Copart (CPRT) Shares Drop 1.10% as Earnings Miss and Bearish Sentiment Weigh

Copart (CPRT) shares fell 1.10% on September 25, 2025, hitting their lowest level since November 2023, with an intraday drop of 1.59%. The decline followed a mix of earnings results and heightened bearish sentiment, signaling near-term concerns among investors.

The company’s Q4 fiscal 2025 report highlighted a revenue shortfall of $10 million despite an earnings per share (EPS) beat. While gross profit rose 12.4%, the revenue miss underscored challenges in sustaining top-line growth amid competitive pressures. Analysts noted that the results prompted a recalibration of expectations, with investors prioritizing revenue stability over profit improvements.

Bearish trading activity intensified as put option volume surged 393%, reflecting aggressive short-term bets against the stock. Institutional investors, including Wellington and T. Rowe Price, cut their stakes in Q2 2025 by 80%, signaling a shift in portfolio strategy. Insider sales over six months further fueled skepticism about Copart’s operational direction, compounding market pessimism.

Analyst sentiment turned cautious following a downgrade from Stephens, which reduced the price target to $46 from $50. This adjustment highlighted concerns over inventory assignment declines and margin pressures in the online vehicle auction sector. Competitors like IAA Inc. were cited as growing threats, with industry participants noting intensified pricing competition and reduced auction volumes.

Broader macroeconomic factors, including a slowdown in used vehicle demand and higher interest rates, exacerbated Copart’s challenges. The sector’s shift toward direct consumer sales and private-party transactions weakened Copart’s traditional auction model, limiting its ability to secure inventory. These structural headwinds, combined with short-term earnings volatility, created a less favorable operating environment for the company.