We came across a bullish thesis on Copart, Inc. (NASDAQ:CPRT) on Substack by FluentInQuality. In this article, we will summarize the bulls’ thesis on CPRT. Copart, Inc. (NASDAQ:CPRT)’s share was trading at $58.46 as of Dec 27th. CPRT’s trailing and forward P/E were 40.88 and 35.46 respectively according to Yahoo Finance.
A line of used vehicles in a spacious lot, ready to be sold at an auction.
Copart, Inc. (NASDAQ:CPRT), founded in 1982 and headquartered in Dallas, Texas, has established itself as a global leader in online vehicle auctions and remarketing services. Through its innovative digital auction platform, Copart connects buyers and sellers, specializing in the resale of vehicles for insurance companies, dealerships, rental car businesses, and individuals. With over 200 locations across 11 countries, the company offers a wide range of vehicles and additional services like transportation, storage, and title processing. Known for its technology-driven approach, Copart continues to revolutionize the vehicle auction industry, making it resilient across economic cycles.
The company is well-positioned to capitalize on the rapid growth of the Online Salvage Auctions market, projected to expand from $15 billion in 2023 to $67.9 billion by 2030, with a compound annual growth rate (CAGR) of 25%. Copart stands to benefit significantly from this growth due to its monopolistic market position. The company’s founder, Willis J. Johnson, retains around 5% of shares, demonstrating strong alignment with shareholders, while A. Jason Adair holds about 3%, further reflecting high levels of ownership and commitment to the business.
What makes Copart particularly attractive is its simple yet resilient business model, which continues to perform well in every economic cycle. The company boasts high, sustainable margins and generates strong, reliable cash flows compared to industry peers. Additionally, Copart has maintained a stable share count, with minimal dilution, enhancing shareholder value. The company is expected to achieve low double-digit growth in the coming years, positioning it for strong outperformance, potentially surpassing the S&P 500 by 2025. With its high free cash flow margins and excellent reinvestment rates, Copart remains an attractive investment opportunity.
Copart, Inc. (NASDAQ:CPRT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held CPRT at the end of the third quarter which was 50 in the previous quarter. While we acknowledge the risk and potential of CPRT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CPRT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
