Copart, Inc. (CPRT)
Consumo discrecional — servicios especializados
Copart operates the dominant online salvage-vehicle auction platform (a two-sided network effect between insurers and roughly 1 million registered buyers), with return on invested capital above 30% and net cash with no debt, following a 37% decline that reflects a real growth deceleration, not a broken business.
- Price
- $33.21
- Intrinsic value (5y, base)
- $55
- Total annual return (5y)
- 10.5%
- Status (nominal)
- Undervalued
- Margin of safety
- +24%
The essentials
- Return on invested capital of approximately 30% (against the 10% bar), with real invested capital derived from the most recent 10-Q balance sheet — no financial debt
- Growth slowed from ~10% annually to 1.0% in the TTM, with the international segment (17% of revenue) growing 7.4% over nine months while the United States fell 1.8%
- The fiscal third-quarter 2026 release carries no numerical guidance; the path is anchored on the trajectory and the visible improvement in the most recent quarter, not on a company promise
- Repurchased US$1.63bn in shares over nine months (a new turn in capital allocation), funded in part by the maturity of short-term securities
Intrinsic value — two valuation methods
By both methods, the value today (DCF $43 · Multiples $44) exceeds the market price ($33).
Pillars of the analysis
The verdict — today vs 5 years
Today — fairly valued: at $33 trades ~24.5% below its value discounted to today (~$44); the discount is positive but does not reach the margin of safety we require (≥38%).
At 5 years — Infravalorado: the target price ($55) plus dividends yield above the required average return (10%) — the business compounds.
The bridge: the return at 5 years exceeds the risk-free rate (4.5%) — but the discount does not reach the required margin of safety (≥38%). To require a 15% annual return, it would need to be bought at ~$27.
Thesis
The business
Copart operates the dominant marketplace for salvage-vehicle auctions, with a genuine network effect between insurers and buyers, return on invested capital of approximately 30%, and no financial debt. The recent growth deceleration (from ~10% annually to 1.0% in the TTM) is real — not an accounting artifact — and comes mostly from the United States segment; the international segment continues to grow strongly.
The valuation
Valued on EV/NOPAT, the standard metric for a capital-light marketplace (SBC immaterial, 0.8% of revenue). With the base path (starting at 5.0%, converging to 7.3% by year 5) and an exit multiple of 14× on the marketplace archetype [18-25×], the 5-year value is $55 per share, a +11% annual return against the current price.
The margin of safety
It trades at a real discount to value, though short of the required margin of safety. The price of US$31.61 trades 37% below the 52-week high (US$50.11), reflecting the growth deceleration more than a deterioration of the business: return on capital and the network moat show no signs of erosion in the filing.
What to watch
The central disconfirmer is whether the United States deceleration (revenue -1.8% over nine months) is transitory or structural. If the most recent quarter's improvement (+2.1%) does not hold and the international segment fails to compensate, the base path would prove over-optimistic. Also watch the Department of Justice investigation and any signal that insurers are starting to sell directly to large dismantlers, bypassing the auction.
Educational / informational. Does not constitute investment advice.