Core Thesis - Copart, Inc. is experiencing temporary headwinds in U.S. insurance unit volumes but maintains strong profitability and competitive advantages, reinforcing a bullish investment thesis [2][3][5] Financial Performance - In the latest quarter, Copart reported a net income increase of 22.9% year-over-year to $396.4 million, with gross margin expanding by 280 basis points to 45.3% and operating margin rising by 310 basis points to 36.5% [2] - Average selling prices (ASPs) in the U.S. increased by 5.7%, which helped offset the decline in volumes [2] Market Position and Competitive Advantage - The company has a global buyer base of over 300,000 members and an extensive salvage yard network, which contributes to its superior auction liquidity and pricing power [3] - Copart's ASP growth outpaces competitors by more than fivefold, indicating its premium market positioning [3] International Growth - International volumes grew by 3.3% in Q4 and 8.1% for the full year, with higher-margin consignment models in markets like Germany helping to mitigate domestic volume softness [4] Financial Flexibility - Copart has substantial financial flexibility, with $4.8 billion in cash and total liquidity of $6 billion, which supports potential buybacks or opportunistic mergers and acquisitions [4] Future Outlook - Investors are advised to monitor U.S. insurance volumes and industry dynamics, as well as the sustainability of ASP growth, while the company's pricing power and margin expansion highlight its resilience [5] - The investment thesis remains intact despite recent volume softness, with confidence in Copart's ability to generate strong returns over the long term [5]

Company Overview - Copart provides online auctions and vehicle remarketing services, including virtual bidding, salvage estimation, and end-of-life vehicle processing across North America, Europe, and select international markets [5][7] - The company operates a digital marketplace facilitating the sale and purchase of vehicles, generating revenue through transaction fees, service charges, and value-added offerings such as vehicle transportation and title processing [5][6] - As of October 13, 2025, Copart's market capitalization is $43.41 billion, with a revenue of $4.65 billion and a net income of $1.55 billion [4] Recent Developments - Argent Capital Management LLC reduced its holding in Copart by 1,262,984 shares during Q3 2025, with an estimated trade value of $59.52 million based on the average price for the quarter [1][2] - Following this reduction, Argent's remaining position in Copart is 162,339 shares, which now represents only 0.2% of the firm's reportable assets under management [2][3] - Copart's stock price as of October 13, 2025, was $44.07, reflecting a 20% decline over the one-year period and underperforming the S&P 500 by 36 percentage points [3] Financial Performance - Copart's revenue growth has slowed down significantly, with annual growth rates dropping from 15% over the last decade to 5% in the most recent quarter [11] - The company's stock has experienced a 30% decline from its high this year, which may have influenced Argent's decision to reduce its stake [11][10] - Despite the recent downturn, Copart still trades at 28 times earnings, indicating a potentially high valuation relative to its current performance [12]

Group 1: Autodesk - Autodesk is an application software company serving various industries including architecture, engineering, construction, product design, manufacturing, media, and entertainment, with over 4 million paid subscribers across 180 countries [1] - The company has transitioned to a subscription model, with over 95% of its revenue now recurring, which is expected to drive further top-line growth through upsells and a loyal user base [8] - Autodesk's competitive advantages stem from high switching costs and network effects, making it difficult for users to transition to competing software [7] Group 2: Copart - Copart has become the largest online salvage-vehicle auction operator in the U.S., with its top line growing nearly fivefold since 2009 due to land expansion and increased salvage volume [4] - The company has nearly tripled its land capacity since 2015, focusing on areas prone to natural disasters, which is crucial for handling an influx of salvage vehicles [3] - Copart conducts over 3.5 million transactions annually through its virtual bidding platform, connecting vehicle sellers with over 750,000 registered buyers [5] Group 3: InterContinental Hotels Group - As of the end of 2024, InterContinental Hotels Group operates nearly 990,000 rooms across 19 brands, with a strong presence in both midscale and luxury segments [9] - The company is well-positioned to leverage its brand assets and loyalty program, which has approximately 145 million members, to drive growth despite economic uncertainties [10] - Over 99% of the rooms are managed or franchised, providing a recurring-fee business model with high return on invested capital and significant cancellation costs for property owners [12]

Core Viewpoint - Copart, Inc. (NASDAQ: CPRT) is currently viewed as an oversold large-cap stock with varying analyst ratings and price targets indicating potential upside from current levels [1][2]. Group 1: Analyst Ratings and Price Targets - J.P. Morgan analyst Jash Patwa maintained a Hold rating on Copart, setting a price target of $50.00 [1]. - Stephens lowered its price target on Copart to $46 from $50 while maintaining an Equal Weight rating [2]. - CFRA analyst Garrett Nelson maintained a Buy rating with a price target of $65.00 [2]. - The analyst consensus for Copart is a Moderate Buy, with a median price target of $45.09, suggesting an upside of 28.60% from current levels [2]. Group 2: Company Overview - Copart, Inc. provides online auctions and vehicle remarketing services, offering a range of services including online seller access, virtual insured exchange, vehicle inspection stations, transportation services, salvage estimation services, and on-demand reporting [3].

Core Insights - Copart, Inc. (CPRT) experienced a stock price decline of 1.15% on the most recent trading day, underperforming the S&P 500's gain of 0.06% [1] - The stock has decreased by 6.3% over the past month, contrasting with the Business Services sector's gain of 0.95% and the S&P 500's gain of 3.94% [1] Earnings Projections - Copart, Inc. is expected to report earnings of $0.41 per share, reflecting a year-over-year growth of 10.81% [2] - The consensus estimate for quarterly revenue is projected at $1.21 billion, which is an increase of 5.48% from the previous year [2] Full Year Estimates - For the full year, analysts anticipate earnings of $1.72 per share and revenue of $4.96 billion, indicating changes of +8.18% and +6.76% respectively from last year [3] Analyst Estimates - Recent adjustments to analyst estimates suggest a favorable outlook on Copart, Inc.'s business health and profitability [4] - The Zacks Consensus EPS estimate has decreased by 0.58% in the past month, and Copart, Inc. currently holds a Zacks Rank of 4 (Sell) [6] Valuation Metrics - Copart, Inc. is trading at a Forward P/E ratio of 26.27, which is lower than the industry average Forward P/E of 34.12, indicating a discount relative to its peers [7] - The Auction and Valuation Services industry, part of the Business Services sector, has a Zacks Industry Rank of 213, placing it in the bottom 14% of over 250 industries [7][8]

Core Insights - Copart is expected to report Q4 FY'25 earnings on September 3, with projected revenue of approximately $1.14 billion, reflecting a 6% increase year-over-year, and earnings per share of $0.36, up by $0.03 from the previous year [3][4][5] Financial Performance - The company has a market capitalization of $47 billion and generated $4.6 billion in revenue over the past twelve months, with operating profits of $1.6 billion and net income of $1.5 billion [5] - The historical performance shows that Copart has had 19 earnings data points over the past five years, with 8 positive and 11 negative one-day returns, resulting in a positive return rate of approximately 42%, which increases to 45% when considering the last 3 years [10] Market Trends - Growth in Copart's operations is driven by an increased number of vehicles being scrapped due to natural disasters, rising vehicle repair costs, and insurance companies declaring more vehicles as total losses [4] - The company is expanding its geographical presence in Europe, Latin America, and Asia, which is facilitating its growth [4] Trading Strategies - There are two approaches for trading around earnings announcements: understanding historical probabilities and positioning ahead of the announcement, or analyzing the correlation between immediate and medium-term returns post-earnings [6] - A less risky strategy involves gauging the correlation between short-term and medium-term returns after earnings, allowing traders to execute trades based on the strongest correlations observed [7][8]

Core Viewpoint - Copart (CPRT) may present a contrarian investment opportunity despite its unusual business model and recent stock performance, which has seen a significant decline [1][4]. Company Overview - Copart operates as an online auction platform, offering remarketing services for salvage and clean-title vehicles. Economic challenges may lead consumers to opt for used vehicles or repair existing ones, potentially increasing demand for Copart's services [2]. Financial Performance - The company has demonstrated strong financial fundamentals, with an annual revenue growth of 16.1% over the past five years and impressive free cash flow, providing it with operational flexibility [3]. Stock Performance - CPRT stock has experienced a decline of over 22% since the beginning of the year and nearly 9% in the last month. The Barchart Technical Opinion indicator currently rates CPRT as a 100% Strong Sell, indicating bearish sentiment [4]. Options Activity - The net trade sentiment for CPRT's options flow started the month at $219,000 below parity and worsened to $713,000 below parity by the end of the month. However, the negative change in flow from September 18 to September 29 was only $145,000, suggesting a potential reduction in bearish sentiment [5][6].

Core Insights - Copart (NASDAQ: CPRT) operates in a virtual duopoly in the US, showcasing strong compounding characteristics and attractive returns on equity [1] Company Overview - Copart is recognized for its "moaty" characteristics, indicating a strong competitive advantage in the market [1] - The company is experiencing significant international expansion, which is contributing to its growth [1] Investment Perspective - The company has a beneficial long position in its shares, indicating confidence in its future performance [2]

Group 1 - Copart (NASDAQ: CPRT) operates in a virtual duopoly in the US, showcasing strong compounding characteristics and attractive returns on equity [1] - The company is experiencing significant international expansion, enhancing its market presence [1] Group 2 - The article reflects a beneficial long position in CPRT shares, indicating confidence in the company's future performance [2]

Core Viewpoint - Copart's stock has declined significantly, trading about 30% below its 52-week high, as investors react to softer trends in the auto ecosystem and a reset in expectations [2][3] Financial Performance - Copart's fiscal Q4 results showed revenue growth of 5% year over year, reaching approximately $1.13 billion, with gross profit up 12% and earnings per share up 24% [5] - For the full fiscal year, revenue increased nearly 10% to $4.65 billion, and earnings per share rose 14% to $1.59 [5] - However, there was a deceleration in growth, with Q4 revenue growth slowing from 7.5% in Q3 to 5% in Q4, and vehicle sales declining by 4% [6] Market Dynamics - The total loss frequency increased to 22.2% in Q2 2025 from 21.5% in Q2 2024, which could benefit Copart by increasing the number of totaled cars available for auction [7] - Despite this, used-vehicle values have been declining, and the volatility in claim counts and repair-shop dynamics may negatively impact seller behavior and fee growth [7] Investment Considerations - Copart operates a strong business model characterized by a two-sided marketplace with global liquidity and high returns on invested capital, which has historically led to steady growth and strong cash generation [8] - The future path for Copart is uncertain, with potential challenges including soft auto sales, declining used-vehicle values, and fewer total-loss cars due to advancements in driver-assist and self-driving technology [9] - The stock is currently valued at approximately 28 times earnings, which is not considered extravagant but may not be a bargain given the slowing growth and unsettled industry dynamics [10] Long-term Outlook - Despite current challenges, Copart's long-term appeal remains strong due to its land bank, international expansion, and operational advantages that should support solid growth through economic cycles [11] - Investors may benefit from waiting for a lower entry price or clearer signs of growth reacceleration before making investment decisions [11] - Overall, Copart is viewed as a fantastic business that is becoming increasingly interesting following the recent sell-off [12]