There’s a certain kind of business that looks ugly on the surface and beautiful in the numbers. Copart sits right in that sweet spot. It doesn’t need consumers to feel optimistic, it doesn’t need a hot IPO window, and it doesn’t rely on the latest gadget cycle. It makes money when vehicles are written off, processed, and sold efficiently to the people who can extract value from what’s left.
The core thesis for CPRT is simple: Copart has built a global-scale auction and logistics machine around “total losses,” and the market routinely underestimates how durable that machine is. Even when the stock derates, the business tends to keep compounding. With the shares around $41.48 and the technicals leaning bullish, this is an actionable long setup for a mid-term (45 trading days) move as price action stabilizes off the recent low.
Importantly, this is not a “story stock.” It’s a platform business with real operating leverage and cash generation, trading below its 52-week high of $63.85 and only modestly above the 52-week low of $37.41. When a high-quality compounder goes on sale, you don’t need perfection. You need a plan.
Copart’s edge isn’t that cars get totaled. Cars always get totaled. The edge is that Copart is the scaled, digital marketplace and services layer that repeatedly wins the flow.
What Copart actually does (and why the market should care)
Copart runs online auctions and vehicle remarketing services. Sellers use Copart to process and sell vehicles primarily via the internet using its Virtual Bidding platform. Buyers are the ecosystem that can monetize salvage: dismantlers, rebuilders, repair licensees, used dealers, exporters, and in certain locations, the public. Copart also provides the unglamorous “plumbing” that makes the whole thing work: transportation, inspection stations, estimating services, end-of-life processing, DMV processing, and other back-office services.
Why it matters: marketplaces with embedded services tend to be sticky. Once a seller integrates workflow into a platform that can move volume, handle compliance, and reach global demand, switching is painful. That’s the real moat. And because the unit economics can improve with scale, the leader often gets stronger over time.
The numbers that matter right now
CPRT’s market cap is about $40.08B with an enterprise value around $34.84B. The stock closed at $41.40 on 01/23/2026 and is trading around $41.48 currently, up roughly 0.78% on the day. The average volume sits near 9.41M shares, and the latest session printed about 7.50M.
On profitability and cash generation, the market is paying a premium, but not a fantasy premium:
- P/E: ~25.1 to 25.4
- P/S: ~8.61
- EV/Sales: ~7.48
- EV/EBITDA: ~18.49
- Price/Free Cash Flow: ~28.37
- Free cash flow: ~$1.41B
- ROA: ~15.07%
- ROE: ~16.6%
- Debt-to-equity: 0
- Current ratio: ~7.94 (quick ~7.89)
Those return metrics are strong for a large-cap operation, and the balance sheet ratios are, frankly, unusually clean. In a market that periodically punishes leverage, Copart’s “debt-to-equity 0” profile changes the risk calculus. You can argue about valuation, but you can’t argue that the business is financially strained.
The most concrete operational datapoint available from recent coverage: Copart reported fiscal Q4 results with $0.41 EPS on $1.13B in sales, showing 5% sales growth and 24% profit growth (reported 09/05/2025 and 09/04/2025). That mix tells you something important: even when top-line growth is mid-single digits, the earnings engine can still flex.
Valuation framing: expensive, but not irrational
At roughly 25x earnings and ~8.6x sales, CPRT isn’t cheap in the classic “deep value” sense. The market is pricing in durability, not a one-year surge. That’s consistent with what Copart is: a scaled marketplace with services attached, high returns on capital, and meaningful free cash flow.
The pushback is also fair. The stock is far below the 52-week high of $63.85. That’s not just “market noise.” It reflects a real reset in multiple tolerance and concerns around growth deceleration (which showed up in the narrative around the post-earnings drop). In other words, the market has already debated the valuation and decided it doesn’t want to pay peak prices.
But here’s the nuance: after a reset, you don’t need multiple expansion back to the highs to make money. You just need the business to keep delivering steady results while the chart stops bleeding. A move from low $40s into the mid-to-upper $40s can happen with the same valuation framework, simply on improved positioning and sentiment.
Technical setup: momentum is turning up
Technically, CPRT looks like it’s rebuilding. The stock’s current price (~$41.48) is above key short-to-mid averages:
- 10-day SMA: ~$40.66
- 20-day SMA: ~$39.78
- 50-day SMA: ~$39.68
- 9-day EMA: ~$40.75
- 21-day EMA: ~$40.13
Momentum indicators support that read. RSI is ~63.7 (not overbought, but getting warm), and MACD is in bullish momentum with the MACD line (~0.47) above signal (~0.20). This is the kind of tape you want for a mid-term long: not euphoric, but improving.
Short interest is not extreme, but it’s present. As of 12/31/2025, short interest was about 29.56M shares with ~3.61 days to cover. That’s not “squeeze city,” but it does mean if price grinds higher, shorts can add incremental demand on the way out.
Trade plan (actionable)
This is a mid term (45 trading days) long. The reason for that horizon is simple: the trend repair is visible in moving averages and MACD, but CPRT typically needs time to follow through because it’s a large-cap, institutionally owned name. You’re trading a grind, not a meme candle.
| Item | Level | Why it matters |
|---|---|---|
| Entry | $41.50 | Near current price, above key moving averages, aligns with improving momentum |
| Stop Loss | $39.60 | Below the 20-day SMA (~$39.78) and near the 50-day SMA (~$39.68), invalidates the “trend repair” thesis |
| Target | $46.80 | Reasonable mean reversion upside from the low $40s without requiring a return to 52-week highs |
How I’d manage it: If CPRT pushes into the mid $44s quickly and RSI stretches, I’d expect digestion. If it instead loses the $40 area and closes weak for multiple sessions, I’d respect the stop. This trade is built on the premise that buyers defend the rebuilt base above the 20- and 50-day levels.
Catalysts (what could move the stock in the next 45 trading days)
- Continued technical follow-through: With MACD bullish and price above key averages, incremental buying can bring systematic flows back.
- Sentiment normalization after the valuation debate: The post-earnings drop narrative (slowing growth and valuation concerns) can fade when the company keeps printing solid profit growth.
- Institutional positioning shifts: Some funds have reduced exposure (one report highlighted Argent Capital Management cutting shares in Q3 2025). If selling pressure has run its course, the absence of that supply can matter.
- Short-covering tailwind: ~29.6M shares short with ~3.6 days to cover can add fuel if price action turns persistent.
Risks (and the counterargument you should take seriously)
The bear case isn’t silly. It’s just more about price and expectations than existential business risk.
- Valuation compression risk: At ~25x earnings and ~8.6x sales, CPRT can drop even if operations are fine. If the market de-rates quality compounders, the multiple can fall faster than fundamentals improve.
- Growth deceleration narrative returning: One reason the stock dropped after earnings was concern about slowing growth rates. If revenue growth stays around mid-single digits and the market decides that deserves a lower multiple, upside can cap out.
- Momentum failure: RSI near ~63.7 is supportive, but it’s also close enough to “crowded long” territory that a couple weak sessions can trigger fast profit-taking. A break back below the 20- and 50-day lines would be a warning.
- Liquidity and flow risk from big holders: Reports of large investors trimming (like the Q3 2025 stake reduction) remind you that institutions can be a source of supply. If another wave of selling hits, technical levels can fail regardless of business quality.
- Short interest is not high enough to rely on: Days to cover around 3 to 4 can help on the margin, but it’s not a structural catalyst. If the tape turns, shorts won’t “save” the trade.
Counterargument to my long thesis: the cleanest argument against buying here is that Copart is a great business that’s still priced like a great business. If the market is shifting toward lower multiples for consistent but slower growers, CPRT could remain a “dead money” grinder. In that scenario, you might get a decent company and a mediocre stock for longer than you want.
Conclusion: long CPRT for a measured rebound
I like CPRT as a mid-term long from around $41.50 because the business remains high-quality (strong ROA and ROE, meaningful free cash flow, and a notably clean debt profile), while the chart is finally acting like it wants higher prices. You’re not paying for hypergrowth; you’re paying for resilience and repeatability.
What would change my mind: a sustained break below the $39.60 stop area would tell me the market is not done de-risking the name, and that the recent momentum signals were a head fake. Fundamentally, if the next set of results convinces the market that profit growth can’t outpace revenue growth anymore, the multiple could stay under pressure and I’d be less interested in pressing longs.