Is CPRT a good stock to buy? We came across a bullish thesis on Copart, Inc. on Summit Stocks’s Substack by Lucas | Summit Stocks. In this article, we will summarize the bulls’ thesis on CPRT. Copart, Inc.’s share was trading at $33.97 as of March 12th. CPRT’s trailing and forward P/E were 22.36 and 22.88 respectively according to Yahoo Finance.
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Copart, Inc. provides online auctions and vehicle remarketing services in the United States, and internationally. CPRT recently reported weaker Q2 2026 results, with global insurance units declining 9% year-over-year, revenue falling 3.6% to $1.12 billion, and earnings per share dropping 9.2% to $0.36.
The softness reflects difficult comparisons and broader weakness in the insurance vehicle market, including policy shifts, reduced consumer insurance coverage, and changes in carrier mix. While these pressures have weighed on volumes, management believes they are cyclical rather than structural.
Over the long term, the industry is shaped by two opposing forces: declining accident rates due to improving vehicle technology and rising total loss frequency, as modern vehicles become more expensive and complex to repair. Total loss frequency has climbed from 15.6% in 2015 to 24.2% in the latest quarter, and management expects it to reach 25–30% over time, which would support sustained demand for Copart’s auction platform. As this trend continues, the quality of vehicles flowing through Copart’s network has improved, with more repairable cars entering auctions and pushing average selling prices higher.
Since Copart earns fees tied to vehicle sale prices, stronger pricing directly benefits the business, with U.S. insurance selling prices rising 6% year-over-year in the quarter. Copart’s deep buyer and seller network further strengthens pricing power and liquidity, reinforcing its competitive advantage, particularly as the company increasingly shifts toward the consignment model internationally, which better aligns incentives with insurers and benefits from higher sale prices.
Despite near-term unit declines, management maintains that the long-term thesis remains intact and has signaled confidence through share repurchases, buying over 13 million shares for more than $500 million year-to-date. With shares down roughly 43% from their all-time high while free cash flow reached a record $1.4 billion, the stock trades at about 21x EV/FCF, suggesting an attractive valuation for a high-quality business facing temporary cyclical headwinds.
Previously, we covered a bullish thesis on Copart, Inc. (CPRT) by Andvari in May 2025, which highlighted the company’s strong balance sheet, disciplined capital allocation, large cash reserves, and strategic advantage in catastrophe-driven salvage auctions. CPRT’s stock price has depreciated by approximately 36.71% since our coverage due to slowing insurance auction volumes, declining inventory levels, and weaker-than-expected revenue growth in subsequent earnings reports. Lucas | Summit Stocks shares a similar view but emphasizes cyclical insurance volume weakness and the long-term tailwind from rising total loss frequency.
Copart, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held CPRT at the end of the fourth quarter which was 59 in the previous quarter. While we acknowledge the risk and potential of CPRT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CPRT and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
