Should you buy Copart (CPRT)?
Updated
A best-in-class specialty services business with 33% margins, a Piotroski F-Score of 8 out of 9, and three earnings beats in the last four quarters is currently blocked from a clean entry by a confirmed death cross, capitulation-level RSI of 26, and a confirmed downtrend—the underlying business quality is compelling, but technical conditions argue for patience until momentum stabilizes.
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Engine methodology range
Range computation requires sufficient peer-comparable data; available for tickers with peer_count ≥3.
What the engine is tracking
| Pillar | Expectation | Trend |
|---|---|---|
The business posts 33% net margins, a Piotroski F-Score of 8 out of 9—the highest quality tier—and ranks best-in-class for margins within its peer group, reflecting a durable operational franchise that sustains profitability through market cycles. Quality breakdown | Net margins remain at or above 30% over the next 12 months, confirming that the franchise quality is structural rather than cyclical. | →Stable |
| CounterFree cash flow runs at 64% of net income—below what 33% net margins would typically imply—and the notes flag this as a quality warning; if capital requirements are rising, the gap between reported margins and cash generation could widen and undermine the quality picture. | ||
Three of the last four reported quarters produced earnings beats, including the most recent quarter at +5.7% upside surprise; the average EPS surprise across the period is +4.0%, suggesting management consistently delivers results at or above sell-side expectations. Earnings | EPS beats continue for at least 3 of the next 4 reported quarters, sustaining the pattern of consistent execution against analyst estimates. | →Stable |
| CounterThe one miss in the four-quarter series came in at -8.1%—not a trivial deviation—and the business carries geographic and customer concentration risks that could produce lumpy results if the U.S. segment or primary insurance-seller relationships experience pressure. | ||
A confirmed death cross, RSI at 26 indicating capitulation territory, all moving averages in decline, and a 200-day moving average slope of -5.3% per month together constitute a falling-knife setup that blocks a clean technical entry—momentum has failed the 4.5 threshold at just 2.2, and the setup classification is consistent with that signal. Warnings | Momentum score recovers above 4.5, RSI rises above 40, and the 200-day moving average slope turns positive within 6 months, signaling that the downtrend has exhausted itself and a recovery is underway. | →Stable |
| CounterAn RSI of 26 in a high-quality business with strong earnings often marks a capitulation low rather than the start of a sustained bear phase; with 19% upside to the analyst target and a reward-to-risk ratio of 4.63, the risk/reward geometry is attractive for a patient investor if the bottom is near. | ||
The business posts 33% net margins, a Piotroski F-Score of 8 out of 9—the highest quality tier—and ranks best-in-class for margins within its peer group, reflecting a durable operational franchise that sustains profitability through market cycles.
→Stable- Expectation
- Net margins remain at or above 30% over the next 12 months, confirming that the franchise quality is structural rather than cyclical.
CounterFree cash flow runs at 64% of net income—below what 33% net margins would typically imply—and the notes flag this as a quality warning; if capital requirements are rising, the gap between reported margins and cash generation could widen and undermine the quality picture.
Three of the last four reported quarters produced earnings beats, including the most recent quarter at +5.7% upside surprise; the average EPS surprise across the period is +4.0%, suggesting management consistently delivers results at or above sell-side expectations.
→Stable- Expectation
- EPS beats continue for at least 3 of the next 4 reported quarters, sustaining the pattern of consistent execution against analyst estimates.
CounterThe one miss in the four-quarter series came in at -8.1%—not a trivial deviation—and the business carries geographic and customer concentration risks that could produce lumpy results if the U.S. segment or primary insurance-seller relationships experience pressure.
A confirmed death cross, RSI at 26 indicating capitulation territory, all moving averages in decline, and a 200-day moving average slope of -5.3% per month together constitute a falling-knife setup that blocks a clean technical entry—momentum has failed the 4.5 threshold at just 2.2, and the setup classification is consistent with that signal.
→Stable- Expectation
- Momentum score recovers above 4.5, RSI rises above 40, and the 200-day moving average slope turns positive within 6 months, signaling that the downtrend has exhausted itself and a recovery is underway.
CounterAn RSI of 26 in a high-quality business with strong earnings often marks a capitulation low rather than the start of a sustained bear phase; with 19% upside to the analyst target and a reward-to-risk ratio of 4.63, the risk/reward geometry is attractive for a patient investor if the bottom is near.
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The U.S. segment represents 83% of total revenue and insurance company sellers account for 81% of volume, creating two overlapping high-severity concentration risks that leave the business meaningfully exposed to U.S. economic conditions and the health of a single customer category.
→Stable- Expectation
- International revenue grows to represent more than 20% of total revenue within 24 months, reducing the U.S. segment concentration below 80%.
CounterDeep penetration in a single large market can be a competitive strength rather than just a risk; a dominant position with the largest U.S. insurance sellers creates switching-cost dynamics and volume advantages that a more geographically diversified competitor cannot easily replicate.
→ Full pillar scorecard with all 4 pillars + per-dimension breakdown
When this thesis breaks
Falsifiable conditions per pillar — any one trip warrants review independent of price action. Engine-derived; not personalized advice.
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The business posts 33% net margins, a Piotroski F-Score of 8 out of 9—the highest quality tier—and ranks best-in-class for margins within its peer group, reflecting a durable operational franchise that sustains profitability through market cycles.
Trip ifNet margin compresses below 25% for 2 consecutive reported quarters from the current 33% level.
- P2Three of the last four reported quarters produced earnings beats, including the most recent quarter at +5.7% upside surprise; the average EPS surprise across the period is +4.0%, suggesting management consistently delivers results at or above sell-side expectations.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3A confirmed death cross, RSI at 26 indicating capitulation territory, all moving averages in decline, and a 200-day moving average slope of -5.3% per month together constitute a falling-knife setup that blocks a clean technical entry—momentum has failed the 4.5 threshold at just 2.2, and the setup classification is consistent with that signal.
Trip ifMomentum score rises above 4.5 and the 200-day moving average slope turns positive (above 0%/30d) for 2 consecutive months.
- P4The U.S. segment represents 83% of total revenue and insurance company sellers account for 81% of volume, creating two overlapping high-severity concentration risks that leave the business meaningfully exposed to U.S. economic conditions and the health of a single customer category.
Trip ifU.S. segment revenue concentration falls below 75% of total revenue for 2 consecutive annual reporting periods.
How the engine reached this verdict
TrendMatrix's engine output for Copart, Inc. (CPRT) is SELL_IF_HOLDING with medium conviction, score 5.3/10 at $30.25. The F-path SELL output reflects an overall score of 4.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. Asymmetry R:R of 3.39 is supplementary context, not the trigger.
The dominant failed gate is momentum at 4.3 vs threshold 4.5 (with co-failures: death cross). SELL flips back toward HOLD if momentum recovers above its threshold AND a co-failing gate also clears. The strongest-cleared gate today is ASYMMETRY:3.4>=1.5.
On the bull side: Strong earnings beat streak (3/4); High-quality business. On the bear side: Concentration risk — Geographic: U.S. segment (83.0%); Concentration risk — Customer: insurance company sellers (81.0%); Leverage penalty (D/E 1.1): -0.5. Active engine warnings: V9 Gate Failed: MOMENTUM:4.3<4.5, V9 Gate Failed: DEATH_CROSS:HARD_BLOCK.
The engine's exit framework anchors to a tactical sell band near $30.25, with structural invalidation at $28.62. The asymmetric R:R against a reversal hypothesis is 3.39 — the upside scenario exists, but it requires multiple structural gates to flip; the downside scenario requires only one more disappointment. The engine's sizing output: 0.5% of portfolio at this asymmetry level (none-conviction tier).
For the full 10-dimension breakdown + V9 gate detail: Why TrendMatrix rates CPRT — 10-dimension breakdown →
Bull case
- ▸Strong earnings beat streak (3/4)
- ▸High-quality business
Bear case
- ▸Concentration risk — Geographic: U.S. segment (83.0%)
- ▸Concentration risk — Customer: insurance company sellers (81.0%)
- ▸Leverage penalty (D/E 1.1): -0.5