Copart (CPRT) Slipped Due to Investors' Concerns

Wedgewood Partners, an investment management company, released its third-quarter 2025 investor letter. The letter is available for download here.  AI stocks remain the favorite topic of Wall Street in the third quarter. In the third quarter, Wedgewood Composite’s net return was 5.9% compared to the Standard & Poor’s 8.1%, the Russell 1000 Growth Index’s 10.5%, and the Russell 1000 Value Index’s 5.3% return for the same period. In addition, you can check the fund’s best 5 holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Wedgewood Partners highlighted stocks such as Copart, Inc. (NASDAQ:CPRT). Copart, Inc. (NASDAQ:CPRT) is an online auction and vehicle remarketing services company. The one-month return of Copart, Inc. (NASDAQ:CPRT) was -0.53%, and its shares lost 13.10% of their value over the last 52 weeks. On October 22, 2025, Copart, Inc. (NASDAQ:CPRT) stock closed at $44.93 per share, with a market capitalization of $43.2 billion.

Wedgewood Partners stated the following regarding Copart, Inc. (NASDAQ:CPRT) in its third quarter 2025 investor letter:

"Copart, Inc. (NASDAQ:CPRT) detracted from performance despite +12% growth in gross profit dollars and a +24% increase in earnings per share. The stock underperformed, as investors have been concerned of late about the decline in unit volume from Copart's U.S. insurance customers. Copart’s price per unit sold was up +6%, despite used car price indexes, which have been mostly flat for the past year. The volume share loss is related to its one largest duopoly competitor, which has aggressively reached for market share at one of the largest U.S. insurers (Progressive Corp.). We expect such share loss to normalize as Copart continues to invest in industry-leading auction liquidity. Copart also has nearly $5 billion in net cash on its balance sheet, relative to just over $40 billion in market cap and a multiple that has become increasingly more attractive relatively and historically to the stock market. The Company can significantly improve returns if it deploys this excess capital into share buybacks."

Copart, Inc. (NASDAQ:CPRT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held Copart, Inc. (NASDAQ:CPRT) at the end of the second quarter, which was 57 in the previous quarter. While we acknowledge the potential of Copart, Inc. (NASDAQ:CPRT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Copart, Inc. (NASDAQ:CPRT) and shared the list of most oversold large cap stocks so far in 2025. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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