Strong Gross Profit Margin
Strong Net Profit Margin
High Return on Equity
Low Debt Levels
High Liquidity Ratios
Strong Insurance Volume Growth
Technological Advancements and Integration
Diverse Seller Base Expansion
Ongoing Investments for Future Growth
Expansion of Title Express Platform
Potential for New Revenue Streams
High Valuation Ratios
High Price to Free Cash Flow Ratio
No Interest Coverage
Market Uncertainties
Overall, Copart Incorporated demonstrates strong business quality with solid growth metrics, technological advancements, and a diverse seller base. However, it must navigate macroeconomic uncertainties as it pursues future growth opportunities, particularly through its Title Express platform and consignment model transitions.
Analysis Date: February 20, 2025
Last Updated: March 11, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$58.04
Current Market Price: $54.59
IV/P Ratio: 1.06x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
6.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for CPRT
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (36.16)
P/B ratio ≤ 1.5 (6.33)
Current ratio ≥ 2.0 (7.89x)
Long-term debt < Net current assets (0.02x)
Margin of safety (6.0%)
CPRT does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The net profit margin of 32.27% indicates that CPRT is highly efficient in converting revenue into actual profit, reflecting strong operational performance.
With a return on equity of 18.83%, CPRT demonstrates effective use of shareholder equity to generate profits.
The P/FCF ratio of 51.49 suggests that the market is valuing the company's free cash flow quite aggressively, which could indicate potential overvaluation.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
18.83%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
4.22%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
58.66%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
32.27%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
With a debt to equity ratio of 0.014 and debt to assets ratio of 0.013, CPRT demonstrates a very low level of debt, indicating strong financial stability.
The current ratio of 7.89 and quick ratio of 7.79 indicate excellent liquidity, meaning CPRT has more than enough short-term assets to cover its liabilities.
An interest coverage ratio of 0.0 indicates that the company does not have any interest expenses, which may be misleading and could raise concerns about future financing needs.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.01x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q2 2025
Current Ratio
Current assets divided by current liabilities
7.89x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q2 2025
CPRT's global insurance volume grew by 8% year-over-year, indicating strong demand for their services, especially in light of increased total loss frequency which has reached all-time highs.
The company is leveraging AI-enabled image recognition tools to enhance the accuracy and efficiency of total loss assessments, which strengthens their competitive advantage.
CPRT is successfully expanding its seller base beyond insurance to include financial institutions and rental car fleets, enhancing auction liquidity and diversifying revenue streams.
CPRT continues to invest aggressively in technology, real estate, and human resources, positioning itself for sustained future growth.
The Title Express platform is gaining traction, processing over 1 million titles annually and showing potential for further growth as insurers increasingly trust CPRT with more of their workflow.
The transition of key customers to a consignment model in Germany and the UK is expected to enhance margins and revenue potential.
The company is facing macroeconomic uncertainties that could impact seller behaviors and overall auction volumes, as noted by cautious seller approaches.