Copart, Inc.
Analysis
Copart's long slide in insurance volumes is ending, and management has pivoted from waiting it out to buying growth: the ACV deal takes it into dealer whole-car auctions. The risk is that the services winning those cars cost more than they have earned so far.How much of ACV's vehicle volume could shift onto Copart's own lots?
- The insurance unit decline is close to over.
Global insurance units fell 4.2% in Q4 FY2026, but domestic assignments would have grown 2.3% without one lost customer, and the fall in collision claims has narrowed sharply. The shrink that shaped the past four calls is nearly done.
- Copart is buying its way into dealer whole-car volume.
The ACV deal adds roughly 800,000 vehicles a year and the dealer buyers Copart has spent decades trying to win. Management calls it one partner for every used vehicle a dealer touches, sold on Copart's own lots with no new land.Which seller categories does the ACV deal add that Copart cannot reach alone?
- The services winning that volume cost more than they earn so far.
US yard costs per car rose 14% in Q4 FY2026 and gross margin fell to 41.8%, which management tied mostly to long-haul delivery, Title Express and the new wholesale lots. Revenue grew slower than the cost of chasing the units.How much of the higher cost per car is long-haul delivery versus the new lots?
- Auction liquidity drives returnsThe bull case is that Copart's auction liquidity gives insurers better prices than repairing does, so more cars are totaled and sent to its auctions each year.
- International expansionInternational operations are growing faster than the U.S. business and are profitable in every market, giving Copart growth that does not depend on the U.S. claims cycle.
- Whole car and dealer expansionNon-insurance sellers such as dealers, rental fleets and banks are returning to growth and widen the buyer base, which supports prices on insurance vehicles too.
- Collision claims shrinkingThe bear case is that consumers are dropping collision coverage and paying for small repairs themselves, so fewer cars reach Copart's insurance auction whatever its liquidity.
- Revenue growth has stalledLower unit volumes have largely offset higher selling prices, leaving total revenue nearly flat and breaking the compounding growth the company posted in prior years.
- Cost per vehicle risingSpending on new services and facilities has raised cost per vehicle faster than revenue per vehicle, narrowing gross and operating margins in the latest quarter.
| Politician | Transaction | Amount | Traded | Filed |
|---|---|---|---|---|
Donald Trump Republican · Executive | Purchase | ≥$1K | Jul 24 | Sep 22 |
Donald Trump Republican · Executive | Sale | ≥$250K | Jul 20 | Sep 22 |
Donald Trump Republican · Executive | Purchase | ≥$1K | Jul 17 | Sep 22 |
Donald Trump Republican · Executive | Sale | ≥$50K | Jun 24 | Aug 22 |
Donald Trump Republican · Executive | Sale | ≥$1K | Jun 23 | Aug 22 |
Congressional trading data provided by QuiverQuant
How Copart turned $4.7B of revenue into $1.7B of operating income.
| Revenue | ||
|---|---|---|
| Service | $4.0B | ▲ 0.02% YoY |
| Product | $696.7M | ▲ 2.71% YoY |
| Total revenue | $4.7B | |
| Gross profit | $2.1B | 44.7% |
| Operating income | $1.7B | 35.4% |