CPRT— AI Stock Forecast & Price Targets
Published 7/17/2026 · A free sample of K3vl4r’s AI-powered analysis.
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Copart is a pristine, debt-free compounder (33.5% net margins, 17.6% ROE, $3.35B cash) whose stock has been cut nearly in half to fresh 52-week lows at $27.23 on decelerating growth (~1% Y/Y TTM) and multiple compression to ~16x forward. The tape is broken (-23% below SMA200, -29% half-year) but the FQ3 print showed sequential margin improvement (32.5% net, $503M FCF) and RSI at 42 has lifted off oversold — this is a patient accumulation setup, not a chase, with prior base targets running systematically optimistic.
1-4 weeks: start a first tranche here at $28.29, add on a hold of $27.23 (52w low) or a reclaim/close above $29.00 (SMA50 proxy). Sizing: 1/3 of intended position. Invalidation is a decisive weekly close below $26.50 — that opens the gap to $25 and I'd stop out the starter. Do not chase into $30-$31 resistance without a catalyst; the 1d forecast band pointing to $31 has been unreliable and should be discounted.
1-6 months: the fulcrum event is the next earnings print (May 21 per the snapshot appears stale; next scheduled report is the FQ4/FY print). Two things must be true to unlock re-rating: (1) revenue growth reaccelerates above 2-3% Y/Y, (2) operating margin holds ≥36% (FQ3 was 37.5%, encouraging). If both print, a move back to the SMA200 zone (~$36-$37) is reasonable. Add a second tranche on any confirmed capital-return announcement (buyback initiation from the new CEO would be the single highest-impact catalyst given $3.35B idle cash). What changes my mind: another quarter of sub-1% growth with margins slipping below 32% — that would confirm a structural rather than cyclical deceleration and I'd trim.
1-3 years: the terminal thesis is that Copart-plus-IAA remains a genuine duopoly with secular tailwinds from rising vehicle complexity (ADAS, EV batteries) increasing total-loss frequency per accident, and that the new CEO deploys the balance sheet into either accretive M&A or shareholder returns. At $1.60 TTM EPS growing to ~$1.85-$2.10 by FY28 and a fair 20-22x multiple for this quality of business, a $37-$45 range is defensible on a multi-year view. Biggest structural risk: if ADAS actually reduces accident frequency faster than it raises total-loss severity, and used vehicle price deflation persists, the unit economics compress and the terminal multiple should sit closer to 14-16x rather than 20x+.
The business quality is elite: TTM revenue of $4.64B, 33.5% net margins, 37.5% operating margins, 17.6% ROE and 17.55% ROIC — figures very few industrials achieve. The balance sheet is a fortress: $3.35B cash against just $93M debt, debt/equity 0.01, current ratio 7.6x, $8.77B stockholders' equity. FQ3 (Apr 2026) actually stepped up meaningfully — revenue $1.24B (highest of the last four quarters), operating income $464M (37.5% margin, best of the trailing four), and free cash flow of $503M vs a weak $58M in FQ2, restoring the ~$1B TTM FCF run-rate. What is broken is the growth line: sales Y/Y TTM just 1.05%, EPS Q/Q 2.67%, well off the 9.9%/16.1% 3/5-year sales CAGRs. Capital allocation remains the sore spot — no dividend, no visible buyback, and $3.35B piling up is diluting ROE (cash fell $1.75B QoQ, worth watching for whether it went to M&A prep or working capital). Net: the fundamentals justify a premium multiple; the deceleration is what is capping it.
All four timeframes tell the same story: this is a broken uptrend. The weekly chart shows a full round-trip from $63 highs to a $27.23 fresh 52-week low, with price now -43.5% off the 52w high and -23% below the 200d SMA. The daily and 4h show a persistent lower-highs/lower-lows structure from early July through the mid-July low, with a modest bounce off $27.23 to $28.29 (+3.7%) — first tentative sign of a base attempt but nowhere near a trend change. Price sits -2.2% below SMA20 and -8.7% below SMA50; reclaiming the $28.5-$29 cluster is the first real hurdle, and $30-$31 (June range low, forecast band) is heavier resistance. RSI at 42.5 has lifted off deep oversold but is not confirming momentum yet. On the forecast band: the 1d model has been actively worse than a naive baseline (23% vs 79% directional accuracy, MAPE 23%) so its $31 upside call carries no weight; only the weekly signal has genuine skill and is also bullish, which is the one I lean on. Divergence to note: FCF is holding >$1B while the stock makes new lows — classic valuation-floor setup if growth stabilizes.
The signal is the leadership transition: incoming CEO Jay Adair (returning to the seat) explicitly told investors the change is not temporary and flagged growth acceleration, M&A, and AI focus — combined with the $3.35B cash pile, this is the most concrete latent catalyst on the name. The July 8 8-K naming a new UK president reinforces that operational overhaul is in motion. The tape-driven headlines ("3 reasons CPRT has explosive upside", "stocks down but not out") are noise that reflects the drawdown, not new information. One negative datapoint worth flagging: a director sold $2.2M on July 13 near the low — small in the context of a $26B cap but not the insider signal bulls would want at a 52-week low. Broader market backdrop is risk-off with deteriorating breadth, which argues against sizing aggressively into any single deep-drawdown industrial name.
- New CEO Jay Adair explicitly guiding to growth acceleration, M&A, and AI focus — first major strategic pivot in years
- $3.35B cash + $93M debt = ~$3.25B net cash war chest deployable into acquisitions or buybacks
- New UK President appointment (July 8 8-K) signals operational push in international salvage markets
- Purple Wave (construction/ag/fleet auctions) and Copart 360 imaging tech extend the platform beyond core salvage
- Rising ADAS/EV vehicle complexity structurally raises total-loss frequency per accident — long-cycle tailwind
- FQ3 sequential margin recovery to 37.5% operating (from 34.7% in FQ2) suggests margin compression may have troughed
- Sales Y/Y TTM at just 1.05% vs 9.9%/16.1% 3/5-yr CAGR — unresolved whether cyclical or structural
- PEG 3.25 and forward P/E 16.85 — not statistically cheap for a business growing at 1%
- Broken technical structure: -23% below SMA200, -29% half-year, fresh 52w low at $27.23 with no confirmed reversal
- $3.35B idle cash diluting ROE (17.6% today would be materially higher on leaner balance sheet); no dividend or buyback
- Director insider sale of $2.2M on July 13 near the low — not the conviction signal one wants at support
- Used vehicle price deflation compresses revenue per unit; insurance total-loss rates could plateau if used car values stabilize higher
- Macro backdrop: SPY late markup/distribution, risk-off composite, breadth deteriorating — poor tape for adding to deep-drawdown industrials
- Prior 12mo base targets on this name have run +36% optimistic vs realized price — model risk on the upside case
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