Copart, Inc.

CPRT · NASDAQ · USD

Can Copart's auction liquidity keep lifting selling prices and total loss frequency enough to offset the consumer pullback in collision claims that is shrinking its core insurance volumes?

Last 4 earnings calls · through Q4 FY2026

Bull case

  • Auction liquidity drives returns

    The 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 expansion

    International 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 expansion

    Non-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.

  • Cash generation and buybacks

    Copart turns a large share of revenue into free cash, carries no debt, and has begun buying back stock as its main way of returning capital to shareholders.

Bear case

  • Collision claims shrinking

    The 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 stalled

    Lower 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 rising

    Spending on new services and facilities has raised cost per vehicle faster than revenue per vehicle, narrowing gross and operating margins in the latest quarter.

  • Customer concentration

    A single customer loss accounts for the entire domestic insurance decline, showing how much of Copart's volume rests on the account decisions of a few large insurers.

Bull and bear points

Growth & Execution

In short: International and non-insurance units are growing, while U.S. insurance volumes follow insurer claims.

Bull · 2

  • International units grow while U.S. insurance units fall

    International units, including insurance units, grew last quarter while U.S. insurance units declined, and management says every market abroad now earns a profit.

    Q4 FY2026 call

  • Non-insurance units returned to growth in the fourth quarter

    Dealer, rental and bank sellers give Copart more cars to sell and bring in buyers who then bid on insurance vehicles, which supports prices across the whole platform.

    Q4 FY2026 call
Bear · 2

  • Collision claim frequency keeps falling as consumers cut coverage

    Fewer collisions mean fewer vehicles assigned to Copart's auctions, and collision claim frequency is still falling, which keeps pressure on the largest part of the business.

    Q4 FY2026 call

  • Total revenue grew less than one percent over the past year

    Higher selling prices have only just covered lower unit volumes, so the compounding growth that carried the business through the previous five years has stalled.

    Filed financials

Profitability & Financial Strength

In short: Cash generation is strong and there is no debt, while cost per vehicle is rising and margins have narrowed.

Bull · 2

  • Copart moved from deferring buybacks to repurchasing stock

    Two quarters earlier management deferred buybacks as a conversation for another day; by the third quarter it had repurchased 43.4 million shares and it kept buying in the fourth.

    Tone shiftQ1 FY2026 → Q3 FY2026

  • Free cash flow covers over a quarter of revenue

    Free cash flow was $1.3 billion, or 27% of revenue, which pays for both the buyback and the all-cash purchase of ACV without borrowing.

    Filed financials
Bear · 2

  • Gross margin fell as new services added cost

    Gross margin fell 3.5 points to 41.8% in the fourth quarter as long-haul delivery, title processing and new wholesale facilities added costs before their revenue arrived.

    Q4 FY2026 call

  • Cost per vehicle is rising after years of operating leverage

    Management has moved from citing cost control to promising to bring cost per vehicle down after facility spending grew faster than volume in the fourth quarter.

    Tone shiftQ1 FY2026 → Q4 FY2026

Market Position

In short: International buyers drive much of auction proceeds, while a few large insurers supply most of the vehicles.

Bull · 1

  • Management no longer calls the moment unusually adverse

    Earlier management described a uniquely Copart-adverse moment with the carriers it is strongest with; on the latest call the chief executive said there is no drama.

    Tone shiftQ2 FY2026 → Q4 FY2026
Bear · 2

  • One customer loss explains the entire U.S. insurance decline

    Domestic insurance assignments would have risen without that one account's departure, so the core volume trend depends on contract decisions at a few large insurers.

    Q4 FY2026 call

  • Export controls and sanctions govern who can buy

    Overseas buyers account for a large share of auction proceeds, so changes to export rules or conflict in buyer regions would cut competition for vehicles and the prices sellers receive.

    10-K, filed 2026-09-29