Copart's valuation improves despite no fundamental change in the company's long term outlook. I have, therefore, acquired an additional 200 shares @ ~$48.12 in a 'Core' account in the FFJ Portfolio on June 18.
This is a brief post because I covered CPRT as recently as May 28, 2025 where I disclose the purchase of additional Copart (CPRT) shares by a young investor.
In that prior post I touch upon the increase in the diluted weighted average outstanding common shares. If we account for two 2:1 stock splits (November 2022 and August 2023), CPRT's share count in FY2019 was ~961.8 million. In Q3 2025, this had risen to ~978 million.
In my previous post I reflect the following regarding CPRT's share repurchase activity:
On September 22, 2011, CPRT's Board authorized a 320 million share increase in the stock repurchase program, bringing the total current authorization to 784 million shares.
The following are previous share repurchases:
- 2013: $572 thousand
- 2014: $15,009 million
- 2015: $233,484 million
- 2016: $442,855 million
- 2018: $364,997 million
There were no repurchases in FY2017, FY2018, FY2020 - FY2024, and YTD2025.
As of April 30, 2025, CPRT has 326 million shares available for repurchase under its share repurchase program. With shares being attractively valued for the first time in a few years, I envision share repurchases being made using some of CPRT's liquidity.
At the end of Q3 2025, CPRT had ~$4.385B of cash, cash equivalents, restricted cash (a nominal amount), and investment in held to maturity securities. If management were to decide to allocate capital toward share repurchases, it could repurchase 16.2 million shares to reduce the number of outstanding shares to the FY2019 level. Using an average $52 repurchase price, this would require a cash outlay of ~$0.842B leaving CPRT with ample liquidity.
I do not anticipate CPRT will repurchase ~$0.842B worth of shares. My thought is that if this period of share price weakness persists until CPRT's FYE (July 31), I expect the FY2025 Consolidated Statement of Cash Flows will reflect ~$0.4B - ~$0.5B of share repurchases.
Valuation
In my prior post, I reflect the following:
My February 21, 2025 post reflects previous valuation estimates.
In the first 3 quarters of FY2025, CPRT generated $1.18 EPS versus $1.07 in the same period in FY2024.
Using the current broker estimates and my May 28 ~$52.13 purchase price, the forward-adjusted diluted PE levels are:
- FY2025 - 11 brokers - ~33.4 based on the mean of $1.56 and low/high of $1.52 - $1.64.
- FY2026 - 11 brokers - ~29.9 based on the mean of $1.75 and low/high of $1.65 - $1.91.
- FY2027 - 6 brokers - ~26.3 based on the mean of $1.98 and low/high of $1.80 - $2.23.
As noted earlier, I estimate CPRT will generate ~$1.20 and ~$1.16 of FCF in FY2025 calculated under the conventional and modified methods. Using my recent ~$52.13 purchase price, CPRT's P/FCF is ~43.4 and ~45.
CPRT's valuation appears rich until we consider its dominant industry position, fortress balance sheet, and growth opportunities. Many investors, however, may have no interest in CPRT because:
- the industry is unappealing;
- it issues no dividend; and/or
- it is not a technology company.
While CPRT is not a technology company, it has revolutionized the salvage industry by employing technology.
Using the estimates reflected above and my recent ~$48.12 purchase price, CPRT's valuation is somewhat more attractive than at the end of May.
Final Thoughts
When I completed my 2024 Year End Review, I held 3540 shares and it was my 12th largest holding; the share price at the time was ~$57.50. I now hold 4,140 shares but with the drop in CPRT's share price, it will be interesting to see how CPRT ranks when I perform my mid-2025 review.
I continue to view ~$60 as being a fair value. Based on a $48.12 purchase price, we arrive at a ~24.7% return if CPRT's share price retraces to ~$60 within a year. This share price is not an unrealistic expectation considering environmental changes are increasing the frequency and intensity of natural disasters. CPRT benefits from active hurricane seasons and the 2025 hurricane season is expected to be very active!
I wish you much success on your journey to financial freedom!
Note: Please send any feedback, corrections, or questions to [email protected].
Disclosure: I am long CPRT.
Disclaimer: I do not know your circumstances and do not provide individualized advice or recommendations. I encourage you to make investment decisions by conducting your research and due diligence. Consult your financial advisor about your specific situation.
I wrote this article myself and it expresses my own opinions. I do not receive compensation for it and have no business relationship with any company mentioned in this article.
