Key Stats for Copart Stock
- Price Change: +3.1%
- Current Price: $40
- Advanced Model Target: $53
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What Happened?
Shares of Copart, Inc. (CPRT) gained 3.1% to close at $40 on Wednesday following a solid first-quarter earnings report that reassured investors.
The company reported revenue growth of 9.7%, driven by higher salvage volumes and continued expansion in international markets.
Management highlighted its pristine balance sheet, which now holds a net cash position of over $5.1 billion, providing massive optionality for M&A.
Analysts at Jefferies maintained a Buy rating with a $55 target, citing the company’s unmatched “moat” in the salvage auction duopoly.
Meanwhile, Goldman Sachs reiterated a Neutral rating, focusing on the near-term normalization of used car prices which could pressure margins.
Sector peers like IAA, Inc. (NYSE:IAA) are also navigating the post-pandemic reset in total loss frequencies, but Copart remains the clear market leader.
Despite a 30.6% price drop over the last year, the firm continues to generate elite returns on capital, with an LTM Return on Equity of 18.1%.
See analysts’ growth forecasts and price targets for Copart stock (It’s free!) >>>
Is Copart Undervalued Today?
During the Q1 earnings call, Co-CEO Jeff Liaw emphasized the company’s disciplined approach to capital allocation.
He stated: “We still treat each dollar as though it’s as precious as the last… our capital spending and M&A activities should reflect that.”
Regarding the potential for future share repurchases, given the massive cash pile, management signaled a patient but opportunistic stance.
He noted: “We know it ultimately belongs to shareholders… There, for sure, will come a day we do that again.”
The leadership team believes that long-term salvage trends, such as increasing vehicle complexity, will continue to drive total loss frequency higher through 2026.
Read the full Copart Transcript on TIKR to see the $5 billion cash strategy >>>
According to TIKR’s Advanced Valuation Model, the recent 30.0% sell-off has created a rare opportunity to acquire a high-quality compounder at a discount.
- Target Price: $53
- Current Price: $40
- Potential Upside: +32.2%
Valuation Model Deep Dive
The investment case for Copart centers on its “toll booth” business model and its ability to reinvest capital at high rates of return.
The model suggests that the market is currently pricing the stock as if its growth days are over, despite a clear path to 6.4% annualized returns.
- The Fair Value Gap: At $40, the stock is trading well below its $53 intrinsic value, offering a compelling 32.2% total return potential over the next four years.
- The Growth Reality: The model assumes a 4.9% Revenue CAGR, which data suggests is conservative given the company’s historical double-digit growth rates.
- The Profitability Check: The model targets a 33.8% Net Income Margin, reflecting the company’s elite operating leverage and land ownership advantage.
If Copart deploys its $5 billion war chest into strategic acquisitions or aggressive buybacks, the gap to $53 could close rapidly.
Conclusion: The salvage king is on sale for 2026. With a 32.2% upside potential and a model pointing to $53, Copart stock offers a resilient mix of fortress-like financial strength and consistent growth through 2026.
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How Much Upside Does Copart Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
