Copart, Inc. (NASDAQ: CPRT) — The Salvage Duopolist in the Bargain Bin, Re-Rated From Forty-Times to Its Cheapest-Ever Multiple

Independent Equity Research — Initiation Report date: 2026-06-26 | Price: $30.05 (2026-06-25 close)

⚡ Claude’s Take

This block is the author’s own independent opinion and general information only — not investment advice. The analytical body of this article that follows takes no position and sets no price target; it is evidence-first analysis.

Verdict: HOLD / accumulate on weakness — a genuinely best-in-class compounder de-rated to its cheapest-ever multiple, where roughly half the de-rate is deserved. Accumulation zone high-$20s to low-$30s (~17–19x earnings); fair-value zone mid-$30s to low-$40s. Not a short. Medium conviction. Framing: fallen-angel quality, not a falling knife.

Copart is the rarest kind of opportunity and the most easily mis-played: a structurally superior, net-cash, 36%-operating-margin franchise that has fallen ~53% from its 2025 high ($64 → $30) while earnings kept rising. On its own decade of history the stock now sits at the 7.9th valuation percentile — P/E 18.8x (7.8th percentile), price-to-book at the 0.975th percentile, the cheapest it has ever been on book. The market paid 40x for the 2021–22 pandemic-ASP peak and is now paying 19x for a soft-volume year; the de-rate is principally a multiple event, not an earnings event. That is the bull’s whole case, and it is a good one: the land-and-network moat is intact, US insurance ASPs just printed an all-time record (+4.1%), international and non-insurance volumes are growing double-digit, the balance sheet holds ~$4.2B of net cash, and — decisively — management switched the buyback back on after three years of hoarding, repurchasing 43.4M shares for $1.63B in the first nine months of FY26 at ~$37.63, i.e. above today’s price. When an owner-operator with 9.6% of the stock starts buying, you listen.

What keeps me at HOLD rather than table-pounding BUY is that the other half of the de-rate is earned. This is not a cyclical air-pocket in a one-horse race. IAA — under RB Global since 2023 — has stopped stumbling, is exceeding service targets, grew units +4.7% in 2025 while Copart’s fell ~2.8%, and pulled Progressive’s salvage allocation from ~75% to ~90% of units — a real, quantified share loss to the now-largest US auto insurer. On top of that sits a genuine cyclical drag (consumers dropping insurance coverage as premiums bite, shrinking the totaled-car pool). So the franchise is being asked, for the first time in a decade, to prove its volume algorithm against a competitor that is no longer broken. At 19x earnings — fair, not dirt-cheap, for a name growing EPS low-double-digits through a soft patch — I want the share-loss question answered before paying up. Conviction: medium. Flips bullish if US insurance units re-inflect positive and carrier share stabilizes (one or two clean quarters). Flips bearish if a second major carrier follows Progressive to IAA, or ASP growth rolls over. Tag: “The best house in a two-house town, on sale because the other house got its act together.”

📈 Stock Price Action — Five-Year Event Map

Copart round-tripped a full cycle in five years: from the low-$30s (split-adjusted) in 2021, to a $25.70 rate-shock low in mid-2022, up to an all-time high of $63.84 in May 2025, and then a near-halving back to $30.05 today — a 52-week range of $29.48–$49.97 and ~53% below the all-time high. The decline has been steady and fundamentally-driven (deteriorating US insurance volume disclosures), not a single gap-down; the stock spent late-2025 into mid-2026 grinding lower as each quarterly print confirmed soft units. Price moves below are FACT; attributed drivers are INTERPRETATION.

Cycle narrative. (1–2) Copart entered the period priced for the pandemic’s freakishly high salvage economics; when the Fed broke the high-multiple cohort in 2022, CPRT fell with it to a $25.70 low despite no fundamental break. (3–4) The 2023–25 leg was the real thing — rising total-loss frequency, record international-buyer-driven ASPs, and relentless EPS compounding carried the stock to a $63.84 all-time high in May 2025 at roughly 40x earnings, a multiple that left no room for disappointment. (5) Disappointment arrived as US insurance unit volumes softened — first read as a cyclical affordability blip (Q2-FY26’s $0.36 EPS miss in February 2026 crystallized it). (6) The final leg lower came as the softness was revealed to be partly competitive — IAA, revived under RB Global, won a larger slice of Progressive’s salvage — re-rating a premium compounder that had lost its unblemished-growth narrative down to the cheapest valuation percentile in its public history. Every leg traces to earnings prints (8-K furnishings, 2026-02-19 and 2026-05-21) and disclosed volume/ASP commentary, not to chart levels.

1. Executive Summary

Copart operates the dominant online marketplace for salvage and total-loss vehicles, auctioning ~81%-insurance-sourced inventory to a global base of buyers in 160+ countries. It is one of the highest-quality franchises in the public equity market: a two-sided network business with a physical land moat, 36.5% operating margins, mid-teens-to-high-20s% returns on capital (understated by a large idle-cash balance), a debt-free balance sheet with ~$4.2B of net cash, and a 15-year revenue CAGR near 15%. FY2025 (ended 7/31/2025) revenue was $4.65B (+9.7%), operating income $1.70B, and diluted EPS $1.59.

The investable question today is not business quality — it is price versus a genuine fundamental wobble. After compounding to an all-time high near $64 in May 2025 at roughly 40x earnings, the stock has fallen ~53% to ~$30, leaving it at the 7.9th percentile of its own ten-year valuation range (P/E 18.8x; price-to-book at the 0.975th percentile, an all-time low). The de-rate has two distinct sources, and disentangling them is the entire analysis:

• Cyclical (reverses): US auto-insurance affordability has driven a measurable consumer pullback from coverage — earned car years fell ~4% year-over-year even as the vehicle fleet grew ~1.4% — shrinking the pool of insured, totaled vehicles. Management and external data frame this as cyclical and counter-inflationary.
• Structural (may not reverse): IAA, Copart’s only scaled competitor, was acquired by RB Global (Ritchie Bros) in 2023 and has turned from a stumbling rival into a credible one — exceeding service targets, growing units +4.7% in 2025 versus Copart’s ~−2.8%, and lifting its share of Progressive’s salvage from ~75% to ~90%. This is a real, quantified share loss to the largest US auto insurer.

Offsetting both: the secular driver — total-loss frequency (the share of insured collisions resolved as total losses) — continues its multi-decade climb, hitting a record ~23.6% in early 2026 (independently corroborated by CCC Intelligent Solutions at a record 23.1% for 2025), as repair-cost inflation and ADAS-sensor complexity push ever more marginal vehicles across the total-loss threshold. Copart’s pricing power is intact and demonstrable: US insurance ASPs hit an all-time record in the latest quarter (+4.1%), and international and non-insurance volumes are growing high-single-to-double-digit. Critically, capital allocation has inflected: after zero buybacks in FY2023–FY2025, Copart repurchased 43.4M shares for $1.63B in the first nine months of FY2026 at ~$37.63, backed by a new $1.25B revolver.

This memo takes no position and sets no price target. The body that follows argues that Copart is a structurally good business in a structurally good industry, that its moat is real and named (demand-side captivity + economies of scale + an irreplaceable permitted-land footprint), that its financial quality is excellent and only optically deteriorating, that its capital allocation has improved at the margin but remains governed by a returns-blind compensation scheme and insiders who only ever sell, and that the embedded expectations at ~19x earnings are reasonable rather than demanding — pricing modest growth with a real, unresolved competitive question attached.

2. Business Overview

Copart is, in plain terms, an online auction house for wrecked, totaled, and end-of-life vehicles. When a car is damaged badly enough that an insurer declares it a total loss, the insurer needs to dispose of the wreck. Copart takes physical custody of the vehicle at one of its ~281 storage yards, photographs and catalogs it, processes the title, and sells it through its proprietary VB3 (Virtual Bidding, Third Generation) internet auction platform to a registered member — typically a dismantler harvesting parts, a rebuilder restoring the car to roadworthiness, a used-parts dealer, or an exporter shipping it to a developing market. Copart has been 100% online since the mid-2000s; there is no physical auction lane.

How it makes money (the economic engine). In the United States and most markets, Copart operates as an agent/consignee, not a principal — it never owns the car. It earns: (i) seller fees from the insurer (a percentage of sale price, tiered price-driven fees, or fixed per-vehicle fees); (ii) buyer fees from the winning member (a significant and growing revenue stream — buyers pay to bid and to win); and (iii) ancillary service fees for towing/retrieval, storage, title procurement, loan payoff, and increasingly long-haul delivery. This agent model is why Copart’s economics are so extraordinary: it touches the full transaction value of the vehicle but recognizes only its fees as revenue, so reported margins are very high. In FY2025, service revenues and fees were $3.97B (85% of total) at very high incremental margins.

The exception is the UK, Germany, and Spain, where Copart also transacts on a principal basis — buying salvage outright from insurers and reselling for its own account. This is the “vehicle sales” line ($678M, 15% of revenue), which is grossed-up (full resale price booked as revenue, vehicle cost booked in COGS) and structurally low-margin. This mix distinction is essential to reading the financials correctly: the gross-margin “decline” is substantially a function of this gross-up, not deteriorating core economics.

Revenue segmentation (FY2025).

Customer types / end markets. On the sell side, insurance companies supplied ~81% of vehicles processed in FY2025 (81% FY24, 83% FY23); the balance comes from banks/finance companies (repossessions), fleet/rental operators, charities, dealers, and individuals (via the CashForCars.com channel, where Copart buys directly from the public). On the buy side, members are dismantlers, rebuilders, dealers, and exporters; international buyers represent ~40% of vehicles sold and nearly half of auction proceeds, because they bid on higher-value cars destined for restoration abroad.

Recurring vs. non-recurring. Revenue is transactional, not contractual-recurring in the SaaS sense — but it is highly recurring in character. Vehicles total out continuously regardless of the cycle; insurers are repeat sellers under multi-year arrangements; and the buyer base churns at the edges but is replenished by tens of thousands of new members annually. The business is, in effect, a toll on the steady-state flow of damaged vehicles through the US (and increasingly global) insurance system.

Brands/subsidiaries. Beyond the core Copart marketplace and VB3: Copart Direct / CashForCars (direct-from-public purchasing), CrashedToys (motorcycles/powersports), National Powersport Auctions (NPA) (powersports remarketing), DRIVE Auto Auctions and BluCar (whole-car/dealer consignment), Copart Dealer Services, and a majority stake in Purple Wave (online heavy-equipment/agricultural/fleet auctions, acquired October 2023) — a diversification away from the auto cycle, growing GTV >25% YoY. Growth has been overwhelmingly greenfield, not M&A: there is no material business-combinations note in the FY2025 10-K; acquisition cash outflow was immaterial (−$1.2M FY25). Copart builds yards; it does not buy growth.

Verdict. A simple, durable, cash-generative toll-business model layered on the steady flow of totaled vehicles, with an asset-light agency revenue structure (85% service fees) sitting atop an asset-heavy owned-land base. The model is easy to understand and hard to dislodge.

3. Industry Dynamics

Structure: a hardened duopoly. The US salvage-auto-auction market is a two-firm market — Copart and IAA (Insurance Auto Auctions) — that together control on the order of 80–90% of US insurance salvage volume. IAA was acquired by RB Global (Ritchie Bros., NYSE: RBA) for ~$7B in March 2023. The precise share split is not cleanly disclosed by either firm; secondary estimates range Copart ~50–65% / IAA ~35%, with the wide band reflecting insurance-only versus all-salvage definitions. The direction is clearer and more important than the level: in calendar 2025, IAA grew units ~+4.7% while Copart’s fell ~−2.8% against a roughly flat market — IAA is taking share back toward the ~50/50 split it held before its post-2020 operational stumbles.

Market size. The salvage/total-loss pool funneled through the two auctions runs on the order of ~5–6M vehicles per year (derived from ~290M US vehicles in operation, accident frequency, and a ~23% total-loss rate — not cleanly disclosed, so treat as an estimate). This is distinct from, and far smaller than, the ~22M-unit, ~$230B US whole-car/wholesale market (dealer/commercial), which is Copart’s adjacency, not its core.

The secular driver — total-loss frequency (TLF). This is the structural growth engine, and it is unusually well-corroborated. Copart cites TLF of 23.6% in Q1 calendar 2026, up ~5 percentage points over four years. Independently, CCC Intelligent Solutions reports a record 23.1% of claims totaled in 2025, the highest in its historical data and on track for a second straight record. TLF rises because of a structural collision between two forces: (a) repair-cost inflation and ADAS complexity — average repair cost ~$4,818 in 2025, with >28% of repairable estimates now requiring ≥1 sensor calibration (each adding $350–$500), and ADAS appearing in more than half of vehicles; and (b) a depreciating, aging fleet — average US vehicle age ~12.7 years, with >70% of total-loss valuations on vehicles 7+ years old. As repair costs rise against falling residual values, ever more cars cross the total-loss threshold. EVs (more labor hours, more parts, higher labor cost) reinforce the trend. This is a multi-decade, mechanically-driven tailwind, and it is real.

The cyclical counter-currents (the bear’s ammunition). Two forces push the other way. First, accident frequency is declining as ADAS prevents crashes — fewer claims overall, partly offsetting rising TLF. Second, and currently dominant, insurance affordability: after years of double-digit premium inflation, consumers are dropping or thinning coverage. Earned car years fell ~4% YoY in Q4 CY2025 while vehicles-in-operation grew ~1.4% — a clear divergence indicating underinsurance — and CCC data show ~25% of repairs are now self-pay. Fewer insured vehicles means fewer insured total losses flowing to auction, the proximate cause of Copart’s US volume softness. Management argues, with multi-decade historical support, that this retrenchment is cyclical and counter-inflationary (consumers re-up coverage when premiums ease).

Regulation — a moat-reinforcer, low antitrust heat. The federal NMVTIS system legally requires insurers, states, and salvage yards to report total-loss/salvage vehicles, and salvage “brands” are permanent in the title record — formalizing and legitimizing the auction channel in favor of compliant, scaled operators. State-by-state salvage-title variation adds compliance complexity that scale players absorb more easily. Zoning and environmental permitting for new yards is the binding entry barrier (intense local NIMBY opposition; permitting can take years). The RB Global/IAA merger cleared in 2023, leaving an 80–90% two-firm market; antitrust risk is latent and low — the practical check is that carriers dual-source and retain fee leverage.

Marathon capital-cycle lens. This is an industry where capital cannot easily flood in to compete away returns — the supply side is constrained by permitting, land, and two-sided liquidity, not by capital availability. That is the textbook condition for durable high returns. The one crack: RB Global did deploy ~$7B of capital to revive a sub-scale #2, and that capital is now earning its keep at Copart’s expense — a reminder that even permit-protected duopolies can see the weaker player rehabilitated by a deep-pocketed owner.

Verdict: a structurally attractive industry — high barriers to entry, a multi-decade secular volume tailwind, regulatory reinforcement, and benign capital-cycle dynamics — currently absorbing a cyclical demand dip and a one-off competitive rebalancing. Structurally good; cyclically and competitively in a soft patch.

4. Competitive Position

Copart is the better business inside the duopoly, and the moat is nameable in Greenwald’s taxonomy: demand-side captivity (two-sided network effects) reinforced by economies of scale, sitting atop a physical, permit-protected land advantage. Each leg is real, and each must be pressure-tested.

Two-sided network effects (the core moat). Copart matches insurance sellers against a global buyer base in 160+ countries, with international members representing ~40% of vehicles sold and nearly half of proceeds. The logic is self-reinforcing: the deeper and more global the bidder pool, the higher the realized sale price; the higher the price, the more volume insurers route to Copart; the more volume, the deeper the pool. Management’s Q3-FY26 commentary on “crossover buyers” is the clearest evidence the flywheel is live and not a slide-deck abstraction: of 30,000+ buyers who first entered Copart’s ecosystem over three years via non-insurance vehicles, a strong majority bid on an insurance vehicle within 90 days — the platform manufactures its own demand-side liquidity. This is genuine demand-side captivity: a sub-scale rival cannot replicate the marginal international bidder in West Africa or Central Europe who sets the clearing price on a flood-damaged Lexus.

The land moat (the differentiator versus IAA). Copart owns the substantial majority of its ~281 yards (secondary estimates ~90% of land, ~18,000 acres plus reserved surge capacity), while IAA leases far more of its footprint. This matters in three concrete ways: (i) catastrophe surge capacity — Copart deliberately holds idle “Mega Yard” land (~30% slack in hurricane-prone regions) to absorb tens of thousands of cars overnight after a Helene or Milton; a leasing competitor cannot economically warehouse idle land at that scale; (ii) a zoning/NIMBY entry barrier — Copart’s permitted footprint is effectively non-replicable by a new entrant; (iii) a cost shield from rent inflation and landlord leverage. The land is on the balance sheet at ~$3.6B net PP&E, much of it carried at historical cost — an understated asset.

Technology and switching costs (the contested legs). VB3 and the member network are the demand-side infrastructure, but IAA now has comparable online technology — this leg is trending to parity, not widening. Switching costs are moderate, not a fortress: insurers sign multi-year salvage contracts integrated into CCC/Mitchell claims workflows, but large carriers maintain dual relationships and run periodic RFPs — which is precisely the mechanism by which Progressive shifted ~15 points of its salvage allocation to IAA. The durable advantages do more work than contractual lock-in.

Copart vs. IAA — the financial verdict. Copart is the structurally superior operator: ~36–38% operating margins versus a historically under-earning IAA, and a reported ROIC many points higher (the precise gap is a secondary estimate). IAA’s post-2020 share loss is why RB Global bought it. But the competitive picture has genuinely changed since 2023. Under RB Global, IAA is exceeding service-level targets, posted +16% adjusted EBITDA on +7% GTV in Q3-2025, has outpaced the market for three consecutive quarters, and won the Progressive reallocation flowing into units by January 2026. Both Progressive and State Farm have had RFPs out with both firms. Copart, for the first time in a decade, faces a competent rather than a crippled competitor.

Verdict: a durable advantage — but no longer a one-sided one. The land-and-network moat is real, named, and tied directly to financial outcomes (it is why Copart earns 36% margins and IAA historically did not). It would not survive a sub-scale entrant; it is being tested, at the margin, by a re-capitalized incumbent. Durable moat, narrowing lead.

5. Growth History and Forward Opportunities

History. Copart has compounded revenue from $2.04B (FY2019) to $4.65B (FY2025) — a ~14.7% CAGR — and diluted EPS from $0.62 to $1.59, a ~17% CAGR, almost entirely organically (greenfield yards, not M&A). Growth has come from three durable levers operating simultaneously: rising total-loss frequency (more cars per accident), rising ASPs (global buyer demand), and international/non-insurance expansion. The FY2021–22 surge (revenue +30% in FY22) was partly a pandemic ASP spike that has since normalized — the source of the multiple’s subsequent disappointment.

The current air-pocket. FY2026 is the first soft year in memory. Nine-month FY26 revenue was essentially flat (−0.2%), with US insurance units down meaningfully (−4.2% in Q3, and reportedly closer to −10% YoY in the weakest quarter per sell-side estimates). The growth algorithm — modest accident-frequency declines more than offset by rising total-loss frequency — has temporarily inverted because the affordability-driven coverage pullback is shrinking the insured pool faster than TLF can offset, and because IAA is taking a slice of the units that remain.

Forward opportunities (the offsets). Three levers are doing the work while US insurance volume heals:

• International (~17% of revenue, growing fastest): Q3-FY26 international units +5.9%, revenue +14.1% (+7.9% ex-FX), op margin expanding to 31.5% as the UK, Germany, and Canada scale and Germany’s total-loss market matures toward the Copart remarketing model. International non-insurance units grew +11.2%.
• Non-insurance / whole-car (“BluCar,” dealer/fleet/finance/rental consignment): growing >25% YoY, attacking the ~22M-unit US wholesale market. This is a genuine option but an unproven one — Copart is a small challenger here against entrenched incumbents (Manheim/Cox, ADESA-now-Carvana, ACV Auctions, OPENLANE), and the economics are thinner than salvage. Management’s “concentric circles” thesis — that the same buyers and rising total-loss frequency pull ever-better cars onto the platform — is plausible but not yet demonstrated at scale.
• Purple Wave / industrial (GTV +25%): heavy-equipment auctions, diversifying away from the auto cycle. Small.
• Service intensity (Title Express, long-haul delivery, financing): raising revenue-per-unit and reducing buyer friction, an ASP-independent growth vector.

Verdict: historically high-quality growth, currently mid-quality. The long-run drivers (TLF, ASP, international) are durable and largely intact, and pricing power is demonstrably strong (record ASPs). But the unit engine is, for now, stalled by affordability and share loss, and the largest forward TAM (whole-car) is the least proven. This is a high-quality growth franchise navigating its first genuine volume test.

6. Financial Quality

Copart’s financials are, by almost any measure, excellent — and the apparent “deterioration” that helped trigger the de-rate is largely an artifact that dissolves under inspection.

Margins — read the mix, not the headline. Gross margin fell from a 50.0% peak (FY2021) to 45.2% (FY2025), and operating margin from 42.2% to 36.5%. Two facts defuse the “margins are collapsing” reading: (i) FY2021–22 was an unsustainable pandemic peak (freakishly high used-car ASPs on low volumes); FY2025’s 36.5% operating margin is essentially in line with the pre-pandemic FY2019–20 level (35–37%) — this is reversion, not decay; and (ii) the gross-margin optics are diluted by purchased-vehicle (principal-basis) gross-up accounting in the UK/Germany/Spain — grossing up low-margin resale revenue mechanically lowers the percentage even as it adds gross-profit dollars. Facility-operations expense did rise from ~39% to ~42% of revenue over three years (real cost inflation in towing, labor, fuel — the latter flagged on the Q3-FY26 call), a genuine ~300bp operating-margin headwind worth monitoring, but the franchise’s core economics remain extraordinary.

Income statement (FY2019–FY2025, $M).

Returns on capital — the optical-decline trap. ROE fell from 47% (FY19) to 21% (FY25) and ROIC from ~29% to ~16% (ROIC.ai). This looks alarming and is almost entirely an artifact of balance-sheet bloat, not operating deterioration. Copart has accumulated a mountain of idle cash and held-to-maturity securities (~$4.8B at FY25) that earns ~4–5% T-bill yields while sitting in the denominator of every return metric. Ex-cash, the operating business earns far higher returns: ~$1.70B of operating income on roughly $4.5B of operating capital (PP&E + working capital + goodwill) is >35%. The “ROIC decline” is a capital-allocation story (un-deployed cash), not a moat-erosion story. This distinction is the single most important number-reading in the memo.

Cash flow and FCF. FY2025 operating cash flow was $1.80B; reported free cash flow (OCF − $569M capex) ~$1.23B. But capex is dominated by growth investment — land acquisition and new-yard build-out — not maintenance. Maintenance capex is a fraction of the $569M, so owner earnings are materially understated by the reported FCF figure. FCF conversion looks low (~80% of net income) precisely because Copart is plowing ~$570M/year into expanding its irreplaceable land base — a high-return reinvestment, not a leak. Working capital is a modest source/use; the cash-conversion cycle is slightly negative (−8.6 days).

Quality-of-earnings flags (honest accounting, two caveats). Accounting is conservative (agent revenue recognition, E&Y auditor since 2006 with no critical audit matters, no aggressive capitalization). Two caveats: (i) investment income of ~$199M pretax in FY2025 (~10% of pretax income) is earned on the cash hoard and fades if rates fall — strip it for a cleaner operating read; and (ii) SBC is modest (~$38M) and non-distorting. Net income tracks cash earnings closely (cash-flow-to-net-income ~1.16x).

Balance sheet — a fortress. FY2025: cash + ST investments $4.79B, total debt ~$104M (finance leases only), stockholders’ equity $9.19B. Net cash ~$4.69B. As of Q3-FY26, ~$5.5B liquidity ($4.2B cash+HTM after $1.6B of buybacks) and no funded debt; a new $1.25B revolver (Jan-2026, matures 2031) was added as buyback dry powder. Current ratio 8.4x. This is among the strongest balance sheets in the market — arguably too strong .

Verdict: economics are excellent and improve with scale; the reported deterioration is optical. Margins reverted from a peak rather than decayed; returns fell because of idle cash, not business erosion; FCF understates owner earnings because of high-return growth capex. The one real, monitorable negative is facility-cost inflation. This is a financially pristine business.

7. Capital Allocation

Capital allocation is where Copart is simultaneously improving and still imperfect — and where the bull and bear genuinely diverge.

The long-standing critique: cash hoarding. For years Copart did essentially nothing with its cash but accumulate it. It paid zero dividends in its entire public history (since 1994) and repurchased zero shares in FY2023, FY2024, and FY2025. The result was a balance sheet that ballooned to ~$4.8B of net cash earning T-bill yields — capital that dragged consolidated ROIC from ~29% to ~16% and represented an enormous, returns-destroying idle balance. For a business that internally compounds capital at >30%, parking billions at ~5% is value-suppressing. This was the legitimate governance knock on the stock.

The FY2026 inflection (the most important capital-allocation event in years). That changed decisively. In the first nine months of FY2026, Copart repurchased 43,433,164 shares for $1,632.5M at a weighted-average $37.63 — funded in part by a new $1.25B revolver, the company’s first material financing in years. There remain ~282M shares under the authorization (cumulative 502M repurchased to date). The signal is twofold: (i) management is finally returning the idle capital, addressing the central governance critique; and (ii) it is buying at ~$37.63 — above today’s $30 — which is an explicit statement that insiders, who collectively own 9.6% of the company, view the stock as undervalued. When an owner-operator turns on a long-dormant buyback into a falling stock, it is a meaningful tell. The remaining net cash (~$4.2B) still leaves ample dry powder to continue repurchasing into weakness.

Reinvestment — the high-return core. The primary and best use of capital remains greenfield yard expansion (~$570M/year), compounding the irreplaceable land base at high incremental returns. Copart does not buy growth (acquisition spend immaterial), which is a feature — it avoids the serial-acquirer goodwill trap entirely (goodwill is only ~$518M). Purple Wave (Oct-2023, majority stake) and NPA are the only acquisitions, both small and adjacency-diversifying.

The persistent imperfections. Two governance negatives temper the improvement:

• Compensation is returns-blind. The NEO annual bonus is 60% operating-income target + 40% personal goals, and long-term incentives are discretionary stock options — there is no ROIC, ROE, or return-on-capital metric anywhere in the plan. For a business whose entire value proposition is high returns on capital, the absence of a returns hurdle is a real misalignment: it rewards growing the operating-income numerator without penalizing a bloated capital denominator. Say-on-pay passed at 92.4%, so shareholders are not agitating.
• Insiders only ever sell. Across the trailing Form 4 corpus there is not a single open-market purchase (code P). Every insider disposition is a programmatic, 10b5-1-planned cashless option-exercise-and-sell (CEO Liaw sells a ~$1M tranche each quarter; directors monetize grants). Founder Willis Johnson (5.75%) neither buys nor sells materially. There is no insider conviction buying to corroborate the corporate buyback — a notable asymmetry (the company buys; the people don’t).

Verdict: improving, now above-average, but not elite. The buyback restart is a genuine positive that directly addresses the cash-hoard critique and signals undervaluation. High-return greenfield reinvestment and M&A discipline are long-standing strengths. But the returns-blind comp scheme and the total absence of insider buying keep this short of best-in-class capital stewardship.

8. Changes and Headwinds — Last Two Years

Leadership transition (completed, orderly). Jeffrey Liaw is CEO; A. Jayson Adair transitioned to Executive Chairman in April 2023 after years as co-CEO; founder Willis J. Johnson remains Chairman of the Board. This is a multi-year-telegraphed, internal succession — Liaw was CFO then co-CEO before taking the seat — and there is no key-person discontinuity. CFO Leah Stearns (ex-American Tower) brings public-company financial discipline; the FY26 buyback restart and the new revolver bear her fingerprints.

The volume slowdown (the dominant change). The single biggest development is the emergence of US insurance unit softness — global insurance units −2.7% and US −4.2% in Q3-FY26, with the weakest quarter near −10% — after a decade of reliable growth. Two distinct causes (see the Industry section): cyclical insurance affordability/underinsurance, and structural share loss to a reviving IAA.

The competitive rebalancing (the structural change). RB Global’s revival of IAA is the most consequential competitive shift in the industry in years. The Progressive reallocation (from ~75% to ~90% of salvage units to IAA), flowing into units by January 2026, is a concrete, quantified share loss to the now-largest US auto insurer. Pending Progressive/State Farm RFPs leave further reallocation risk live in both directions.

Capital allocation (the positive change). The buyback restart ($1.63B / 43.4M shares) and the new $1.25B revolver mark a clear, shareholder-friendly shift after three years of inertia.

Pricing power (the reassuring constant). Through all of it, US insurance ASPs hit an all-time record (+4.1%) and international/non-insurance volumes grew double-digit — evidence the marketplace’s value proposition and global demand pull are undamaged.

Macro/operational headwinds. Fuel and transportation-cost inflation (flagged on the Q3 call) pressure facility-ops margins; FX translation cuts both ways; the global-conflict backdrop has shifted (not shrunk) international buyer corridors (Middle Eastern participation down, Central Europe/West Africa/Latin America up).

Verdict: the changes are mixed and net the thesis to “show-me.” Leadership and capital allocation strengthened; pricing power held; but the volume slowdown and the IAA share loss are real, thesis-relevant negatives that the franchise must now disprove. On balance, the last two years moved Copart from “unquestioned compounder” to “high-quality franchise with a competitive question to answer” — which is exactly why the multiple reset.

9. Risk Analysis (Risk Matrix)

The dominant, thesis-relevant risks are the top three — all volume/share-related and all medium-likelihood/high-impact. The balance-sheet and solvency risks are negligible; this is not a business that can fail, only one that can grow more slowly and lose some share. The governance risks are near-certain but low-impact (they erode alignment, not value directly).

10. Valuation Discussion (Embedded Expectations)

This memo sets no price target and makes no recommendation . The purpose here is to characterize what the current price embeds.

Where the multiple sits. At $30.05, Copart trades at ~18.8x trailing EPS ($1.59), ~12.1x EV/EBITDA (EV ~$23.6B on ~$27.8B market cap less ~$4.2B net cash), and ~5.0x EV/sales. Against its own ten-year history, this is extraordinarily low: the AZI valuation index places the composite at the 7.9th percentile, P/E at the 7.8th, P/B at the 0.975th (an all-time low on book), and P/S at the 15.0th. Copart has spent most of the last decade between 25x and 40x earnings (the FY2024 fiscal-year average P/E was ~35x); it now trades at a level it has touched only in the depths of the 2022 rate shock. The de-rate is a multiple event: EPS grew every year through it.

Multiple history (ROIC.ai, fiscal-year-average basis).

The current multiple is roughly half the FY2024–25 average on every metric. (Note: P/B is flattered cheap by the cash-swollen book and should be read alongside the others, not in isolation.)

Embedded-expectations math. A ~19x trailing P/E on a business with: 36% operating margins; a net-cash balance sheet (so the operating business trades cheaper than the headline multiple implies — strip ~$4.5/share of net cash and the ex-cash P/E is ~16x); demonstrated pricing power (record ASPs); a secular volume tailwind (TLF); an active buyback shrinking the share count; and a 15-year ~15% growth record — is pricing low-to-mid-single-digit forward EPS growth in perpetuity. That is a materially below-trend expectation. For the multiple to be correct, one must believe the volume softness and IAA share loss are largely permanent — that Copart’s unit algorithm is structurally broken, not cyclically dented.

Scenario framing (illustrative, not a target).

• Bear: affordability drag and IAA share loss prove structural; US insurance units stay flat-to-down; EPS grinds ~$1.60–1.75; the market holds ~16–18x → low-to-mid $20s. The downside is cushioned by net cash and the buyback.
• Base: affordability normalizes over 12–24 months, TLF resumes offsetting accident-frequency declines, international/non-insurance carry growth; EPS compounds ~8–12% to ~$1.85–2.00 over two years; multiple re-rates modestly toward ~20–22x → mid-$30s to low-$40s.
• Bull: US units re-inflect positive, carrier share stabilizes/recovers, ASPs hold, buyback accelerates; EPS toward ~$2.10+; multiple re-rates toward the historical ~25x → high-$40s+.

What the market is underwriting correctly vs. incorrectly. Correctly: that the unbroken-compounder narrative is over and a 40x multiple was indefensible; that IAA is a real competitor again; that near-term unit growth is negative. Possibly incorrectly: that the affordability drag is permanent rather than cyclical; that the secular TLF tailwind is dead (the external data say it is not); and that a net-cash, 36%-margin, pricing-powered duopolist deserves a sub-market multiple. The asymmetry at ~19x is more favorable than at the ~40x the market paid 14 months ago.

Verdict: fair-to-cheap on its own history, reasonable in absolute terms. This is not a deep-value screen-cheap stock; it is a high-quality compounder whose multiple has reset from euphoric to undemanding, with a real competitive question that justifies some (not all) of the discount.

11. Variant Perception

Consensus. The Street is divided but net-constructive — roughly 6 buy / 5 hold / 1 sell, mean target ~$42 (~29% above the current price). Consensus reads the affordability drag as cyclical and views the ~50% drawdown as an overreaction in a quality name, while acknowledging the IAA share-loss risk.

The strongest bull case. Copart is a wide-moat, net-cash, 36%-margin duopolist trading at the cheapest valuation percentile in its public history, where the de-rate is a multiple reset on a still-growing business. The secular driver (total-loss frequency) is intact and externally confirmed; pricing power is at record highs; international and non-insurance growth offset US softness; and management has switched on a $1.6B buyback at prices above today’s. The affordability drag is cyclical and self-correcting (consumers re-up coverage as premiums ease), and once units re-inflect, a quality compounder at 19x re-rates hard.

The strongest bear case. The volume softness is not purely cyclical — IAA, revived under RB Global’s $7B, is structurally taking share (Progressive 75%→90%), and carriers are internalizing more salvage as total-loss economics normalize. US insurance units could stay flat-to-negative for years; ASPs could roll over from record highs; and 19x earnings on a no-unit-growth, share-losing business with a returns-blind comp scheme is fair, not cheap, leaving the de-rate room to run. The whole-car growth option is unproven against entrenched incumbents.

The 3–5 assumptions that matter most:

1. Is the affordability/coverage pullback cyclical or structural? (Cyclical → bull; structural underinsurance → bear.) Falsified for the bull if earned-car-years keep falling for 4+ more quarters with no stabilization.
2. Does IAA keep taking share, or does Copart stabilize its carrier book? Falsified for the bull if a second major carrier (e.g., State Farm) follows Progressive to IAA.
3. Does total-loss frequency keep rising and eventually re-drive units? Falsified for the bear if TLF keeps climbing (CCC data say it is) and US units re-inflect positive within 12–18 months.
4. Does pricing power (ASP) hold? Falsified for the bull if US insurance ASP growth turns negative.
5. Does management keep buying back aggressively into weakness? Falsified for the bull if the buyback pauses despite a sub-$32 stock.

The factor-positioning read (from the momentum/factor workstream): CPRT carries a beta of ~0.85, modest positive loadings to Value (+0.14) and Quality (+0.13), and strongly negative momentum (12-month return −37.6%, 6-month −41%, 3-month −31.5%; lifetime max drawdown −54%). Its factor-similar cluster is quality/dividend-aristocrat names and ETFs (FTCS Capital Strength, NOBL, KNG) plus ADSK — it screens as a quality franchise, not a junk/distressed one. This is the empirical signature of an abandoned-quality / fallen-angel name — a profitable, net-cash, share-repurchasing compounder that the market has sold down on a growth scare — not a falling knife (no balance-sheet stress, no earnings collapse). The tape is washed-out and one-directional, which is consistent with a contrarian-quality setup where consensus may be offsides on the durability of the volume problem, while correctly pricing its existence.

12. Fact vs. Interpretation Table

13. Open Questions

1. What is Copart’s actual current US insurance salvage share, and what is its trajectory? Neither firm discloses a clean number; the 50–65% range is too wide for confidence. The direction (losing share to IAA) is clearer than the level.
2. How much of the Progressive loss is recoverable, and is State Farm next? Pending RFP outcomes are the swing variable for FY27 units.
3. Is the affordability/coverage pullback cyclical or a structural step-down in insured-vehicle density? The entire base case hinges on this, and it is genuinely uncertain.
4. What is true maintenance capex (and therefore true owner FCF) versus the ~$570M total that bundles high-return land growth? The 10-K does not split it.
5. Will the buyback be sustained and sized to the cash generation, or revert to hoarding once the stock recovers? FY26 is one year of evidence.
6. Can whole-car/non-insurance ever be a material, economic business against Manheim/ACV/OPENLANE, or is it a perennial option?
7. Why is there zero insider open-market buying if management is buying back stock at ~$37.63 as undervalued? The corporate/personal asymmetry is unexplained.

14. What Must Be True

For the bull case to be right:

• US insurance unit volume must re-inflect to flat-or-positive within ~12–18 months as affordability normalizes, and Copart must stabilize its carrier book (no further major defections beyond Progressive).
• Total-loss frequency must continue its secular climb and resume driving units (not merely offsetting accident-frequency declines).
• Pricing power (ASP) and the international/non-insurance engines must hold, and the buyback must continue shrinking the share count.
• Falsification test: if, over the next 3–4 quarters, US insurance units remain down mid-single-digits and a second top-5 carrier shifts salvage allocation to IAA, the bull thesis (cyclical, recoverable) is wrong — the volume problem is structural and the multiple is not too cheap.

For the bear case to be right:

• IAA must keep taking share (carrier defections continue), and/or carriers must structurally internalize more salvage, holding US units flat-to-negative for years.
• ASP growth must roll over from record highs, removing the revenue-per-unit offset.
• The affordability pullback must prove a durable step-down in insured-vehicle density rather than a cyclical dip.
• Falsification test: if total-loss frequency keeps rising (CCC data trend) and US insurance units re-inflect positive within ~18 months and US insurance ASPs stay positive, the bear thesis (structural decline) is wrong — Copart was a cyclically-mispriced quality compounder, and 19x will look like a gift.

15. Source Appendix

(See the separate, fuller CPRT_source_appendix.md for complete citations. Key sources below.)

• Copart FY2025 Form 10-K (cprt-20250731, filed 2025-09-26) — segments, business model, revenue disaggregation, risk factors, properties. SEC EDGAR CIK 0000900075.
• Copart Q3-FY26 Form 10-Q (cprt-20260430, filed 2026-05-29) — nine-month financials, buyback (Note 6: 43.4M sh / $1,632.5M / $37.63), revolver (Note 2).
• Copart Q3-FY26 earnings call transcript (2026-05-21) — volume/ASP commentary, total-loss-frequency 23.6%, crossover-buyer flywheel, capital-return commentary, leadership (Liaw/Stearns).
• Copart DEF 14A proxy (filed 2025-10-24) — compensation metrics (no returns metric), ownership (Johnson 5.75%, Adair 3.14%, D&O 9.6%), say-on-pay 92.4%.
• ROIC.ai — multi-year income statement, balance sheet, cash flow, profitability ratios, valuation multiples (reconciled to filings).
• Own-history valuation percentiles (third-party valuation index, 2026-06-25). Adjusted price history — 5-year price arc.
• FactorsToday — factor loadings, leaderboard (risk-adjusted returns), related-stock cluster.
• CCC Intelligent Solutions Crash Course 2025 — independent total-loss-frequency (23.1% record), repair-cost/ADAS data.
• Transportation Today (Nov-2025), CarrierManagement/NAIC (2026), TIKR/GuruFocus (2026) — IAA/RB Global competitive dynamics, Progressive shift, consensus/price action. (Secondary; treat share figures as estimates.)

This article contains no investment recommendation and no price target; the sole position-taking content is the clearly-labeled author’s-opinion block at the top, which is the author’s own independent view and general information only, not investment advice. Facts are sourced; interpretations and assumptions are labeled. Management commentary is treated as hypothesis, validated against filings and external data. Do your own research.

APPENDIX A — Standard Diligence Questionnaire

Copart, Inc. (NASDAQ: CPRT) | Report date: 2026-06-26

Supplemental to the analysis above. Answers grounded in the same sources, labeled Fact / Interpretation / Assumption where it matters.

General

What thoughtful questions have other investors asked about this company? The live debates (mid-2026): (1) Is the US insurance-volume softness cyclical (affordability) or structural (IAA share loss + carrier internalization)? (2) How much share has Copart actually lost to a revived IAA, and is State Farm the next Progressive? (3) Is the buyback restart a permanent capital-allocation shift or a one-off? (4) What is true maintenance capex versus high-return land-growth capex? (5) Can whole-car/non-insurance ever be a material, economic business? (6) Why is total-loss frequency rising, and is it durable? (7) Is 19x earnings cheap for a no-unit-growth year, or just fair?

Cyclicality & Earnings Nature

Are earnings at a cyclical high or low? Interpretation: Earnings are at a record absolute level but the growth rate is at a cyclical low (9-mo FY26 revenue flat). ASPs are at a cyclical high (record); insurance units are at a cyclical low (affordability pullback). Net: earnings are neither euphorically high nor depressed — they are growing slowly through a unit air-pocket, with ASP strength offsetting volume weakness.

Driven by the external environment or internal actions? Both. External: insurance-affordability cycle, total-loss-frequency secular trend, used-car ASPs, FX. Internal: yard expansion, pricing/fee initiatives (Title Express, long-haul), buyer-network cultivation, international rollout.

How stable are revenues? Highly stable in character — a toll on the continuous flow of totaled vehicles — but with cyclical unit swings and catastrophe-driven lumpiness. Revenue has risen every year for >15 years (15% CAGR); FY26 is the first flat year.

Outlook for products/services? How big will this market be? Fact: US salvage pool ~5–6M units/yr; whole-car adjacency ~22M units/$230B. Interpretation: The salvage market grows structurally with total-loss frequency (record 23.6%); international and non-insurance are the incremental TAM. Growing, global, with a durable secular driver.

Business Quality & Competitive Moat

Is the industry getting more or less competitive? More — IAA, revived under RB Global since 2023, has turned from a stumbling rival into a credible one (units +4.7% CY25 vs Copart −2.8%; won the Progressive reallocation). Still a two-firm duopoly, but the lead is narrowing.

How profitable is the business (ROIC, ROE)? Fact: FY25 op margin 36.5%, ROE 21%, ROIC ~16% (ROIC.ai). Interpretation: The headline ROIC/ROE understate the business — ex the ~$4.8B idle cash balance, operating returns exceed 35%. This is a genuinely high-return franchise; the reported decline is balance-sheet bloat, not moat erosion.

How profitable is the industry — competitors, barriers? Two scaled players, 80–90% combined share, very high barriers (permitting/zoning for yards, two-sided liquidity, owned land). Copart is the higher-margin operator; IAA historically under-earned (the reason RB Global bought it).

Can the business be easily understood? Yes — an online auction house for wrecked cars, earning agency/buyer/service fees. Simple model.

Can it be undermined by foreign low-cost labor? No — it is a domestic, land-and-logistics-anchored marketplace; international buyers are a tailwind (they raise ASPs), not a threat.

Do brands matter? Nature of competition? The “Copart” brand matters to buyers (liquidity reputation) but the moat is network + land, not brand. Competition is for insurer assignments (won via auction returns, service levels, and price), dual-sourced and RFP’d.

Customers’ switching costs? Interpretation: Moderate, not a fortress. Multi-year contracts integrated into claims workflows, but large carriers dual-source and run RFPs (how Progressive shifted to IAA). The network/land moat does more than contractual lock-in.

Financial Condition & Balance Sheet

Assets not fully recognized on the balance sheet? Interpretation: Yes — the owned-land footprint (~$3.6B net PP&E, much at historical cost) is likely worth substantially more than carried value, and the permitted-yard entitlements are an unrecognized intangible. The buyer network and insurer relationships are off-balance-sheet intangible value.

Off-balance-sheet liabilities? Minimal — modest operating/finance leases (~$104M). No pension overhang, no material litigation, no funded debt.

How conservative is the accounting? Conservative — agent revenue recognition, E&Y auditor since 2006 with no critical audit matters, modest SBC (~$38M), no aggressive capitalization. Caveat: ~$199M of FY25 pretax income (~10%) is investment income on the cash hoard that fades if rates fall.

How CapEx-hungry is the business? Moderately, by choice. ~$570M/yr, but dominated by growth (land/yard build-out), not maintenance. Maintenance capex is a fraction; owner FCF is understated by reported FCF. The asset base (land) is the moat, so the capex is high-return.

Capital Allocation & Management

How much FCF does it generate, and how is it used? FY25 OCF $1.80B, reported FCF ~$1.23B. Use (FY26 inflection): after years of hoarding (zero buybacks FY23–25, no dividend ever), Copart restarted buybacks — $1.63B / 43.4M shares at ~$37.63 in 9-mo FY26 — plus ~$570M/yr into yards. Philosophy: reinvest in land first, now return excess via buyback (no dividend).

Significant acquisitions recently? No — growth is greenfield. Only small deals: Purple Wave (majority, Oct-2023) and NPA. Acquisition spend immaterial (−$1.2M FY25). No serial-acquirer goodwill risk (goodwill ~$518M).

Buying back shares? Fact: Yes, newly — 43.4M shares / $1.63B FY26-YTD at ~$37.63 (above today’s price), ~282M shares remaining on authorization, funded partly by a new $1.25B revolver. A meaningful, shareholder-friendly shift.

Issuing large amounts of new shares to insiders? No — share count is roughly flat-to-declining (buyback now shrinking it); SBC modest (~$38M, options).

Compensation policy of directors/management? Fact: NEO bonus = 60% operating-income target + 40% personal goals; LTI = discretionary stock options; no ROIC/ROE/returns metric anywhere. Interpretation: A real misalignment for a high-returns business — rewards growing operating income without penalizing a bloated capital base. Say-on-pay 92.4%.

Motivations of management? Founder-influenced, owner-operator culture (Johnson 5.75%, Adair 3.14%, D&O 9.6%). Caveat: insiders are 100% programmatic 10b5-1 sellers with zero open-market buys — the company buys stock; the people don’t. Long-tenured, internally-promoted leadership (Liaw CEO, Stearns CFO).

Valuation & Market Data

ADR, MLP, or K-1 issuer? No — ordinary US common stock, NASDAQ.

Dividend policy? None — never paid a dividend since its 1994 IPO; intends to retain earnings; credit covenants restrict dividends. Capital return is 100% via buyback.

How profitable is the business? Very — 36.5% operating margin, 33% net margin, >35% ex-cash operating returns.

Is net income diverging from cash from operations? No — cash-flow-to-net-income ~1.16x (CFO exceeds NI). Earnings are high-quality cash earnings; the only divergence is high growth capex depressing reported FCF below owner earnings.

Risks & Downside

What factors would cause the stock to decline (further)? Continued share loss to IAA (a second carrier defection), a prolonged or structural insurance-affordability volume drag, ASP rollover from record highs, a used-car-price reversion, or simply a longer-than-expected unit air-pocket keeping growth flat.

Risk of a catastrophic loss? Very low — net-cash, debt-free, profitable, cash-generative, irreplaceable asset base. The risks are to growth and share, not solvency.

Chance of a total loss? Negligible. There is no plausible path to permanent capital impairment for a debt-free, cash-rich, structurally profitable duopolist.

Recent News & Events

Has the business environment changed recently? Yes — materially. (1) US insurance volume softened (affordability + IAA share loss); (2) IAA revived under RB Global and won Progressive’s salvage reallocation (75%→90%); (3) Copart restarted buybacks ($1.63B) and added a $1.25B revolver; (4) ASPs hit record highs; (5) total-loss frequency hit a record 23.6%.

Significant acquisitions? No (greenfield growth; small Purple Wave/NPA stakes only).

Change in accounting policies? None material.

Recent changes — new markets, facilities, management? Leadership settled (Liaw CEO since 2023, Adair Exec Chairman, Stearns CFO); continued yard expansion (~$570M/yr); international growth (UK/Germany/Canada); whole-car (BluCar) and Purple Wave scaling; new long-haul delivery and Title Express service lines.

APPENDIX B — Source Appendix

Copart, Inc. (NASDAQ: CPRT) | Report date: 2026-06-26

Primary sources prioritized over secondary. Quantitative figures reconciled to filings where possible. Accessed 2026-06-26 unless noted.

Primary — SEC Filings (EDGAR CIK 0000900075)

• Form 10-K, FY2025 (period ended 2025-07-31; filed 2025-09-26) — file cprt-20250731.htm. Item 1 (business model, 81% insurance volume, brands), Item 1A (risk factors), Item 2 (281 facilities/properties — the land moat), Note 14 (segments: US $3,855.1M / Intl $791.9M; service vs vehicle-sales split), consolidated statements (revenue $4,646.96M, op income $1,696.7M, diluted EPS $1.59). https://www.sec.gov/Archives/edgar/data/900075/000162828025042946/cprt-20250731.htm
• Form 10-Q, Q3-FY2026 (period ended 2026-04-30; filed 2026-05-29) — file cprt-20260430.htm. Nine-month financials (revenue ~flat −0.2%); Note 6 share repurchases (43,433,164 shares / $1,632.5M / weighted-avg $37.63; ~282M remaining); Note 2 ($1.25B revolver). https://www.sec.gov/Archives/edgar/data/900075/000119312526245578/cprt-20260430.htm
• Form 10-Q, Q2-FY2026 (period ended 2026-01-31; filed 2026-03-03) — cprt-20260131.htm. The soft quarter (revenue −3.6%, EPS $0.36 miss). https://www.sec.gov/Archives/edgar/data/900075/000119312526088593/cprt-20260131.htm
• DEF 14A proxy (filed 2025-10-24) — compensation metrics (60% operating income / 40% personal; LTI discretionary options; no returns-based metric); ownership (Willis Johnson 5.75%, Jay Adair 3.14%, D&O group 9.6%; Vanguard 10.24%, BlackRock 6.01%); leadership (Liaw CEO, Adair Exec Chairman, Johnson Chairman). https://www.sec.gov/Archives/edgar/data/900075/000119312525249664/d84887ddef14a.htm
• 8-K, 2026-01-26 — $1.25B Senior Revolving Credit Agreement (Wells Fargo agent, matures 2031). https://www.sec.gov/Archives/edgar/data/900075/000119312526022730/d64083d8k.htm
• 8-K, 2025-12-11 — annual meeting vote results (say-on-pay ~92.4%: 770,518,442 For / 63,624,957 Against).
• 8-K earnings furnishings — 2025-09-04 (Q4-FY25), 2025-11-20 (Q1-FY26), 2026-02-19 (Q2-FY26), 2026-05-21 (Q3-FY26).
• Form 4 corpus (2024–2026) — reviewed sample; 100% programmatic 10b5-1 option-exercise-and-sell dispositions, zero open-market purchases (code P). CEO Liaw ~$1M/quarter tranches; directors monetizing grants.

Primary — Earnings Call Transcript

• Q3-FY2026 earnings call (2026-05-21), via ROIC.ai transcript tools. CEO Jeffrey Liaw, CFO Leah Stearns. Source for: global insurance units −2.7% / US −4.2%; US insurance ASP +4.1% (record); global gross margin 46.3%; total-loss frequency 23.6% Q1-CY26; crossover-buyer flywheel (30,000+ buyers, majority bid on insurance within 90 days); international units +5.9%, rev +14.1%; liquidity ~$5.5B; FY26-YTD buyback 43.4M sh / >$1.6B; Purple Wave GTV +25%.

Data Sources

• Aggregated financial data (ROIC.ai) — multi-year (FY2019–FY2025) income statement, balance sheet, cash flow, profitability ratios (ROE/ROA/ROIC/margins), valuation multiples (P/E, EV/EBITDA, P/B, P/S — fiscal-year-average history), enterprise value, per-share data. Third-party aggregated; reconciled to the 10-K. Key figures: FY25 EBITDA $1,914.5M; cash+ST investments $4,789M; net cash ~$4.69B; ROIC 16.2%; gross margin trend 50.0% (FY21) → 45.2% (FY25).
• Own-history valuation percentiles (third-party valuation index, 2026-06-25): composite 7.9th, P/E 7.8th (18.8x), P/B 0.975th (3.31x), P/S 15.0th (6.31x); TTM EPS $1.5948; price $30.05. Used for own-history context only.
• Adjusted price history — split/dividend-adjusted OHLCV, 5-year arc: 5yr high $63.84 (2025-05-16), 5yr low $25.70 (2022-06-16), 52-wk high $49.97 (2025-09-04), 52-wk low $29.48 (2026-06-22), current $30.05.
• FactorsToday — factor loadings (Market beta ~0.85; Value +0.14, Quality +0.13; negative momentum); leaderboard (y1 −37.6%, m6 −41%, m3 −31.5%, lifetime max drawdown −54%); related-stock cluster (FTCS, NOBL, KNG, ADSK — quality/dividend-aristocrat names). Statistical estimates; reportable as facts, interpretation regime-caveated.

Secondary — Industry & Competitive (treat share/size figures as estimates)

• CCC Intelligent Solutions, Crash Course 2025 (Q1 & Q4 releases) — total-loss frequency record 23.1% (2025); average repair cost ~$4,818; >28% of estimates require ≥1 sensor calibration; >70% of total-loss valuations on 7+ year-old vehicles; average vehicle age ~12.7 yrs. https://www.cccis.com/reports/crash-course-2025/
• Transportation Today (Nov-2025) — “RB Global rebuild takes hold… Progressive behavior puts new pressure on Copart”: IAA units +4.7% vs Copart −2.8% (CY25); Progressive salvage shift ~75%→90% to IAA; IAA exceeding service targets. https://transportationtodaynews.com/news/36872-rb-global-rebuild-takes-hold-as-shifting-progressive-behavior-puts-new-pressure-on-copart/
• RB Global (NYSE: RBA) investor materials — IAA Q3-2025 adjusted EBITDA +16% on +7% GTV; 2026 framed as first clean post-integration year.
• NAIC / Repairer Driven News (2026), Carrier Management (2026-05-18) — State Farm + Progressive ~37% of US auto premiums; Progressive now #1 US auto insurer.
• TIKR / GuruFocus / Investing.com (2026) — Q2/Q3-FY26 prints, 52-week-low price action, consensus (~6 buy / 5 hold / 1 sell, mean target ~$42).
• In Practise — US wholesale auction market structure (Manheim/Cox, ADESA→Carvana, ACV Auctions, OPENLANE); ~22M-unit / ~$230B whole-car TAM.
• NMVTIS (Bureau of Justice Assistance / AAMVA) — federal salvage-title reporting regime. https://vehiclehistory.bja.ojp.gov/nmvtis_auto
• PRNewswire — Copart investment in Purple Wave (Oct-2023). https://www.prnewswire.com/news-releases/copart-announces-investment-in-heavy-equipment-auction-company-purple-wave-301951593.html

Notes on Reliability

• US salvage market-share split (Copart 50–65% / IAA ~35%) and total salvage unit count (~5–6M/yr) are not cleanly disclosed by either company; cited as estimates. The direction (Copart losing share to IAA) is better-supported than the level.
• ROIC.ai figures are third-party aggregated; for any verdict-driving number, the 10-K/10-Q is primary and governs.
• AZI/FactorsToday percentiles and factor loadings are own-history/statistical context, never cross-sectional valuation or price targets.
• Management commentary (transcript) is treated as hypothesis and validated against filings and external data (total-loss frequency corroborated independently by CCC).