Current ratio hit 10.06 while ROA fell to 3.3% — maximum safety achieved minimum returns below treasury yields.
Market expects 4.71% perpetual growth from a business destroying value with 3.09% ROIC vs 9.24% WACC.
What does this company do and how does it make money?
Copart runs online vehicle auctions, primarily earning fees from insurance companies disposing of salvage vehicles. The 85.4% service revenue concentration creates predictable, high-margin cash flows, while minimal international exposure limits growth but reduces complexity.
Five legendary investment frameworks analyzed this company.
Five legends examined Copart's $5.1 billion cash hoard earning 3.3% versus 4.33% treasuries — Graham called it 'tragic irony,' while Mauboussin calculated that growth itself destroys value when ROIC sits at 3.09% versus 9.24% WACC. Tap any framework below to explore their complete analysis.
How much cash does it generate and where does it go?
Despite strong cash generation, the company struggles to deploy capital productively, accumulating $5.1 billion while ROA sits at 3.3%. The resumption of buybacks at 171% of operating cash flow signals management recognizes the cash accumulation problem but lacks better investment alternatives.
Is the business getting stronger or weaker?
The business maintains pricing power with stable 34%+ operating margins, but growth has stalled at 2.4% while returns on capital have collapsed. ROIC below WACC for five consecutive years means each dollar retained destroys shareholder value.
What could go wrong and has it survived trouble before?
High operating leverage amplifies any revenue weakness, as shown when a 2.9% revenue decline triggered an 8.8% operating income drop in Q1'26. The consistent insider selling pattern over 16 quarters suggests those closest to the business see limited upside at current valuations.
Current ratio of 10.06 represents maximum financial strength paired with minimum capital efficiency — CPRT holds $5.1 billion earning 3.3% while treasuries yield 4.33%.
Is the stock priced for perfection, fair value, or pessimism?
The market prices CPRT for 4.71% perpetual growth despite 2.4% actual growth, creating a 31.6% premium to DCF fair value. An earnings yield of 0.89% versus 4.33% treasuries means investors accept negative risk premiums, betting on acceleration that hasn't materialized.
Analysis applies published investment frameworks to publicly available financial data. Educational purposes only. Not financial advice.