Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.9 |
| P/S | 6.2 |
| EV/EBITDA | 4.7 |
| Fwd P/E | 7.1 |
| PEG | 3.4 |
| Analyst target | 7.5 |
- ▸Forward P/E: 17.8x
- ▸PEG: 3.46
CPRT · Why this verdict
Why Copart (CPRT) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| 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 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. Bear case | International revenue grows to represent more than 20% of total revenue within 24 months, reducing the U.S. segment concentration below 80%. | →Stable |
| 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. | ||
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.
→StableQuality breakdown
- 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.
→StableEarnings
- 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.
→StableWarnings
- 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.
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.
→StableBear case
- 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.
TrendMatrix Research · core thesis
Engine thesis — one sentence
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.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.9 |
| ROA | 7.6 |
| Gross margin | 5.5 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.4 |
| FCF quality | 5.0 |
| Moat | 5.0 |
| Piotroski F | 8.9 |
- ▸Strong margins: 33%
- ▸Earnings quality warning: 64% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
2.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.0 |
| EPS growth | 2.5 |
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.1 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 0.4 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -6.4%/30d — confirmed downtrend
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 9.2 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (10.0) — signal dampened
- ▸Analyst upside: 41%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $869,724 (0.003% of mkt cap)
Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.3 |
| quality rank | 8.2 |
| growth rank | 2.4 |
- ▸Best-in-class margins
Technical
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.5 |
| support resistance | 6.6 |
| 52w position | 1.3 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 7.3 |
| volatility | 3.1 |
| put call | 8.3 |
| implied vol | 3.2 |
| beta | 6.9 |
| debt equity | 4.9 |
- ▸High IV: 61%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.5 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- ASYMMETRY:3.1>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:60d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.4<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
3.09
Upside
+23.1%
Downside
7.5%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 42
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -43% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 4.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.4<4.5, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 3.09 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.2, Quality at 7.0, and Value at 6.0; the weakest are Growth at 2.8, Momentum at 4.4, and Insider at 5.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 3.09 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Best In Class Margins Quality
Trip ifNet margin compresses below 25% for 2 consecutive reported quarters from the current 33% level.
- P2Consistent Earnings Beat Record
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Death Cross Blocks Clean Entry
Trip ifMomentum score rises above 4.5 and the 200-day moving average slope turns positive (above 0%/30d) for 2 consecutive months.
- P4Geographic Customer Concentration
Trip ifU.S. segment revenue concentration falls below 75% of total revenue for 2 consecutive annual reporting periods.