I Wouldn’t Wait on This One

Hey there, bargain hunter. Thursday after the close on September 10, 2026, Copart drops its fiscal Q4 2026 results, capping a year that looked nothing like the double-digit growth story investors paid a peak multiple for in late 2024. The numbers are already sobering before the report hits.

Scoreboard

Consensus going into Thursday sits at about $0.38 EPS on roughly $1.14 billion in revenue, based on MarketBeat’s compiled estimates. That compares to $0.43 EPS last quarter and $0.41 in the year-ago Q3. Revenue growth is expected at about 1.5% year over year, a dramatic step down from the 14% Copart posted in the same quarter of fiscal 2025. The stock has been under pressure over the past year and trades well below the levels that supported its prior premium multiple.

What Actually Happened

Q3 told the cleaner version of this story. Consolidated revenue came in at $1.24 billion, up 2.1% year over year. Beneath that headline: US insurance unit volumes fell 4.2%. International units grew 5.9% and international revenue climbed 14.1%. The two businesses are moving in opposite directions.

The driver on the US side is not competitive share loss. It is insurance retrenchment. Consumers pulling back on coverage in response to premium spikes have reduced earned car years, which means fewer insured miles, fewer claims, and fewer totaled vehicles flowing to Copart’s yards. Management called it cyclical, pointing to historical patterns where coverage normalizes as rates stabilize. US auction average selling prices hit a seasonally adjusted record in Q3, which absorbed much of the volume hit. But record prices are harder to sustain when new-vehicle sales fell roughly 5.8% year over year in August and used-vehicle values face their own affordability ceiling.

The Business Model

Copart is the world’s largest online salvage vehicle auctioneer. Insurance companies send totaled cars to its yards; Copart runs them through a proprietary digital auction platform connecting approximately 1 million registered members across 185+ countries. It earns fees on both sides. The model is capital intensive in land and logistics but produces extraordinary margins: gross margin was 46.3% in Q3, with operating cash flow of approximately $1.25 billion over the first nine months of fiscal 2026 against about $259 million in capex. The business does not need leverage to grow, and the balance sheet holds about $3.35 billion in cash and restricted cash (about $4.20 billion including held-to-maturity securities), with essentially no debt.

Data Section

• Q3 revenue: $1.24B, up 2.1% YoY
• Q3 EPS: $0.43
• Q4 consensus: $1.14B revenue, $0.38 EPS
• Full-year fiscal 2026 EPS consensus: $1.58, roughly flat with fiscal 2025’s $1.59
• US insurance units Q3: down 4.2% YoY
• International revenue Q3: up 14.1% YoY
• Gross margin Q3: 46.3%, up 71 basis points YoY
• Buybacks fiscal 2026 first nine months: approximately $1.63 billion
• Cash and liquidity: about $3.35B cash and restricted cash (about $4.20B including held-to-maturity securities)
• ROIC: approximately 30%

Is It Cheap?

Here is where it gets interesting. CPRT’s trailing P/E sits around 17-21x depending on the calculation date, against a 10-year historical average north of 30x. The stock is 40% to 46% below its own long-run multiple. Analysts have trimmed price targets to the $40-$45 range with a JPMorgan upgrade to Overweight at a $40 target. GuruFocus pegs intrinsic value at $57. None of those estimates help if US volume keeps declining and the international segment, still a minority of total revenue, cannot close the gap fast enough.

For a bargain hunter, the honest read is this: the premium is mostly gone, but it has not been replaced by obvious value. You are paying a fair price for a structurally sound business in a cyclical air pocket.

Bull / Base / Bear

Bull: Insurance coverage normalizes in 2027, total-loss frequency resumes its structural climb toward 30%, international growth compounds at 10%+, and the buyback shrinks the share count meaningfully. Re-rating to 25x earnings implies significant upside from current levels.

Base: US volumes recover slowly through fiscal 2027, international carries the growth load, margins hold near 46%, and EPS grows 5% annually. Stock drifts toward analyst consensus targets in the low-to-mid $40s.

Bear: Used-vehicle prices fall further, total-loss decisions reverse, and insurance carriers continue redirecting volume to rival RB Global (IAA). Revenue misses a sixth consecutive Street estimate, and the forward multiple compresses below 18x.

Action Plan

Do not buy in front of Thursday’s call. Wait for management’s tone on US volume trends. If they confirm stabilization, a small starter position at current prices is defensible. Scale in over two to three tranches, with a larger add only if US insurance units show recovery by Q1 fiscal 2027. Trim or avoid entirely if management walks back the cyclical framing and acknowledges any structural share loss to competitors.

Cheap Investor Checklist

• Q4 US insurance unit volume: stabilizing or still falling?
• International revenue growth: does 14% hold, or does it slow?
• Gross margin: can it stay above 45% with rising logistics costs?
• Management language on insurance coverage cycle: more confident or more hedged?
• Buyback pace in Q4: did they keep buying near $30-$34?
• Q1 fiscal 2027 guidance or commentary on volume trends
• Total-loss frequency data: any improvement from Q1’s 23.6%?
• Forward P/E vs. RB Global and KMX as comparables

Bottom Line

If the US insurance cycle is genuinely turning, CPRT at a low-20s forward multiple with a fortress balance sheet and accelerating international revenue is one of the better risk-adjusted opportunities in the space right now. If the softness is structural, you are buying a declining core business propped up by a smaller, faster-growing segment. Thursday’s call will not fully resolve that question, but the tone from management will tell you which side of the bet they are really on.