estimated to be age 0- to 10-year old vehicles. We are the largest retailer of used vehicles in the U.S. In calendar 2024, we…
• CVNA (CARVANA CO.)
• FY2025 10-K: …and further investing in our patented vending machines. Competition With tens of thousands of automotive retailers in the U.S., the used car marketplace is a highly fragmented and highly competitive industry. We believe the primary competitive factors in this market include transparency, convenience, price,…
• FY2025 10-K: …included in Part II, Item 8, "Financial Statements and Supplementary Data," of this Annual Report on Form 10-K the "Ally MPSA"), and through fixed pool loan sales, with financing partners who generally acquire them at premium prices without recourse to us for their post-sale performance. Factors affecting revenue…
• ABG (ASBURY AUTOMOTIVE GROUP, INC.)
• FY2025 10-K: …in automobile sales and services may have a material adverse effect on our results of operations. The automotive retail and service industry is highly competitive with respect to price, service, location, and selection. Our competition includes: (i) franchised automobile dealerships in our markets that sell the same…
• FY2025 10-K: …the same or an affiliated landlord under a cross-default provision, (ii) eviction from the premises; and (iii) the landlord having a claim for various damages. 20. SEGMENT INFORMATION As of December 31, 2025, the Company had two reportable segments: (1) Dealerships and (2) TCA. Our dealership operations are organized…
• GPI (Group 1 Automotive, Inc)
• FY2025 10-K: …highest return opportunities. We evaluate all capital uses - including acquisitions, capital expenditures, share repurchases, dividends, debt reduction, real estate investments and organic growth - through a consistent return-based framework. Our acquisition strategy focuses on high-quality dealerships and brands in…
• FY2025 10-K: …as auto brokers, leasing companies and internet companies that provide referrals to, or broker vehicle sales with other dealerships or customers. Our principal new vehicle dealer competitors also have franchise agreements with the various vehicle manufacturers and, as such, generally have access to new vehicles on…
• SAH (SONIC AUTOMOTIVE, INC.)
• FY2025 10-K: …and related businesses. Automotive retailing is a highly competitive business. Our competitors include publicly and privately owned dealerships, some of which are larger and have greater financial and marketing resources than we do. Many of our competitors sell the same or similar makes and models of new and used…
• FY2025 10-K: …In general, these statutes make it unlawful for a manufacturer or distributor to compete with a new motor vehicle dealer in the same brand operating under an agreement or franchise from the manufacturer or distributor in the relevant market area. Certain states, including Florida, Georgia, North Carolina, South…
• AN (AUTONATION, INC.)
• FY2025 10-K: …vehicle brand, and generally need the manufacturer to approve any relocation or the grant of a new franchise. However, to the extent that a market has multiple dealers of a particular vehicle brand, as most of our key markets do with respect to most vehicle brands we sell, we face significant intra-brand competition.…
• FY2025 10-K: …to expand our footprint and increase scope and scale through both the acquisition of new dealerships and franchises. We face competition from 8 Table of C ontents (i) several public companies that operate numerous automotive retail stores or collision centers on a regional or national basis, including franchised…
• RUSHA (RUSH ENTERPRISES, INC.)
• FY2025 10-K: …has become an increasingly competitive factor in the industry. The ability to provide such service requires a significant capital investment in diagnostic and other equipment, parts inventory and highly trained service personnel. EPA and Department of Transportation regulatory guidelines for service processes,…
• FY2025 10-K: …that comply with applicable emissions requirements, labor strikes or similar disruptions (including within their major suppliers), rising raw materials costs, rising employee benefit costs, adverse publicity that may reduce consumer demand for their products (including due to bankruptcy), product defects, vehicle…

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.