Copart’s 200-plus-yard moat and rising total-loss frequency support a compelling recovery case, while domestic insurance losses, cost inflation, and ACV integration make near-term execution the key test.
Overview
Copart operates a global digital vehicle auction and remarketing marketplace, linking institutional sellers—especially auto insurers—with buyers in more than 190 countries. Its differentiated model combines the VB3 auction platform with more than 200 physical yards, vehicle towing and storage, title clearing, and post-sale logistics. Service fees contribute about 85% of revenue and carry higher gross margins than purchased-vehicle resales. **The structural volume thesis is supported by record total-loss frequency of 23.3% in early 2026**, versus a historical 15–18%, as repair severity exceeded $6,300 per claim. Yet FY2026 ended with near-term pressure: revenue was $4.67 billion, up 0.4%; Q4 revenue rose 2.4% to $1.15 billion, while Q4 EPS fell 14.6% to $0.35 and missed consensus. Domestic insurance assignments dropped 7.5%, although international revenue grew 11.7%. At about $26.27, the stock traded at 17.0x trailing earnings and 16.6x forward FY2027 earnings, near multi-year valuation lows. The $1.9 billion ACV deal broadens the opportunity but is expected to be neutral to FY2027 earnings and accretive in FY2028. The report’s probability-weighted five-year target is $55.23; Q1 FY2027 results in mid-November 2026 are the next key catalyst.