Copart (NasdaqGS:CPRT) - Share price, News & Analysis

Q: What is the Fair Price of CPRT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CPRT ($130.39) is trading below our estimate of [[fair value]] ($146.88)

CPRT fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	5/6
Financial Health	6/6
Dividends	0/6

CPRT Stock Overview

Rewards

Trading at 11.2% below our estimate of its fair value

Earnings are forecast to grow 7.85% per year

Earnings grew by 27.9% over the past year

Risk Analysis

No risks detected for CPRT from our risk checks.

Copart Competitors

Cintas

NasdaqGS:CTAS

US$44.6b

Ritchie Bros. Auctioneers

NYSE:RBA

US$7.9b

IAA

NYSE:IAA

US$5.0b

UniFirst

NYSE:UNF

US$3.7b

Price History & Performance

Summary of all time highs, changes and price drops for Copart
Historical stock prices
Current Share Price	US$130.39
52 Week High	US$161.12
52 Week Low	US$102.21
Beta	1.15
1 Month Change	7.40%
3 Month Change	16.31%
1 Year Change	-5.23%
3 Year Change	71.03%
5 Year Change	310.29%
Change since IPO	21,297.37%

Recent News & Updates

Aug 16

At US$131, Is It Time To Put Copart, Inc. (NASDAQ:CPRT) On Your Watch List?

Copart, Inc. ( NASDAQ:CPRT ) received a lot of attention from a substantial price increase on the NASDAQGS over the...

Aug 04

Copart (NASDAQ:CPRT) Has A Rock Solid Balance Sheet

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Jul 11

Why You Should Care About Copart's (NASDAQ:CPRT) Strong Returns On Capital

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. In a perfect...

Jul 06

Copart: Online Automotive Auction Market Leader

We believe Copart’s revenue growth at a 5-year projection of 14.4% could be supported by its solid market leadership in the online automotive market (37.7% market share) and scale against. Moreover, we expect its revenue growth to remain driven by its US segment (13.6%) which had a higher average revenue growth than its international segment (9.9%). Lastly, we believe the company could continue to maintain its solid profitability with the highest margins compared to its competitors due to its market leadership, network and scale. Copart In this analysis, we analyzed Copart, Inc. (CPRT), the online automotive auction company, and its market positioning compared to its competitors IAA (IAA), KAR Auction Services (KAR), and ACV Auctions (ACVA). We also determined whether it has a competitive advantage by comparing its number of locations and facilities size relative to its competitors. Moreover, we then examined its revenue breakdown by its U.S. and international segment to analyze its growth as it expanded into overseas markets. Finally, we compared the company with its competitors in terms of profitability including gross, net and FCF margins to determine whether it has an advantage over competitors. Solidifying Market Leadership of Online Automotive Auction Market The automotive auction market is split into whole car auctions and salvage auctions according to Report Linker. S&P Global Mobility data showed that the average age of used vehicles had increased over the past decade to 12.2 years in 2022 from 10.9 years in 2011, an increase of 12%. Additionally, the total loss as a percentage of total claims had increased from 14.1% in 2013 to 18% in Q1 2022 according to IAA’s investor presentation. We believe this could benefit vehicle auction companies including Copart in terms of supply. Moreover, in terms of demand, the used car market is forecasted to grow at a CAGR of 6.1% through 2030 to Grand Market Research. Additionally, the motor vehicle parts market is forecasted by the Business Research Company to grow at a CAGR of 9.1% through 2026. Thus, we believe the market for used cars and auto parts could benefit automotive auction companies like Copart. Additionally, the scrap metal recycling market is forecasted to grow at 5.5% CAGR to 2031 fueled by the limited availability of earth metals according to Fact.MR. Also, the Bureau of International Recycling stated that 40% of steel production is made from scrap metal which highlights its importance of it in metal production. Based on this, we believe this could benefit the automotive auction market with an increase in demand for scrap metal. Based on its annual report, Copart provides a platform for sellers to dispose of or liquidate vehicles to domestic or international buyers. The majority of Copart’s sellers are insurance companies, which consisted of 77% of the total number of vehicles processed in FY2021. Besides that, Copart sources from banks, finance companies, charities, fleet operators, dealers, vehicle rental companies and individuals Copart’s largest group of vehicle buyers are vehicle dismantlers, who sell to used car dealers, rebuilders or consumers. Furthermore, vehicle rebuilders and vehicle repair licensees purchase salvage vehicles to repair and resell, while used vehicle dealers purchase recovered stolen or slightly damaged vehicles for resale. Its end consumers are consumers for personal use and manufacturers. Overall, we summarized the buying and selling process of auctioned vehicles of Copart in the chart below. Copart, Khaveen Investments Next, we calculated the company’s market share in the US-based on selected companies in the Online Automotive Auction Market including IAA, KAR and ACV. Copart is the market leader with a 37.7% market share among the 4 companies. Motor vehicle salvage dealers are required to go through complicated processes such as obtaining salvage dealer licenses and demonstrating compliance with certain environmental regulations. Thus, we believe there is a high barrier to entry into the market. Company Data, Khaveen Investments Furthermore, in the comparison with its competitors, Copart has the highest 9-year average revenue growth rate of 13%, compared to IAA at 11% and KAR at 7%. In addition to its superior revenue growth, it has the highest number of locations (370) and size (9,500 acres), the highest among its competitors. Company Number of yards/ locations Total Acres 9-year Average Revenue Growth % Copart 370 9,500 13% IAA 221 9,000 11% KAR 74 5550 7% Source: Copart, IAA, KAR, Khaveen Investments Additionally, Copart has more than 750,000 members and more than 250,000 vehicles for sale, providing customers with a wide selection of vehicles. Additionally, Copart announced a partnership with CHAMPtitles in 2021, which offers services to process and sell salvage and clean title vehicles to the end users including vehicle dismantlers, dealers, rebuilders and exporters. Revenue Projections ($ mln) 2019 2020 2021 2022F 2023F 2024F 2025F 2026F Service Revenue 1,756 1,947 2,292 2,860 3,209 3,569 3,934 4,296 Growth % 11.23% 10.90% 17.71% 15.80% 12.21% 11.21% 10.21% 9.21% Vehicle Sales 286 258 401 630 702 777 851 923 Growth % 26.01% -9.75% 55.03% 22.07% 11.55% 10.55% 9.55% 8.55% Total Revenue 2,042 2,206 2,693 3,490 3,912 4,346 4,784 5,219 Total Growth % 13.09% 8.01% 22.08% 29.61% 12.09% 11.09% 10.09% 9.09% Source: Copart, Khaveen Investments Overall, Copart is the market leader in the online automotive auction market with the highest market share of 37.7% in 2021 and we believe its competitive advantages are supported by its number of locations and size which is the highest among competitors. We projected its revenue growth in FY2022 based on its prorated Q1 to Q3 segment revenue and based its revenue projection beyond FY2022 on its past 9-year average segment revenue growth but tapered down by 1% as a conservative estimate to derive a 5-year forward average total revenue growth of 14.4%. International Expansion Efforts Outpaced by Stronger US Growth Copart had made effort to expand internationally with its first expansion in 2003 in Canada and further expanded into the UK in 2007. Copart also has facilities across the US, Canada, UK, Brazil, the Republic of Ireland, Germany, Finland, the U.A.E., Oman, Bahrain, and Spain. Additionally, Copart claimed that the company is the first vehicle auction company that offers auction sounds in six global languages including Spanish, Arabic, Russian, Polish and French-Canadian. In 2021, the company further expanded in the UK with its new CashForCars platform. Copart, Khaveen Investments Copart Revenue by Region ($ mln) 2013 2014 2015 2016 2017 2018 2019 2020 2021 Average United States 826 894 903 1,016 1,193 1,491 1,657 1,861 2,272 Growth % 12.9% 8.2% 1.0% 12.5% 17.4% 25.0% 11.1% 12.3% 22.1% 13.6% International 220 270 243 252 255 315 385 345 420 Growth % 14.4% 22.4% -9.9% 3.8% 1.0% 23.5% 22.5% -10.5% 21.9% 9.9% Total 1,046 1,164 1,146 1,268 1,448 1,806 2,042 2,206 2,693 Growth % 13.2% 11.2% -1.5% 10.7% 14.2% 24.7% 13.1% 8.0% 22.1% 12.8% Source: Copart, Khaveen Investments In 2021, Copart derived 84.39% of its revenues from the U.S. and 15.61% from the international markets. However, the share of U.S. revenues for Copart has consistently increased over the past 10 years as its U.S. revenue growth (13.6%) outpaced its international segment growth (9.9%). Compared to the US, there is a more limited number of vehicle sellers in the UK as stated by Copart. Instead of selling cars to Copart’s typical buyers, insurance companies in the UK prefers Copart to adopt a 1P model by taking ownership of its salvage vehicles and this would indicate that Copart’s vehicles could become obsolete. Subsequently, Copart might require additional working capital to mitigate the inventory risk. Additionally, Copart highlighted the increasingly competitive market environment, particularly in the UK. Therefore, considering the potential challenges the company faces expanding overseas including the limited number of vehicle sellers and the lack of long-term contractual commitments, we expect the company’s revenue growth from its international segment to continue to remain below the company’s average total revenue growth as its U.S. segment had driven its revenue growth in the past 10 years (13.6%). Superb Profitability Margins Moreover, we compared and analyzed the company with its competitors, IAA and KAR, based on its profitability margins including gross, net and FCF margins. Company Gross Margin (5-Year) SG&A expenses % of Revenue (5-Year) Net Margin (5-Year) FCF Margin (5-Year) Copart 46.43% 10.45% 29.17% 14.29% IAA 38.15% 9.80% 13.88% 11.95% KAR 42.85% 24.44% 7.09% 5.44% Average 42.48% 14.90% 16.71% 10.56%

Shareholder Returns

	CPRT	US Commercial Services	US Market
7D	1.5%	2.4%	1.4%
1Y	-5.2%	2.6%	-8.4%

Return vs Industry: CPRT underperformed the US Commercial Services industry which returned 3.2% over the past year.

Return vs Market: CPRT exceeded the US Market which returned -9% over the past year.

Price Volatility

Is CPRT's price volatile compared to industry and market?
CPRT volatility
CPRT Average Weekly Movement	4.2%
Commercial Services Industry Average Movement	6.8%
Market Average Movement	7.6%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.1%

Stable Share Price: CPRT is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: CPRT's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1982	8,600	Jay Adair	https://www.copart.com

Copart, Inc. 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. It offers a range of services for processing and selling vehicles over the internet through its virtual bidding third generation internet auction-style sales technology to vehicle sellers, insurance companies, banks and finance companies, charities, fleet operators, dealers, vehicle rental companies, and individuals. The company’s services include online seller access, salvage estimation, estimating, end-of-life vehicle processing, virtual insured exchange, transportation, vehicle inspection stations, on-demand reporting, title processing and procurement, loan payoff, flexible vehicle processing programs, buy it now, member network, sales process, and dealer services.

Copart Fundamentals Summary

How do Copart's earnings and revenue compare to its market cap?
CPRT fundamental statistics
Market Cap	US$30.99b
Earnings (TTM)	US$1.08b
Revenue (TTM)	US$3.37b

28.6x

P/E Ratio

9.2x

P/S Ratio

Is CPRT overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CPRT income statement (TTM)
Revenue	US$3.37b
Cost of Revenue	US$1.75b
Gross Profit	US$1.62b
Other Expenses	US$534.49m
Earnings	US$1.08b

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	4.55
Gross Margin	48.03%
Net Profit Margin	32.15%
Debt/Equity Ratio	9.3%

How did CPRT perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is CPRT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CPRT?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CPRT. This is calculated by dividing CPRT's market cap by their current preferred multiple.
What is CPRT's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$30.99b

CPRT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	8.9x
Enterprise Value/EBITDA	20.2x
PEG Ratio	3.6x

Price to Earnings Ratio vs Peers

How does CPRT's PE Ratio compare to its peers?

CPRT PE Ratio vs Peers

The above table shows the PE ratio for CPRT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	28.1x
CTAS Cintas	36.2x	3.7%	US$44.6b
RBA Ritchie Bros. Auctioneers	26.8x	2.0%	US$7.9b
IAA IAA	16.5x	-1.8%	US$5.0b
UNF UniFirst	32.7x	24.5%	US$3.7b
CPRT Copart	28.6x	7.9%	US$31.0b

Price-To-Earnings vs Peers: CPRT is expensive based on its Price-To-Earnings Ratio (28.6x) compared to the peer average (28.1x).

Price to Earnings Ratio vs Industry

How does CPRT's PE Ratio compare vs other companies in the US Commercial Services Industry?

Price-To-Earnings vs Industry: CPRT is expensive based on its Price-To-Earnings Ratio (28.6x) compared to the US Commercial Services industry average (20.7x)

Price to Earnings Ratio vs Fair Ratio

What is CPRT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CPRT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	28.6x
Fair PE Ratio	29.4x

Price-To-Earnings vs Fair Ratio: CPRT is good value based on its Price-To-Earnings Ratio (28.6x) compared to the estimated Fair Price-To-Earnings Ratio (29.4x).

Share Price vs Fair Value

What is the Fair Price of CPRT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CPRT ($130.39) is trading below our estimate of fair value ($146.88)

Significantly Below Fair Value: CPRT is trading below fair value, but not by a significant amount.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Copart forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

7.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CPRT's forecast earnings growth (7.9% per year) is above the savings rate (1.9%).

Earnings vs Market: CPRT's earnings (7.9% per year) are forecast to grow slower than the US market (14.4% per year).

High Growth Earnings: CPRT's earnings are forecast to grow, but not significantly.

Revenue vs Market: CPRT's revenue (7.3% per year) is forecast to grow slower than the US market (7.8% per year).

High Growth Revenue: CPRT's revenue (7.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CPRT's Return on Equity is forecast to be low in 3 years time (18.2%).

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Past Performance

How has Copart performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

23.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CPRT has high quality earnings.

Growing Profit Margin: CPRT's current net profit margins (32.2%) are lower than last year (34.3%).

Past Earnings Growth Analysis

Earnings Trend: CPRT's earnings have grown significantly by 23.4% per year over the past 5 years.

Accelerating Growth: CPRT's earnings growth over the past year (27.9%) exceeds its 5-year average (23.4% per year).

Earnings vs Industry: CPRT earnings growth over the past year (27.9%) exceeded the Commercial Services industry 22.9%.

Return on Equity

High ROE: CPRT's Return on Equity (24.9%) is considered high.

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Financial Health

How is Copart's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CPRT's short term assets ($2.5B) exceed its short term liabilities ($449.1M).

Long Term Liabilities: CPRT's short term assets ($2.5B) exceed its long term liabilities ($641.7M).

Debt to Equity History and Analysis

Debt Level: CPRT has more cash than its total debt.

Reducing Debt: CPRT's debt to equity ratio has reduced from 56.3% to 9.3% over the past 5 years.

Debt Coverage: CPRT's debt is well covered by operating cash flow (271.3%).

Interest Coverage: CPRT's interest payments on its debt are well covered by EBIT (70.9x coverage).

Balance Sheet

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Dividend

What is Copart current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate CPRT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CPRT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CPRT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CPRT's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as CPRT has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.2yrs

Average management tenure

CEO

Jay Adair (53 yo)

0.33yr

Tenure

US$490,647

Compensation

Mr. A. Jayson Adair, also known as Jay, serves as Co-Chief Executive Officer at Copart, Inc. since April 01, 2022. He had been the Chief Executive Officer of Copart, Inc. since February 2010 until April 01...

CEO Compensation Analysis

Compensation vs Market: Jay's total compensation ($USD490.65K) is below average for companies of similar size in the US market ($USD12.88M).

Compensation vs Earnings: Jay's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: CPRT's management team is seasoned and experienced (5.2 years average tenure).

Board Members

Experienced Board: CPRT's board of directors are seasoned and experienced ( 13.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/18 00:00
End of Day Share Price	2022/08/18 00:00
Earnings	2022/04/30
Annual Earnings	2021/07/31