rewrite this title and make it good for SEOCopart, Inc. (CPRT): A Bull Case Theory

We came across a bullish thesis on Copart, Inc. on Andvari’s Substack by Douglas Ott. In this article, we will summarize the bulls’ thesis on CPRT. Copart, Inc.’s share was trading at $47.60 as of September 15th. CPRT’s trailing and forward P/E were 30.44 and 27.55 respectively according to Yahoo Finance.

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Copart has experienced recent softness in unit volumes, with global unit sales declining 0.9% in 4Q FY25 and U.S. sales down 1.8%, following flat growth in the prior quarter. This weakness has contributed to a notable share price decline from nearly $64 in May to $45 over three months. A key factor behind the slowdown is the cyclical rise in uninsured and underinsured motorists, as higher insurance premiums have led more policyholders to downgrade or forgo coverage, reducing vehicles flowing through Copart’s insurance consignment channel. Additionally, Copart strategically pruned low-value units and shifted certain noninsurance vehicles to a direct buy model, temporarily lowering U.S. volumes while enhancing long-term profitability by allocating resources to higher-margin lines.

Offsetting U.S. softness is a strengthening international business, particularly in Europe, where the transition to a consignment model is accelerating. By converting purchased insurance units to fee-based consignment, Copart aligns interests with insurers, reduces inventory risk, and boosts margins, evidenced by International EBITDA margins reaching a record 40.2% in 3Q FY25. This mirrors the efficient U.S. operating model, where Copart primarily earns service fees and avoids outright vehicle purchases.

Financially, Copart remains strong, with 4Q FY25 operating margins at 36.7%, above prior-year levels, and cash balances rising $1.37 billion year-over-year, now representing 10.9% of market cap. Management maintains confidence in long-term secular trends favoring rising total loss frequency, supported by strategic investments in global networks, technology, and service offerings. While near-term unit volumes face cyclical pressures, Copart’s resilient business model, expanding international profitability, and disciplined approach to high-margin units position it for sustained long-term growth, providing robust returns and auction liquidity across its global markets.

Previously we covered a bullish thesis on Copart, Inc. (CPRT) by Bulls on Parade in May 2025, which highlighted the company as a strong compounder with a dominant salvage auction model, disciplined capital allocation, and solid global growth. The company’s stock price has depreciated approximately by 11.3% since our coverage due to near-term U.S. unit volume softness. The thesis still stands as Copart’s resilient business model supports long-term growth. Douglas Ott shares a similar bullish view but emphasizes recent unit volume trends and accelerating international consignment profitability.