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]