Is Copart, Inc. (CPRT) A Good Stock To Buy Now?

Is CPRT a good stock to buy? We came across a bullish thesis on Copart, Inc. on Inelastic Models's Substack. In this article, we will summarize the bulls' thesis on CPRT. Copart, Inc.'s share was trading at $28.10 as of June 29th. CPRT's trailing and forward P/E were 17.46 and 16.67 respectively according to Yahoo Finance.

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Copart, Inc. is the dominant player in the U.S. salvage vehicle auction market, operating alongside only one meaningful competitor and benefiting from a highly resilient business model that connects insurance companies with a global network of vehicle buyers. The company earns fees from both sellers and buyers while leveraging a vast network of owned salvage yards, integrated logistics, and an efficient online marketplace that has become deeply embedded in insurers' claims workflows.

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Its competitive position is reinforced by three durable advantages: an irreplaceable land network built over four decades, a large and self-reinforcing buyer ecosystem that drives superior auction prices, and high switching costs created through operational integration with insurance carriers. Although reported free cash flow appears constrained by elevated capital expenditures, much of this spending is directed toward acquiring strategic land rather than maintaining existing operations, making it growth investment that expands the company's competitive moat.

On normalized owner earnings of approximately $1.81 billion, the shares trade at roughly 17.6x owner earnings, with the valuation implying an estimated intrinsic value of around $40 per share versus the current price of $33.23, representing roughly 17% upside to the base case. In a more optimistic scenario, intrinsic value could reach approximately $56 per share if international expansion accelerates and returns on invested capital remain strong.

Additional long-term tailwinds include increasing vehicle total-loss rates driven by rising repair costs, appreciation of strategically located land holdings, and significant international expansion opportunities. While competitive pressure, governance concentration, and changing electric vehicle repair economics remain risks, the company's consistent capital allocation, high returns on invested capital, and long reinvestment runway position Copart as a high-quality compounder capable of delivering attractive long-term shareholder returns.