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.