Copart, Inc.Full report →1 / 15
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Copart, Inc.

Copart runs the dominant online salvage-car auction in the United States, charging fees to insurers and buyers on a flow of totaled vehicles it never owns, and earning a 36% operating margin with almost no debt.

After compounding for a decade, the shares peaked near $63.84 in May 2025 and closed fiscal 2026 at $29.12 — a 54% fall that landed on the multiple, not the earnings.
Mkt cap $28.5BP/E FY27E 17.3×
$29.12
Share price
$4.65B
Revenue (FY2025)
36.5%
Operating margin
81%
Units from insurers
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Snapshot

Copart, Inc. in numbers

Price
$29.12as of 2026-07-31
Mkt cap
$28.5B
12m perf
−35.8%
3m ADV
$358.1M
Year to Jul (USD)2023202420252026E2027E2028E
Sales–––4.6B4.8B5.2B
EBITDA1.6B1.8B1.9B1.9B2.0B2.2B
EBIT1.5B1.6B1.7B1.7B1.8B1.9B
EBIT margin–––36.3%36.6%36.2%
EPS1.281.401.591.581.681.85
P/E22.8×20.8×18.3×18.4×17.3×15.7×
FCF yield3.0%3.4%4.3%4.7%4.7%5.3%
Consensus: S&P Capital IQ (CapIQ) · as of 2026-08-03Derived from run data; ratios use the latest price.
IThe business
How it earns

Copart runs the auction, not the car lot

FY2025 revenue by type
Service fees were 85% of FY2025 revenue; purchased cars, mostly U.K., the rest.
  • An agent, not an owner. An insurer totals a car and hands it to Copart, which sells it through its online auction and books the fee, not the vehicle's price. Insurers supplied 81% of units in FY2025.
  • Paid on both sides. Sellers pay listing, storage, transport and title fees; buyers pay bidding fees. The flagship seller deal takes a set percentage of the hammer price, so Copart's revenue rises with the sale.
  • A global buyer pool. Roughly 300,000 paying members bid from nearly every non-sanctioned country, with international buyers taking about 40% of U.S. vehicles and close to half the proceeds.
Unit economics

The fee line does the work; the mature U.S. network funds the rest

Margin by segment and revenue line (FY2025)
Where the money isMargin
U.S. auctions — operating38.4%
International — operating27.3%
Purchased cars — gross~11%
Purchased cars run near an 11% gross margin; the agency fee line drops most of the way to profit.
  • Two revenue lines, unlike economics. Fees are booked net and carry almost no matched cost; the 15% of revenue that is purchased cars is a low-margin pass-through. Benchmarking Copart's revenue against a car retailer compares a fee to a sticker price.
  • Domestic subsidises overseas. U.S. operations earned a 38.4% operating margin in FY2025 versus 27.3% internationally, so the mature home network carries a still-scaling foreign footprint.
  • High returns on real capital. Strip the idle cash from the base and the operating business earns roughly 30% on the yards and receivables it actually uses.
The moat

Margins run more than double the only scaled rival's

Operating margin: Copart vs RB Global
Copart fiscal year (ends July); RB Global calendar year and blends IAA salvage with commercial-asset auctions.
  • The advantage shows up in price. The auction that clears the highest price wins the seller, because sellers are paid on the price — and management says its selling prices have outrun the used-car index by a wide margin.
  • Liquidity, land and workflow. Two decades of global buyer registration, permitted salvage yards that towns are slow to zone, and integration into insurers' claims systems all raise the cost of leaving.
  • The open question is volume, not margin. Whether recently soft U.S. assignment volume is a claims cycle or the start of share loss to IAA is the live test, taken up later.
IIThe record
The record

Revenue grew 73% in five years — every dollar from the fee line

Revenue by type ($B)
Purchased-vehicle sales have been flat near $0.65–0.68B since FY2022; all growth is fees.
  • Two engines drove it. More insurance vehicles flowing in each year, sold at rising auction prices — the price half tracks a total-loss frequency that has climbed from about 15.6% in 2015 to 23.1% in 2025.
  • The business voted with its contracts. U.K. sellers keep migrating off the purchased-car model onto consignment, shrinking the low-margin book, because the agency model is where the economics live.
  • Not truly asset-light. The costs behind that fee line are 281 physical yards of land and labour, which is where the recent margin give-back came from.
The record

Operating margin has slipped every year since the 2021 peak

Operating margin (%)
Down 5.7 points from the FY2021 peak, with revenue up 73% across the same window.
  • Cost, not demand. Revenue kept compounding; facility operations rose from 39% of revenue in FY2023 to 42% in FY2025 as Copart added yards, staffed for catastrophes and invested in technology.
  • The 2021 peak flattered the base. Pandemic-era auction prices were unusually high against a lean cost structure, so part of the drop is a return to normal rather than erosion.
  • Growth, not dollars, is the cost. Because revenue rose through the cost build, the margin give-back has cost shareholders faster compounding rather than absolute profit.
Capital allocation

A fortress balance sheet that earned a Treasury yield for years

~30%
Return on the operating business
3.7%
Yield on the $4.8B cash pile
$1.63B
FY2026 buyback — first in six years
  • The engine converts to cash. FY2025 free cash flow was $1.23B on $1.80B of operating cash flow — near 80% of net income — on a balance sheet with $4.8B of cash and Treasury bills and essentially no debt.
  • The hoard has a cost. That cash earned about 3.7% while the operating business earned roughly 30%, the gap the report calls the cash question. Net interest income of $179M now supplies about a tenth of pre-tax profit.
  • The pattern broke in FY2026. After buying nothing for six years, Copart repurchased $1.63B of stock at $37.63 — an opportunistic tool firing after the price halved, not a new dividend or a formal program.
IIIThe story now
What changed

The 54% fall repriced the multiple, not the earnings

Peak May 2025 to fiscal year-end 2026, while diluted EPS rose from $1.40 to $1.59.
  • The finding. The 54% drawdown re-rated Copart's earnings multiple from roughly 38x to 18x while EPS kept rising, so the entire fall is the market repricing growth, not the business missing it.
  • The counter-fact, in the same breath. With FY2026 EPS and revenue essentially flat, that lower multiple could be a fair price for slower growth rather than a discount on an unchanged one.
  • Where it sits now. At $29.12 the stock trades at 18.3x trailing earnings and a 4.3% free-cash-flow yield — a decade low reached almost entirely through multiple compression.
What's happening now

Volume stalled while auction prices set records

U.S. insurance units, YoY change (%)
Stripping prior-year hurricanes and reclassified low-value units, the underlying decline narrowed through the year.
  • The engines decoupled. U.S. insurance unit volume fell every quarter of FY2026, but average selling prices rose 8.4%, 6% then 4.1% — enough to hold the fee line close to flat.
  • Softness looks cyclical. Assignments handed to Copart fell only low single digits, and management ties the drop to fewer claims as drivers pare coverage — earned car years fell about 4% while the fleet grew.
  • Price leans on foreign demand. International buyers repricing damaged U.S. cars keep Copart's clearing prices above the normalizing used-car index — a real offset, but one exposed to currency and trade.
The live debate

A claims cycle, or share slipping to a re-energized IAA

Salvage units ex-CAT, YoY change (%)
If the driver were only a shrinking industry, the two salvage platforms would move together. They are not.
  • The rival tells the opposite story. IAA grew automotive units about 8% ex-catastrophe for a fourth straight quarter above the market, naming new account wins including a multi-year deal with a top partner.
  • Both readings hold. The ex-catastrophe decline is narrowing, which fits a cycle troughing; yet IAA's run is hard to square with zero share movement, so Copart is likely ceding some marginal assignment share.
  • What decides it. A claims cycle reverses; a share step-down does not. Watch whether Copart's assignments turn mid-single-digit negative and whether the ex-catastrophe decline keeps easing toward flat.
IVThe price
Valuation

Cheap against its own history, still the richest in its group

Fiscal year-end P/E (x)
18.4x sits roughly two-fifths below Copart's own five-year average.
  • 18x a fortress compounder is not demanding. The multiple has fallen most of the way from a high-growth rating to a steady-growth one without the earnings following it down.
  • But the cash does less than it looks. Netting roughly $4.2B of cash lowers the operating multiple only about one turn to 17.5x, because that cash also throws off nearly $179M of interest income.
  • Still priced above peers. The 4.3% free-cash-flow yield sits below the 5.4% salvage-and-remarketing median — the auction platform kept the group's richest cash multiple even after halving.
Scenarios

The gap between $23 and $55 is the unit-growth question

Illustrative value per share
Illustrative arithmetic anchored to the reported base and the $26–$55 sell-side spread.
  • Consensus lands near $38. The normalization path — fleet keeps aging, margin stops falling — implies about a 31% gain and requires nothing heroic.
  • The reward is asymmetric. At 18x flat earnings the price sits closer to the reset case than to consensus, so a cyclical outcome pays more than the structural one already priced costs.
  • A cash floor underneath. Roughly $4.40 per share of net cash — about 15% of the price — cushions the downside in every path.
Street and risk

Analysts see upside; one tail the filings leave uncosted

$40.30
Mean analyst target (+38%)
$4.40
Net cash per share (~15% of price)
Uncosted
DOJ money-laundering probe, no accrual
  • Sell-side leans constructive. The mean target of $40.30 and median $41.00 sit about 38–41% above $29.12, implying a re-rating back toward 24x FY2027 consensus EPS of $1.68.
  • The tail attacks the price engine. An open DOJ probe into money-laundering controls for auction members carries no accrual; a remedy constraining foreign onboarding or export would hit the international buyers behind record prices.
  • Not a deep-value case. The business is unimpaired and the balance sheet a fortress, but the operating engine is only about one turn cheaper for the cash and needs unit growth to reaccelerate for the re-rating to land.
What to watch

A fortress compounder repriced to a steady grower: cheap against its own history, fair if growth has stepped down.

Read the full report →

This distills a guided study of Copart built chapter by chapter — what it is, what it has done, what is happening now, and what the market asks you to pay.

Compiled from the full report · 2026-08-03 · For information, not investment advice.