Key Stats for Copart Stock
- Current Price: ~$34 (May 22, 2026)
- Q3 FY2026 Revenue: $1.24B, +2.1% YoY
- Q3 FY2026 EPS (Diluted): $0.43, +2.4% YoY
- Global Gross Profit: $572.6M, +3.7% YoY
- Global Gross Margin: 46.3%, +71bps YoY
- Operating Income: $464.3M, +2.8% YoY
- YTD Share Repurchases: 43.4M shares for $1.6B
- TIKR Model Price Target: ~$55
- Implied Upside: +61%
Copart Beats Q3 Estimates With Record Insurance ASPs While Unit Volumes Slip
Copart stock (CPRT) reported Q3 fiscal year 2026 revenue of $1.24B, up 2.1% year-over-year, beating Street estimates of $1.20B while global insurance unit volumes declined 2.7%. Average selling prices rose 4.6% globally and more than offset the unit shortfall, with U.S. insurance ASPs reaching a seasonally adjusted all-time record high for the quarter.
EPS came in at $0.43 per diluted share, up 2.4% year-over-year and ahead of the $0.41 Street estimate.
Global gross profit grew 3.7% to $572.6M, with gross margins expanding 71 basis points to 46.3%.
Operating income reached $464.3M, a 2.8% increase year-over-year, reflecting an operating margin of 37.5%.
On the insurance volume decline, Leah Stearns, CFO, noted on the Q3 FY2026 earnings call that “global insurance unit sales declined 2.7% or 1.9% excluding the effect of catastrophic volumes from a year ago.” A portion of the shortfall reflects shifts in insurance policy-in-force mix among carriers, while consumer pullback on coverage played an equally visible role. Earned car years declined 4% year-over-year in the fourth calendar quarter of 2025 against a vehicle fleet that grew 1.4%, per ISS Fast Track data cited by CEO Jeffrey Liaw.
The international segment offset some U.S. pressure. International revenue grew 14.1% to $234.2M, driven by insurance unit growth of 4.6% and noninsurance unit growth of 11.2%. Gross profit in the international segment increased 21.9%, and international operating income reached $73.8M at a 31.5% margin.
On the noninsurance side, dealer services and powersports grew units 1%, the BluCar commercial consignment channel expanded over 4%, and combined fleet and finance seller volume grew at a double-digit pace. Purple Wave gross transaction value grew more than 25% over the last 12 months. Copart repurchased 43.4M shares year-to-date for an aggregate $1.6B.
Gross Margins Hit a Multi-Quarter High as ASP Growth Carries the Revenue Line
Copart’s income statement over the past eight quarters shows a business that has absorbed volume pressure through pricing power, with gross margins oscillating in a band that just touched a cycle high.
Revenue has trended between $1.07B and $1.24B over the past eight quarters. The Q3 FY2026 print of $1.24B is the highest in that range, though the trajectory has not been a straight line. Revenue fell to $1.12B in Q2 FY2026 before recovering. Year-over-year growth decelerated from 14.0% in Q2 FY2025 to just 2.1% in Q3 FY2026, with one quarter of negative growth (-3.6%) in Q2 FY2026.
Gross margins tell a more favorable story. Gross margin hit 43.2% in Q1 FY2025, moved up to 44.7% and 45.2% in the following two quarters, peaked at 49.6% in Q4 FY2025, then moderated to 46.1% and 46.5% before a brief dip to 43.9% in Q2 FY2026. The Q3 FY2026 print of 50.5% is the highest in the eight-quarter window.
Operating margins have followed a tighter range. The sequence from Q1 FY2025 through Q3 FY2026 reads: 33.6%, 35.4%, 36.6%, 37.3%, 36.7%, 37.3%, 34.7%, 37.5%. The Q3 FY2026 figure of 37.5% matches the prior cycle high and represents a sharp recovery from Q2 FY2026’s 34.7% reading.
Operating income for Q3 FY2026 came in at $464M, up from $452M a year ago and recovering from $388M in Q2 FY2026.
Total operating expenses remained disciplined. SG&A held at $100M for the quarter. Stearns noted on the Q3 FY2026 call that the long-haul delivery product generated about $15M of year-over-year cost increase in facility operations, a drag partially offset by the margin that product generates at the revenue line.
TIKR’s $55 Target on Copart Stock Requires Steady Margin Expansion Into a Volume Recovery
TIKR’s mid-case valuation model prices Copart, Inc. stock at $54.54, implying 61.4% total return from the current price of ~$34. The model assumes a revenue CAGR of 5.8%, a net income margin of 36.5%, and EPS growth of 7.4% annually through the forecast period.
Embedded in the mid-case is a P/E multiple compression assumption of 3.1% per year, meaning the Copart stock target is reached despite a shrinking multiple, not because of expansion.
Copart stock lands at an inflection point after this Q3 print: ASP growth is carrying the income statement, but insurance unit volumes remain negative and U.S. inventory declined 4.7% year-over-year, limiting the near-term revenue ceiling without a volume recovery.
TIKR’s low case prices Copart stock at $53.42 with a 5.7% annualized return, the outcome if revenue grows at a 5.2% CAGR and net income margins hold at 34.4% while the multiple compresses 4.3% per year.
The mid case reaches $67.04 at an 8.7% IRR, built on a 5.8% revenue CAGR and 36.5% net income margins, with P/E compressing at 3.1% annually and the insurance volume recovery materializing as the claims frequency cycle turns.
The high case pushes Copart stock to $82.79 at an 11.6% annualized return, requiring a 6.3% revenue CAGR and 38.6% net income margins alongside a slower multiple compression rate of 2.1% per year.
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