CPRT

ANALYST NOTE: CPRT (Copart, Inc.) Date: 2026-06-13 Current Price: $30.23

1. Structural Readiness

• State: Context-only
• Conservative Entry: —
• Extension: —
• ATR at Breakout: —
• ATR Current: 3.1% (Productive)
• Pivot Strength: —
• Cap Bucket: Large
• Sector: Consumer Discretionary
• Industry: —

Setup Analysis:

2. Thesis Layer

This is a TACTICAL, setup-led name. As of 2026-06-13, there is no named macro or secular thesis attached to this specific setup in the current context. The investment case must be judged strictly on the quality of the technical setup (which is currently non-existent) and the underlying business fundamentals. We do not invent a thesis; we observe that the business is operating with strong fundamentals, but the market structure does not currently present a defined entry signal.

3. Business Overview

Copart, Inc. is a leading global provider of online auctions and vehicle remarketing services. The company operates a sophisticated "virtual bidding" platform that facilitates the buying and selling of vehicles over the internet.

• Business Model: The company acts as an intermediary, sourcing vehicles primarily from insurance companies (who account for ~81% of total volume processed in fiscal 2025) and selling them to a diverse buyer base including licensed dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and the general public.
• Revenue Drivers: Revenue is driven by service fees and the sale of purchased vehicles. In the third quarter of 2026, consolidated revenue grew 2.1% year-over-year to $1.24 billion.
• Key Metrics (Q3 2026):
• Insurance ASPs: Increased 4.1% year-over-year, reaching a seasonally adjusted all-time record high.
• Total Loss Frequency: Reached 23.6% in Q1 2026, an increase of nearly 5 percentage points over the past four years.
• International Exposure: International buyers now represent more than one-third of volumes sold at U.S. auctions and nearly half of auction proceeds.
• Pure Sale Mix: The mix of pure sale units for U.S. insurance sellers is at all-time highs, with Copart estimating its pure sale insurance volume is an order of magnitude higher than competitors.
• Global Footprint: Operations span the U.S., U.K., Germany, Brazil, Canada, U.A.E., Spain, Finland, Oman, Ireland, and Bahrain. In fiscal 2025, the company opened one new facility in the U.K., two in Spain, and three in the U.S.
• Financial Health: As of April 30, 2026, the company maintained an unused capacity of $1,228 million under its Senior Revolving Credit Agreement (2026 Credit Agreement), which matures in January 2031. Fiscal 2025 revenues were $4.6 billion with operating income of $1.7 billion.

4. Archetype and Conviction

• Archetype: Quality Compounder.
• Fit: The company demonstrates consistent revenue growth, expanding total loss frequency (a secular tailwind for the salvage market), and record-high ASPs. The business model benefits from rising repair costs and a globalized buyer base, creating a "high and best use" dynamic that supports pricing power.
• Valuation Context: Forward consensus EPS is estimated at $1.585 for FY1 and $1.6691 for FY2.
• Conviction Stack:
• Thesis Strength: Low (No named macro thesis; purely tactical).
• Evidence Quality: High. Multiple primary sources (earnings transcripts, SEC filings) confirm strong operational metrics, record ASPs, and robust liquidity.
• Structural Quality: High. The business has a wide moat (global network, data advantage via IntelliSeller, Purple Wave subsidiary) and strong balance sheet ($1.25B credit facility).
• Setup Readiness: None. The technical setup is currently inactive.
• Rerating Potential: Dependent on the technical setup firing. Fundamentals support the business, but the price action ($30.23) does not currently reflect a confirmed breakout or accumulation pattern in the provided data.

5. Invalidations, Strengths, and Gaps

• What would Strengthen the Case:
• Continued growth in international buyer participation (currently ~50% of proceeds).
• Further expansion of the "pure sale" mix, indicating superior inventory quality.
• What would Invalidate the Case:
• A significant decline in total loss frequency or a collapse in insurance ASPs, which would directly impact the core revenue driver.
• Deterioration in the credit facility availability or covenant breaches.
• Gaps in Evidence:
• Management Guidance: While historical data is robust, specific forward-looking guidance for the remainder of 2026 or 2027 regarding capex or specific ASP targets is not explicitly detailed in the provided evidence snippets beyond the Q3 2026 results.
• Sector Classification: The specific industry classification is missing from the provided data, though "Consumer Discretionary" is noted.

PRIVATE ANALYST CALL

Judgment: Hold Confidence: medium Key risks: Lack of defined technical entry point; Potential for ASP compression if repair costs stabilize; International buyer concentration risk; No named macro thesis to support immediate conviction. Sizing hint: N/A (No setup to size) Expected path: Business fundamentals remain robust with continued ASP growth and volume expansion; price action will likely consolidate until a structural breakout or breakdown occurs. Expected horizon: Indefinite (awaiting technical setup formation)