We came across a bullish thesis on Copart, Inc. on Ridire Research’s Substack. In this article, we will summarize the bulls’ thesis on CPRT. Copart, Inc.'s share was trading at $46.19 as of August 8th. CPRT’s trailing and forward P/E were 30.59 and 26.11, respectively according to Yahoo Finance.
Copart (CPRT), a global leader in online salvage and resale vehicle auctions, is being initiated at a 2% model portfolio weight as a long-term holding rooted in its durable competitive moat and secular growth tailwinds. Founded in 1982, the Dallas-based company operates a patented online auction platform, a global buyer base spanning 180+ countries, and over 250 storage yards worldwide. Its asset-light, consignment-style model generates high margins (~45–50%) and steady cash flows, with Q3 FY2025 revenue up 7.5% YoY despite flat volumes, underscoring its pricing power.
Copart benefits from rising total-loss insurance claims, which reached a record 22.8% in early 2025, as complex and costly vehicle repairs make totaling cars more economical. Weather events and high used-car prices further drive salvage supply. The company’s unmatched physical footprint, global marketplace network effects, proprietary technology, and decades-long customer relationships form high barriers to entry that competitors cannot easily replicate.
Its duopoly position with IAA/Ritchie Bros. provides market stability, while Copart’s superior international reach and auction returns help it gradually win share. Risks—such as lower total-loss frequency from vehicle safety technology, competitive fee pressure, land acquisition constraints, or cyclical volume swings—are viewed as manageable given the moat and diversification.
With minimal debt, significant insider ownership, and disciplined reinvestment in land and technology, Copart is positioned to compound earnings and cash flows over the long term. The market underappreciates its resilient volumes, capital efficiency, and defensiveness, making the current price an attractive entry point. Copart offers a rare blend of market dominance, secular growth drivers, and superior economics that support sustained value creation.
Previously, we covered a bullish thesis on Copart, Inc. (CPRT) by Bulls on Parade in May 2025, which highlighted its dominant salvage auction model, disciplined capital allocation, and global growth. The stock has depreciated by approximately 13.9% since our coverage, as growth slowed. The thesis still stands given Copart’s moat and balance sheet. Ridire Research shares a similar view but emphasizes secular growth tailwinds and pricing power.
