$18.02
$44.15
bear $18.02
base $30.12
bull $44.15
margin of safety $17.00
market price* $27.87
Copart runs online auctions for wrecked, flood-damaged and otherwise total-loss vehicles. Insurance companies are the main sellers: when a car is written off, Copart tows it to one of its yards, stores it, titles it and sells it online to dismantlers, rebuilders, used-car dealers and exporters in more than 170 countries. It collects fees from both sides of the sale. In the United States it is one of two national players, the other being IAA, now owned by RB Global. About 73% of fiscal 2026 sales were in the United States. The rest came from the United Kingdom, Germany, Spain, Finland, Canada, Brazil, the Gulf states and other markets. What protects the business is its land. Copart owns most of its yards, roughly $3.7 billion of property and equipment, in places zoned for wrecked-vehicle storage near major roads. That land is hard to duplicate, and it can take in a sudden flood of cars after a hurricane or hailstorm. What changed this year. Fiscal 2026 (ended July 31, 2026) was flat. Revenue was $4.67 billion against $4.65 billion. U.S. service revenue fell $63 million, partly because fiscal 2025 included one-time revenue from Hurricanes Helene and Milton and partly because U.S. unit volume fell. Higher revenue per car and international growth offset this. Operating income fell about 3%. Copart also did two new things. It bought back 43.4 million shares for $1.63 billion, at an average of $37.63, cutting the share count to about 926 million. On September 10, 2026 it signed an agreement to buy ACV Auctions, an online wholesale marketplace where dealers trade used cars, for $10.50 a share in cash, about $1.9 billion. ACV is growing (revenue rose from $637 million in 2024 to $760 million in 2025) but has never made a GAAP profit, and its cash flow after stock-based pay is close to zero. Closing is expected by the end of calendar 2026. It still needs a majority tender of ACV shares and antitrust clearance. Our numbers assume the deal closes and treat the $1.9 billion as already spent. Owner earnings. We start from operating cash flow and remove working-capital timing swings. We then charge stock-based pay as a real cost, and deduct the share of capital spending needed to keep the yard network as it is. Spending on new capacity is treated as growth, not upkeep. On that basis, owner earnings per share were $1.09 in fiscal 2022, $0.99 in 2023, $1.13 in 2024, $1.26 in 2025 and $1.50 in 2026. Two adjustments matter. First, those figures include interest Copart earned on its large cash and Treasury-bill holdings, about $182 million before tax in fiscal 2026. We count that cash separately below, so we take its interest out of the earnings stream to avoid counting it twice. Second, fiscal 2026 capital spending fell to $337 million from $511-569 million in each of the three prior years. That flatters the 2026 figure, and we do not treat the lower spending as permanent. On the operating business alone, owner earnings were about $1.06 billion in 2022, $0.90 billion in 2023, $0.98 billion in 2024, $1.09 billion in 2025 and $1.29 billion in 2026. We take the median of those five years, about $1.06 billion, or roughly $1.14 per current share, as the starting level. That window covers the used-car price spike of 2022, its unwinding in 2023, and today's flat volumes. Amortization of acquired intangibles is small (under $15 million a year), and there have been no write-offs, so no wasting-asset adjustment is needed. Balance sheet. Copart has no borrowings. Its only debt-like items are $2.7 million of finance leases and a $16.6 million minority interest. At July 31, 2026 it held $1.91 billion of cash and $2.58 billion of Treasury bills, $4.49 billion in total. We set aside $400 million for the cash advances and handling costs that winter and storm peaks require. We deduct the $1.9 billion ACV price and add ACV's own cash net of its credit line, about $37 million. That leaves about $2.2 billion, or about $2.37 per share, of surplus cash on top of the operating business in every case. Its new $1.25 billion revolving credit line (maturing January 2031) is undrawn apart from letters of credit. Base case. Owner earnings grow 3% in the first year. That is below the 2026 result, which was helped by low capital spending, and reflects flat U.S. volumes. Growth is then 5% a year through year ten, and earnings hold flat after that. The growth we credit comes from mechanisms Copart has run for more than a decade, through the 2008-2009 recession and the 2020 shutdown, and paid for with its own cash. They are: steady fee increases, yard additions, international expansion, and the long-running rise in the share of damaged cars written off rather than repaired, which management reports and which repair-cost trends support. Revenue grew faster than 10% a year over fiscal 2017-2025, so 5% is well inside the record. We give no credit to ACV turning profitable, to winning share from IAA, or to new markets. Beyond year ten we assume no growth: the zoned land network and the two-player structure are evidence that earning power lasts, but not that it keeps growing. ACV is treated as adding a modest $12 million a year, its current cash generation. The operating business is worth about $25.9 billion. With no debt and $2.2 billion of surplus cash, shareholders' value is about $28.1 billion, or $30.12 per share. Bear case. We model a downturn of the kind salvage auctions have actually been through. In the 2020 shutdown, Copart's owner earnings per share fell about 27% as accident counts collapsed while it kept spending on yards. In the 2023 used-car price unwinding they fell about 9%. In this case earnings fall 15% in year one and another 5% in year two, then recover at 8% a year for three years and slow to 2%. ACV loses about $40 million a year for five years because integration goes poorly. After year ten, earnings decline 3% a year for good. That reflects Copart's own stated risk that driver-assistance and autonomous-vehicle technology reduces accident frequency. The operating business plus ACV is worth about $14.6 billion. With no debt and $2.2 billion of surplus cash, that comes to about $16.8 billion, or $18.02 per share. The business carries no debt in this case, so there is nothing to refinance. Bull case. U.S. volume recovers, and the fee increases and international growth Copart has shown continue: 6% growth in year one and 8% a year through year ten. That is still below the company's own record. Growth then slows to 3% a year for the following decade before leveling off. ACV's growing dealer marketplace reaches about $60 million a year of owner earnings within five years. The business is worth about $39.0 billion. Adding $2.2 billion of surplus cash and subtracting no debt gives about $41.2 billion, or $44.15 per share. Margin of safety price. We are fairly confident in the earnings level. Copart has made money every year for decades, cash flow ties out to reported profit in every year we checked, and it has no debt. The worst plausible outcome goes beyond our bear case: a long fall in accident frequency as driver-assistance spreads, together with ACV proving a $1.9 billion mistake. Even then, Copart owns its land, owes nothing, and holds more cash than the ACV price, so the company would survive. Its shareholders would simply own a business that no longer grows. The two things we are most likely to be wrong about are growth and the ACV price. If Copart never grew again from today's normalized level, the shares would be worth about $21. If the starting level were also 10% too high, about $19. The business pays a small return over the holding period: there is no dividend, and recent buybacks are the main way cash comes back to owners. So almost all of a 20% annual return would have to come from a starting price at which flat-to-modest growth alone carries the shares well above that price within a few years. At $17, the price covers about $14.60 for an operating business earning about $1.14 a share plus $2.37 of surplus cash. The base case implies the shares are worth about $40 within five years, which from $17 implies more than 20% a year. Even our downturn case leaves the shares above $17 within a few years. The margin-of-safety price is $17. No condition beyond price is needed. Change since our previous analysis. Two things in the business moved our figures. The signed ACV purchase commits about $1.9 billion of Copart's cash to a business that does not yet earn a meaningful profit, which lowers every case. The $1.6 billion buyback reduced the share count, which partly offsets that. The previous figures were built on a different basis and are not directly comparable.