CPRT: Digital Auction Strength Will Outweigh Insurance And Market Share Headwinds

Analysts have modestly trimmed their price target on Copart, lowering fair value by about $1.33 to roughly $48.89 as they factor in persistent insurance headwinds and potential share loss risk, despite resilient digital auction fundamentals.

Analyst Commentary

Street research on Copart reflects a divided view, with bullish analysts highlighting resilient business fundamentals and upside to fair value, while bearish analysts focus on insurance related volume pressure and potential market share erosion that could cap near term growth.

Bullish Takeaways

Bullish analysts maintain positive ratings and see room for upside to current trading levels, even after trimming price targets to reflect a more conservative macro and insurance backdrop.
Updated models still point to solid revenue and earnings growth, supported by the structural shift toward digital auction marketplaces. These are expected to continue gaining share from traditional physical auctions over time.
Higher price targets in some cases, despite sector wide caution, suggest confidence that Copart can execute through cyclical headwinds and ultimately re rate as volumes normalize.
The long term growth outlook for online salvage and remarketing platforms underpins the view that near term valuation pressure may present an opportunity for investors with a longer investment horizon.

Bearish Takeaways

Bearish analysts emphasize persistent insurance headwinds, including elevated uninsured rates. These are weighing on insured loss volumes and limiting the pace of unit growth flowing through Copart auctions.
Concerns around "market share evolution" point to the risk that Copart could cede some share in key channels, pressuring top line momentum and challenging the premium multiple the stock has historically commanded.
Initiations and resets at lower price targets signal skepticism that the current valuation fully discounts execution risks, particularly if insurance volumes stay subdued longer than expected.
Sector views remain mixed, and some analysts prefer other auto retail and auction names that they see as offering stronger shareholder return profiles and more balanced risk reward relative to Copart.

What's in the News

Copart and One Inc. announced a collaboration to integrate ClaimsPay with Copart's Title Express and Loan Payoff system, digitizing lienholder payments on total loss vehicles to accelerate title clearance and remarketing for insurers and lenders (Key Developments).
The new integration enables insurance carriers to initiate lienholder payments directly from their core systems or Copart's platform, using VIN based matching and real time updates to reduce errors and manual processing in claims workflows (Key Developments).
Copart reported that, as of October 31, 2025, it has completed repurchases totaling 458,196,792 shares, or 33.27% of shares, for $1,381.44 million under its long running buyback program first announced in 2003, with no additional shares repurchased in the latest August to October 2025 tranche (Key Developments).
Earlier, for the May to July 2025 tranche, Copart also reported no incremental share repurchases, confirming that the previously disclosed 458,196,792 shares bought back under the program represent the final tally under the authorization (Key Developments).

Valuation Changes

Fair Value: trimmed modestly from about $50.22 to $48.89, reflecting a slightly more cautious outlook on Copart's intrinsic worth.
Discount Rate: effectively unchanged at roughly 6.96 percent, indicating a stable risk assessment and cost of capital assumption.
Revenue Growth: held essentially flat at around 7.51 percent, signaling no material change in long term top line growth expectations.
Net Profit Margin: marginally reduced from about 33.24 percent to 33.24 percent, implying only a negligible adjustment to long run profitability assumptions.
Future P/E: lowered from roughly 31.32x to 30.52x, suggesting a slightly less generous valuation multiple applied to Copart's forward earnings.

International expansion, digital innovation, and rising demand for sustainable vehicle recycling are strengthening Copart's market position and opening new higher-margin revenue opportunities.
Growth in value-added services and increasing vehicle complexity are driving higher ancillary revenues, operational efficiencies, and enhanced profitability.
Technological advances, insurance trends, rising costs, growing competition, and reliance on insurers all threaten Copart's auction volumes, pricing power, and overall profitability.

Catalysts

About Copart

Provides online auctions and vehicle remarketing services in the United States, Canada, the United Kingdom, Brazil, the Republic of Ireland, Germany, Finland, the United Arab Emirates, Oman, Bahrain, and Spain.What are the underlying business or industry changes driving this perspective?

Copart is positioned to benefit from the ongoing global growth in vehicle ownership-particularly in emerging markets and via international expansion-driving higher long-term unit volumes and revenue growth potential.
Accelerating digital adoption in vehicle auctions and heavy investment in proprietary, AI-enabled platforms are expected to enhance Copart's competitive advantage in transaction efficiency, supporting higher net margins and greater buyer/seller engagement.
Rising demand for sustainable vehicle recycling and parts reuse, as well as Copart's growing role in the automotive circular economy, is likely to increase salvage recovery rates and open up new, higher-margin revenue streams.
Increasing vehicle complexity and repair costs (from advanced safety and electrification features) are driving higher total loss frequency, expanding Copart's addressable inventory pool and supporting higher average selling prices, benefiting both revenue and operating income.
Expanding value-added services-such as title processing, transportation, and loan payoff support-are increasing ancillary revenues and improving EBITDA margins, underpinning the company's ability to grow earnings ahead of core unit volumes.

Copart Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Copart's revenue will grow by 11.1% annually over the next 3 years.
Analysts assume that profit margins will increase from 33.4% today to 33.7% in 3 years time.
Analysts expect earnings to reach $2.1 billion (and earnings per share of $2.18) by about September 2028, up from $1.6 billion today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 31.5x on those 2028 earnings, up from 29.9x today. This future PE is greater than the current PE for the US Commercial Services industry at 25.7x.
Analysts expect the number of shares outstanding to grow by 0.4% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.83%, as per the Simply Wall St company report.

Copart Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Declining accident frequency due to ongoing improvements in vehicle safety technologies (such as anti-lock brakes, ADAS, and eventual autonomous vehicles), reducing the long-term pool of vehicles available for salvage auction, which may dampen Copart's future auction volumes and revenue growth.
A structural increase in underinsurance and drivers foregoing insurance coverage, particularly in response to rising insurance premiums, could cause more damaged vehicles to bypass the insurance total loss funnel and Copart auctions altogether, impacting future unit assignments and fee-based revenue.
Rising operational and facility-related costs, including expanding operational capacity and technology investments, may pressure net margins if volume or revenue growth slows due to any of the above headwinds or from a shift in insurance or noninsurance partner behavior.
Increased competition from alternative channels (repair shops, new digital auction platforms, insurance carriers or manufacturers pursuing direct disposal), as well as possible repair technology advances decreasing total loss frequency, may compress Copart's market share, pricing power, and ultimately revenue and earnings.
Heavy dependence on large insurance industry relationships, with any margin pressures, consolidation, or competitive shifts in the insurance sector empowering insurers to negotiate lower fees or shift more claims toward repair instead of salvage, posing a long-term risk to Copart's earnings and net margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $56.625 for Copart based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $65.0, and the most bearish reporting a price target of just $46.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $6.4 billion, earnings will come to $2.1 billion, and it would be trading on a PE ratio of 31.5x, assuming you use a discount rate of 6.8%.
Given the current share price of $48.07, the analyst price target of $56.62 is 15.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Copart?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Digital Tools And Ecosystem Partnerships Will Shape Automotive Industry Outlook