Copart's Sentiment Discount Has Outrun Its Business Reality

The setup

Copart is the dominant online marketplace for salvage and total-loss vehicles—the platform where insurance companies liquidate the cars they write off after accidents, floods, and storms, selling them to a global base of dismantlers, rebuilders, exporters, and dealers. Roughly four-fifths of its volume comes from insurance carriers, and the company collects fees at nearly every step: listing, selling, transportation, storage, and title processing. It is a high-return, asset-heavy toll booth on the flow of wrecked cars, and for most of the past decade the market has priced it accordingly, at 30-to-40 times earnings.

That premium has collapsed. The stock closed near $30 on July 2, 2026, down from an all-time high closing price of $63.84 in May 2025. Shares are off roughly 39% over the past year, and the 52-week range now runs from a low of $27.85 to a high of $50.11. The central question for investors is whether this is a business in structural decline or a wide-moat compounder caught in a sentiment air pocket. My read is the latter—and the gap between the two interpretations is where the opportunity lives.

What the numbers actually said

The bear narrative rests on shrinking volume, and the volume decline is real. In its fiscal third quarter (ended April 30, 2026), global insurance unit sales fell 2.7%—or 1.9% excluding catastrophic volume from the prior year—while U.S. insurance units dropped 4.2%, or just over 3%...