Is Copart Stock Finally Undervalued Amidst Industry Uncertainty?
ByAinvest
Saturday, Sep 27, 2025 4:38 am ET1min read
CPRT--
Copart's latest earnings report, covering the period ended July 31, showed mixed results. Revenue grew by 5% year over year to about $1.13 billion, with gross profit up 12% and earnings per share up 24%. However, momentum cooled from earlier in the year, with the fourth quarter's 5% top-line growth marking a deceleration from the third quarter's 7.5% growth. Service revenues, the core of Copart's model, grew by 7%, but vehicle sales fell by 4%, reflecting a tougher pricing and volume backdrop [2].
CEO Jeff Liaw highlighted mixed signals on the September earnings call, noting that total loss frequency for the second quarter of 2025 was 22.2%, up from 21.5% in the same quarter in 2024. This trend helps Copart because more totaled cars generally mean more units for auction. However, other factors offset this tailwind, such as declining used-vehicle values and volatile claim counts and repair-shop dynamics [2].
The investment case for Copart hinges on the next upcycle and the price you pay. The business remains high quality, with a two-sided marketplace, global liquidity, and network advantages from land capacity and dense logistics. However, the path from here is unclear, with potential headwinds from soft auto sales, declining used-vehicle values, and advances in driver-assist and self-driving technology [2].
Waiting for a cheaper valuation may be the smarter move due to uncertainty around accident frequency and vehicle lifecycles. Investors should closely monitor these trends and consider the potential for a rebound in the market [2].
Copart shares are down 30% from last year's high due to slowing growth and mixed industry trends. Recent results show 5% revenue growth, but momentum cooled from earlier in the year. The business remains high quality, but near-term dynamics are murky. Waiting for a cheaper valuation may be the smarter move due to uncertainty around accident frequency and vehicle lifecycles.
Copart, Inc. (NASDAQ: CPRT) has seen its stock price drop by approximately 30% from last year's high, driven by slowing growth and mixed industry trends. The salvage-auction leader's stock is currently trading around 30% below its 52-week high, as investors grapple with softer trends in the auto ecosystem and a reset in expectations [2].Copart's latest earnings report, covering the period ended July 31, showed mixed results. Revenue grew by 5% year over year to about $1.13 billion, with gross profit up 12% and earnings per share up 24%. However, momentum cooled from earlier in the year, with the fourth quarter's 5% top-line growth marking a deceleration from the third quarter's 7.5% growth. Service revenues, the core of Copart's model, grew by 7%, but vehicle sales fell by 4%, reflecting a tougher pricing and volume backdrop [2].
CEO Jeff Liaw highlighted mixed signals on the September earnings call, noting that total loss frequency for the second quarter of 2025 was 22.2%, up from 21.5% in the same quarter in 2024. This trend helps Copart because more totaled cars generally mean more units for auction. However, other factors offset this tailwind, such as declining used-vehicle values and volatile claim counts and repair-shop dynamics [2].
The investment case for Copart hinges on the next upcycle and the price you pay. The business remains high quality, with a two-sided marketplace, global liquidity, and network advantages from land capacity and dense logistics. However, the path from here is unclear, with potential headwinds from soft auto sales, declining used-vehicle values, and advances in driver-assist and self-driving technology [2].
Waiting for a cheaper valuation may be the smarter move due to uncertainty around accident frequency and vehicle lifecycles. Investors should closely monitor these trends and consider the potential for a rebound in the market [2].
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