Copart (CPRT): Rethinking Valuation After a Recent Pullback in the Share Price

Copart (CPRT) has quietly slid over the past few months, with the stock down about 8% for the month and roughly 20% in the past 3 months, despite steady revenue and earnings growth.

See our latest analysis for Copart.

Zooming out, that recent slide sits within a tougher stretch, with the share price down sharply year to date even as the three and five year total shareholder returns are still comfortably positive. This suggests long term momentum has not fully broken.

If Copart’s pullback has you rethinking where growth and conviction overlap, this could be a good moment to explore auto manufacturers as another way to play the vehicle ecosystem.

With Copart now trading at a double digit discount to analyst targets despite solid mid single digit revenue and earnings growth, is this pullback a genuine value entry point, or is the market already discounting its future runway?

Most Popular Narrative Narrative: 22.9% Undervalued

With Copart’s last close at $38.72 versus a narrative fair value near $50, the story assumes today’s weakness masks a stronger earnings and margin path ahead.

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.

Read the complete narrative.

Curious what kind of revenue runway and margin profile justify that future earnings power and a premium multiple to the broader sector? The narrative leans on a tightly modeled growth glidepath, incremental profitability gains, and a valuation multiple that assumes Copart keeps compounding as a structurally advantaged digital marketplace. Want to see exactly which assumptions have to hold for that upside to materialize?

Result: Fair Value of $50.22 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside case could unravel if accident and total loss volumes fall faster than expected or if insurers push more aggressively toward direct disposal channels.

Find out about the key risks to this Copart narrative.

Build Your Own Copart Narrative

If you see the story differently or want to stress test the assumptions yourself, you can build a personalized Copart view in just minutes: Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Copart.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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