Copart, Inc. CPRT
Verdict: Hold. Fair value $41.42 against a price of $38.53 on 6 Jan 2026, 7% above the price.
In plain words
The case for: Wide competitive moat provides durability. Market leadership enables pricing power. Industry tailwinds with growing market.
The case against: The company has a 100% earnings beat rate over the last four quarters, but the surprises are....
Main risks
- Questionable Incremental Returns: The calculated 3-year ROIIC of 9.6% is below the 10% threshold for good capital allocation, suggesting that recent investments are generating lower returns than the company's historical average. This is a potential red flag given rising CapEx.
- Negative Market Sentiment: Despite strong fundamentals, the stock is trading near its 52-week low, down significantly from its high. This disconnect warrants investigation into potential macro headwinds or competitive pressures not yet visible in annual financials.
- Slowing Growth Trajectory: While still robust, revenue growth has stabilized in the high single digits (~9.7%) after a period of faster expansion. The law of large numbers may be making future double-digit growth more challenging to achieve.
- Overhang: The primary overhang is the stock's significant underperformance over the past year (down ...
- Technical signals bearish (sell)
- Market volatility