Copart, Inc. (CPRT): A Bull Case Theory

We came across a bullish thesis on Copart, Inc.  on Business Invest’s Substack by Francesco Ferrari. In this article, we will summarize the bulls’ thesis on CPRT. Copart, Inc. 's share was trading at $49.64 as of July 1^st. CPRT’s trailing and forward P/E were 32.87 and 28.01 respectively according to Yahoo Finance.

Copart, Inc. (CPRT), a leading player in the online vehicle auction space, has delivered an impressive 15.6% sales CAGR over the past five years, showcasing the strength of its capital-light, highly automated business model. However, to justify a 2x increase in market value by 2030 under a simulated scenario, the company would need to achieve a steep 26.98% CAGR in revenue between 2025 and 2030—an assumption that appears highly ambitious given its historical growth trajectory.

This scenario also assumes modest net dilution of just 0.5%, a 32% terminal profit margin (already near peak levels for the business), and a rich 30x sentiment multiple. While CPRT commands a premium due to its dominant market position, scalability, and robust margins, relying on sustained investor optimism to support such a high terminal multiple introduces considerable valuation risk.

The model suggests that even if CPRT maintains strong operational efficiency, a doubling in market value within five years would require a revenue ramp far beyond its historical pace, putting into question the realism of these assumptions. Given that profit margins are already elevated and market saturation in key regions may limit expansion, the reliance on continued bullish sentiment rather than fundamentals becomes a fragile foundation.

While Copart remains a quality business with enviable metrics, the path to doubling its market cap appears to require either aggressive and sustained top-line acceleration or an unrealistic continuation of lofty market multiples—both of which present risks investors should carefully weight.

Previously we covered a bullish thesis on Copart, Inc. by Andvari in May 2025, which highlighted its strong balance sheet, disciplined capital allocation, and strategic disaster response capabilities. The company’s stock has depreciated approximately by 7.5% since our coverage as growth concerns weighed on sentiment. Francesco Ferrari shares a contrarian view but emphasizes valuation risks and unrealistic growth assumptions.

CPRT isn't on our list of the 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the risk and potential of CPRT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.