Breaking Down Copart, Inc. (CPRT) Financial Health: Key Insights for Investors

You're looking at Copart, Inc. (CPRT) and seeing a classic mixed signal: a fundamentally strong business model but a stock price that analysts are hesitant to call a clear Buy right now. The core takeaway is that this online vehicle auction leader delivered another year of impressive bottom-line growth, but you need to understand where the top-line is slowing. For the full fiscal year 2025, Copart posted total revenue of $4.65 billion, a solid 9.7% jump, but the real story is the operational efficiency that drove net income to $1.55 billion, a 13.9% increase. That translates to fully diluted earnings per share (EPS) of $1.59 for the year. Still, the market is cautious; despite a Q4 EPS beat of $0.41, the revenue miss and a recent analyst consensus of Hold with an average price target of $50.00 tell you to look deeper. The company's strategic focus on technology is defintely working, especially as global average selling prices (ASP) rose 5.6% in the fourth quarter. We need to map the near-term risks to that $50.00 consensus.

Revenue Analysis

You want to know where Copart, Inc. (CPRT)'s money is actually coming from, and honestly, the story hasn't changed much: it's all about the service fees from their online auction platform. For the fiscal year (FY) ended July 31, 2025, Copart, Inc. delivered a total annual revenue of approximately $4.6 billion, marking a strong 9.7% increase year-over-year (YoY).

That growth is defintely healthy, but the real insight is in the mix. The company's revenue streams are cleanly divided into two major buckets: Service Revenues and Vehicle Sales. Service Revenues are the core business, representing the fees they charge for processing and selling vehicles-think of it as the commission on every auction. Vehicle Sales are the smaller piece, where Copart, Inc. buys and sells vehicles directly.

Here's the quick math on the segment contribution, using the Q2 2025 results as a concrete example. The dominance of the service side is clear:

The Engine: Service Revenue and Volume

Service Revenues are the engine of Copart, Inc., and they grew faster than the total revenue in Q2 2025, increasing by a robust 15.0%. This segment is primarily driven by two factors: an increase in total loss rates (more damaged cars needing auction) and the company's ability to extract higher average auction returns per vehicle. It's a classic high-margin model. The more vehicles they process for insurance companies and other consignors, the more those service fees stack up. This is a business built on volume and market share, and they are masters of it. If you want to dive deeper into their long-term strategy, you can check out their Mission Statement, Vision, & Core Values of Copart, Inc. (CPRT).

Growth Trends and Near-Term Reality

While the annual growth for FY 2025 was a solid 9.7%, you need to be a trend-aware realist. The growth rate has shown some deceleration as we moved into the end of the fiscal year and the start of the next. For instance, Q4 2025 saw a 5.2% YoY revenue increase, and the most recent quarter, Q1 Fiscal Year 2026 (ended October 31, 2025), showed a marginal 0.7% YoY revenue growth, reaching $1.16 billion. That's a significant slowdown. The market is not giving them the same easy lift it was a year ago.

What this estimate hides is the impact of acquisitions, like Purple Wave, which help boost volume and revenue, but the core organic growth rate needs close watching. The main risk is that the total loss rate-the percentage of cars deemed too expensive to repair-could level off or even decline, which would directly pressure their primary revenue stream. The opportunity is their international expansion, which continues to be a key lever for future growth, even if the US market is showing signs of cooling off its rapid growth pace.

• Watch the Service Revenue growth rate; it's the core health metric.
• Look for new land acquisitions to support higher vehicle volume.
• Expect international markets to provide a greater share of growth.

Profitability Metrics

You need to know if Copart, Inc. (CPRT) is turning its massive revenue into real profit, and the answer is a resounding yes, though you should watch the cost-of-service trend closely. For the full fiscal year 2025, Copart, Inc. reported a revenue of $4.6 billion and a net income of $1.6 billion, which translates to a net profit margin of nearly 34.8%.

The company's profitability is exceptional, especially when you compare it to the broader auto industry. Honestly, a net margin this high is rare outside of specialized software or pharmaceutical companies. Copart, Inc.'s model of primarily operating on a consignment basis-collecting fees for services like vehicle transportation and auction access-is the engine for this high margin.

Here's the quick math on the core profitability ratios for the 2025 fiscal year (ending July 31, 2025):

The Gross Profit Margin of 45.65% shows that nearly half of every revenue dollar remains after covering the direct costs of providing the service, like labor and facility expenses. This is a powerful metric. Still, the true operational efficiency shines through in the Operating Margin, which is around 36.51%, demonstrating excellent control over selling, general, and administrative (SG&A) expenses.

Operational Efficiency and Industry Benchmarks

When you look at operational efficiency, Copart, Inc. is a clear outlier. For perspective, the average net profit margin for Auto & Truck Dealerships is typically around 0.9%, and even the broader Industrials sector often sits much lower. Copart, Inc.'s TTM net margin of 33.41% to 35.23% absolutely exceeds industry averages, which tells you they have a massive competitive moat and pricing power.

However, you need to be a trend-aware realist. While the margins are fantastic, the company has seen a slight, persistent decline in both its gross margin and operating margin over time, with average annual decreases of 1.1% and 1.4%, respectively. This suggests that the cost of revenue-things like land lease costs, transportation, and processing-is growing slightly faster than revenue. This is the one financial pressure point to watch.

• Gross margin trend is softening: Average annual decline of 1.1%.
• Net margin remains exceptional: Strong cost management below the gross profit line.
• Profitability is a competitive advantage: Far surpasses typical auto industry peers.

The strong net income growth-up 13.9% for the full fiscal year 2025-despite the slight margin pressure, confirms that volume growth and effective management of non-operating expenses are offsetting the rising cost of services. If you want to dive deeper into who is betting on this continued profitability, check out Exploring Copart, Inc. (CPRT) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You want to know how Copart, Inc. (CPRT) funds its massive growth, and the answer is clear: almost entirely through equity, not debt. This is a remarkably conservative financial structure, especially for a company with a market cap this large, and it's a key reason for its financial stability.

As of the fiscal quarter ending July 2025, Copart, Inc. operates with a minimal amount of financial leverage (Debt-to-Equity).

The company's total debt for the quarter was approximately $103.74 million, which is a tiny fraction of its overall balance sheet.

Here's the quick math on their debt levels, showing a very small reliance on external borrowing:

• Short-Term Debt & Capital Lease Obligation: approximately $19.87 million.
• Long-Term Debt & Capital Lease Obligation: approximately $83.87 million.
• Total Stockholders Equity: approximately $9,187.03 million.

This is a fortress balance sheet.

The Debt-to-Equity (D/E) ratio for Copart, Inc. as of July 2025 stood at a mere 0.01, or 1%. This ratio measures the financial leverage a company has, showing how much debt is used to finance assets compared to shareholder equity. To be fair, a D/E of 0.01 is exceptionally low, signaling that the company is overwhelmingly funded by retained earnings and investor capital, not borrowed money.

When you compare this to the broader industry, the difference is stark. Copart, Inc. is an outlier in its capital structure, preferring to fund its global expansion and operational needs through internal cash flow and equity. This strategy significantly reduces interest rate risk and financial distress, which is defintely a plus in a high-rate environment.

Here's how Copart, Inc.'s D/E stacks up against similar companies and the sector average:

The gap is massive. Copart, Inc. is essentially debt-free in the traditional sense, giving it immense financial flexibility for future acquisitions or capital expenditures without needing to tap the credit markets aggressively. This is a core part of their conservative, long-term strategy.

Given this minimal debt load, the company has little need for major debt issuances or refinancing activity. While there hasn't been significant debt news, the market still tracks its financial health; for instance, Weiss Ratings reaffirmed a 'Hold (C)' rating on the stock in October 2025. The key takeaway here is that the company prioritizes equity funding, which means less volatile earnings due to minimal interest expense. This is the kind of balance sheet that lets management sleep well at night, and it should let you sleep well too. For a deeper dive into the company's overall financial picture, check out Breaking Down Copart, Inc. (CPRT) Financial Health: Key Insights for Investors.

Action: Use Copart, Inc.'s low D/E ratio of 0.01 as a benchmark for financial conservatism when evaluating other companies in the vehicle remarketing space.

Liquidity and Solvency

You want to know if Copart, Inc. (CPRT) can cover its near-term bills, and the short answer is an emphatic yes. The company's liquidity position is defintely one of the strongest I've seen in decades, reflecting a highly conservative and cash-rich operational model. This isn't just a healthy balance sheet; it's a fortress.

Assessing Copart, Inc.'s Liquidity

The core liquidity metrics-the Current Ratio and Quick Ratio-show a massive buffer against short-term obligations (current liabilities). For the fiscal year ending July 31, 2025, Copart, Inc.'s Current Ratio stood at an extraordinary 8.42. Here's the quick math: Current Assets of $5.75 billion divided by Current Liabilities of $683.28 million. A ratio above 1.0 is considered healthy; a ratio over 8.0 is exceptional and signals an enormous capacity to meet obligations.

The Quick Ratio (or acid-test ratio), which strips out inventory (assets that take longer to convert to cash), tells a near-identical story. Copart, Inc.'s inventory is minimal, totaling only $39.66 million for FY2025. This is because their business model focuses on consignment-they sell vehicles for others, so most of the cars on their lots aren't actually their assets. This low inventory means the Quick Ratio is barely different from the Current Ratio, landing at approximately 8.36. This is a clear indicator that nearly all their current assets are highly liquid, like cash and receivables.

The Working Capital (Current Assets minus Current Liabilities) for Copart, Inc. is a massive surplus of approximately $5.07 billion. This trend shows the company consistently generates and retains significant capital, a hallmark of a business with a wide economic moat (a structural competitive advantage). What this estimate hides is that such a high ratio can sometimes suggest capital isn't being put to its most efficient use, but for Copart, Inc., it primarily reflects their strategy of funding land purchases and tech investments with cash, not debt.

Cash Flow Statements Overview

The cash flow statement for FY2025 reinforces this financial strength. Strong cash flow from operations is the lifeblood of any growing company, and Copart, Inc. delivered:

• Operating Cash Flow: A robust inflow of $1.80 billion. This shows the core business is highly profitable and converts sales into cash very effectively.
• Investing Cash Flow: A net outflow of $587.45 million. This negative number is actually a positive signal for growth-minded investors, as it represents the cash being funneled into expanding their land footprint and enhancing their technology platform.
• Financing Cash Flow: A modest net inflow of $52.11 million. This is low, which is good. It confirms the company is not relying on debt or new equity to fund operations or growth; they use their own cash.

Honestly, when you look at these numbers, there are no potential liquidity concerns in the near-term. The strength is overwhelming. The company is generating cash from its core business, using that cash to invest heavily in its own growth, and maintaining a massive cash reserve of $2.78 billion. This gives them incredible optionality for future acquisitions or for weathering any unexpected economic downturns. If you want to dive deeper into who is betting on this cash-rich model, you should check out Exploring Copart, Inc. (CPRT) Investor Profile: Who's Buying and Why?.

Next step: Portfolio Manager: Model a scenario where Copart, Inc. uses 50% of its current cash reserve for a large-scale land acquisition by month-end.

Valuation Analysis

You're looking at Copart, Inc. (CPRT) right now and wondering if the market has it pegged correctly, especially after a tough year for the stock. The direct takeaway is that while the stock has dropped significantly, its valuation multiples still suggest it's priced for growth, which is why the analyst consensus is a cautious 'Hold.'

The company's valuation metrics, based on the most recent data from November 2025, show a premium relative to the broader market, which is typical for a high-quality platform business. Here's the quick math on where Copart, Inc. stands:

• Price-to-Earnings (P/E) Ratio: The current P/E ratio is around 25.84. To be fair, this is lower than its 10-year historical average of 29.14, but it still signals that investors are paying a high price for each dollar of earnings.
• Price-to-Book (P/B) Ratio: The P/B ratio is 4.33. This is a solid indicator of a company with strong intangible assets and high returns on equity, since the market values it at over four times its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): At 17.94, the EV/EBITDA multiple is also on the higher end, but it has actually improved by over 22% from its 12-month average of 23.66. This metric is defintely a better way to compare Copart, Inc. to peers because it factors in debt and cash, giving a cleaner operational view.

The market is still expecting strong future profitability, even with a recent stock slump. You can dive deeper into the ownership structure and institutional conviction by Exploring Copart, Inc. (CPRT) Investor Profile: Who's Buying and Why?.

Stock Performance and Dividend Profile

The stock price trend over the last 12 months is the clearest near-term risk. As of mid-November 2025, Copart, Inc. stock has decreased by approximately 27.42% over the past year. That's a serious pullback.

The stock has traded in a wide 52-week range, hitting a high of $64.38 and a low of $39.58. The latest closing price is hovering around the low end of that range, at approximately $41.37. This volatility reflects market concern over broader economic conditions and perhaps a slowdown in automotive gross transaction value (GTV) per lot, which was down 1% in the second quarter of the 2025 fiscal year.

One simple thing to note is that Copart, Inc. is a growth-focused company, so it does not pay a regular dividend. The trailing twelve months (TTM) dividend yield is 0.00%. This means the company is reinvesting all its earnings back into the business for expansion and technology, which is what you want to see if you're betting on long-term capital appreciation, not income.

Analyst Consensus and Forward View

The professional analyst community maintains a mixed, but generally cautious, stance on Copart, Inc. The current average rating is a 'Hold'. This isn't a strong conviction to buy, but it's not a panic sell either; it suggests analysts believe the stock will perform in line with the overall market for now.

The consensus price target is set at $50.00. With the stock trading near $41.37, that target implies an upside of about 20.86% over the next year. What this estimate hides is the dispersion of opinions, which is quite wide:

The most recent earnings beat the consensus EPS estimate, reporting $0.41 versus the expected $0.40. Still, revenue came in slightly below estimates at $1.16 billion. So, the company is managing its costs well, but top-line growth is the key variable to watch. Your next step should be to monitor the Q1 2026 earnings, which are scheduled for late November 2025, to see if the revenue picture improves.

Risk Factors

You're looking at Copart, Inc. (CPRT)'s strong financial results-a fiscal year 2025 global revenue of approximately $4.6 billion and net income of about $1.6 billion-and thinking, what could possibly go wrong? Honestly, even the best-run companies have clear headwinds. The risks for Copart are less about internal failure and more about external market shifts and regulatory pressure. You need to map these near-term risks to your investment thesis.

The most immediate operational risk we saw in the Q4 2025 earnings was a slight dip in volume. U.S. insurance volume declined by 2.1% in the fourth quarter, with a global decline of 1.9%. This is a direct result of the natural, cyclical volatility in insurance carrier activity and shifts in the population of uninsured motorists. It's a good reminder that Copart's core business is tied to the unpredictable nature of the auto insurance market. You can't control the number of accidents, so you have to control everything else.

Here's the quick math on why this matters: Fewer total loss vehicles means fewer units for auction, which directly impacts service revenue. While the full fiscal year 2025 saw global insurance volumes grow by 4.5%, that Q4 slowdown is defintely a trend to watch, especially since service revenue is the company's bread and butter. For a deeper dive into the buyers driving this volume, you should check out Exploring Copart, Inc. (CPRT) Investor Profile: Who's Buying and Why?

Beyond the volume volatility, the company faces two major external forces: regulatory changes and rising costs. The salvage auction industry is highly regulated, and any legislative action that changes rules around storage fees or the total loss threshold-the point at which an insurer decides to total a car instead of repairing it-could impact profitability. Also, rising operating expenses are a constant challenge.

The company is mitigating these risks through smart, concrete actions. They are investing heavily in technology and real estate to improve efficiency and capacity, which helps compress cycle times and manage costs.

• Regulatory Uncertainty: Changes to trade policy and tariffs on auto parts increase repair costs, which is a double-edged sword. It generally boosts the total loss frequency (more cars totaled), but the uncertainty around pending federal guidance is a risk.
• Operational Cost Creep: Facility-related operating expenses are rising as Copart expands its footprint. For example, facility operations costs rose significantly year-over-year to approximately $496.5 million, highlighting the need for efficient land use.
• Competitive Pressure: Although Copart is a market leader, the vehicle auction space is competitive. They must continually leverage advanced Artificial Intelligence (AI) to maintain their edge in auction liquidity and seller decision support.

The strategic response to these challenges is clear, focusing on capacity and technology. The acquisition of land, like the Hull Ranch, is a direct plan to handle catastrophe (CAT) events and the resulting surge in vehicles, which is a key part of their business model. They are also seeing strong growth in international markets, which represented about 40% of all vehicles sold at U.S. auctions, providing a solid diversification strategy.

Growth Opportunities

You're looking at Copart, Inc. (CPRT) because you want to know if the growth story still holds up, especially after a solid fiscal year 2025. The direct takeaway is this: the company is defintely positioned for continued growth, not just from market tailwinds but from its unique, high-margin business model and strategic technology investments.

For the full fiscal year 2025, which ended in July, Copart, Inc. delivered impressive results, with total revenue hitting $4.65 billion, a strong increase driven largely by its core service revenue. Net income also saw a healthy jump to $1.55 billion, translating to a diluted earnings per share (EPS) of $1.59. That's a 13.6% annual EPS rise, which shows the business is highly efficient at converting revenue into profit.

The Engine: Total Loss Frequency and High-Margin Services

The biggest, most reliable growth driver for Copart, Inc. isn't a new product; it's a secular trend in the auto industry: increasing vehicle complexity. Modern cars are packed with expensive sensors and advanced driver-assistance systems (ADAS), making even minor collisions far pricier to repair. This pushes more damaged vehicles into the total loss category, which is Copart, Inc.'s bread and butter. It's a simple equation: higher repair costs mean more salvage volume for the auction platform.

Plus, the company has strategically shifted toward its high-margin service revenue-fees from processing, storage, and auction services-which grew by 11.4% for the full fiscal year 2025. This focus on services, rather than just vehicle sales, insulates their profitability from the volatile used car market. That's smart business.

• Rising repair costs drive total loss frequency.
• Service revenue is the core profit engine.
• Technology enhances operational efficiency.

Strategic Levers and Global Reach

Copart, Inc. is using its cash to solidify its competitive moat (a long-term advantage that protects a company from rivals). Their extensive land ownership strategy is a massive advantage-it gives them control over logistics and storage, which is a major barrier to entry for competitors. They own the real estate, so they control the cost.

In terms of new markets, international expansion is key. The international segment's service revenue grew by a substantial 18.9% in fiscal year 2025, showing their model translates well outside the U.S. They're also diversifying beyond insurance write-offs into the 'Blue Car' segment, which serves banks, rental companies, and fleets, and their strategic acquisition of Purple Wave is expanding their reach into heavy machinery and equipment auctions. You can read more about who is investing in this strategy here: Exploring Copart, Inc. (CPRT) Investor Profile: Who's Buying and Why?

Future Financial Projections and Competitive Moats

Wall Street analysts are forecasting continued, albeit slower, growth. The consensus for fiscal year 2026 revenue is around $5.0 billion, which represents a solid growth rate of about 7.6%. Earnings are expected to follow suit, with a projected net income of approximately $1.68 billion. Here's the quick math: the business is built to scale, and their competitive advantages are structural.

The company's technology, particularly its VB3 virtual bidding platform and proprietary, AI-enabled systems, drives transaction efficiency and higher net margins. This digital ecosystem, combined with their dominant U.S. market share of roughly 40%, creates a powerful flywheel effect. Buyers flock to the platform with the most inventory, and sellers flock to the platform with the most buyers. It's a classic network effect.

What this estimate hides is the potential for a catastrophic weather event, like a major hurricane, which can cause a temporary spike in volume and revenue, but those are unpredictable one-offs. The underlying strength is in the day-to-day business model.