Copart Shares Test Critical Support Amid Institutional Selling

Copart US2172041061

Shares of Copart, the online vehicle auction platform, are trading perilously close to a yearly low, signaling a pronounced correction phase. The stock, currently priced at $38.72, is hovering just above its 52-week low of $38.61. Since the start of the year, the equity has declined by 31 percent, with sentiment weighed down by substantial selling from both institutional investors and company insiders.

Recent regulatory filings reveal a significant pullback by a major institutional holder. CW Advisors LLC slashed its Copart position dramatically during the second quarter of 2025, selling 217,951 shares. This move reduced its holdings by 64.3 percent. This institutional retreat coincides with considerable insider selling activity. Over the past 90 days, company executives, including CEO Jeffrey Liaw, have disposed of a combined 353,123 shares worth approximately $15.87 million. Market observers frequently interpret such a synchronized capital outflow from both key groups as a signal of caution regarding near-term price performance.

Strong Fundamentals Clash with Weak Price Action

Despite the persistent downtrend, key valuation metrics suggest the stock may be undervalued. Current discounted cash flow (DCF) analysis points to an intrinsic value of $49.05 per share. This implies the stock is currently trading at a discount of roughly 20.8 percent. Furthermore, the current price-to-earnings (P/E) ratio of 23.6 sits below a calculated fair value P/E of 28.6. For now, the market is ignoring these theoretical valuation gaps and following the negative momentum.

This divergence between operational success and stock performance is highlighted by the latest financial figures:
* Revenue (last 12 months): $4.66 billion (a year-over-year increase of 9.68%)
* Net Income (last 12 months): $1.59 billion (a year-over-year increase of 13.90%)
* Market Capitalization: $37.48 billion

Analyst Targets Suggest Potential Upside

The consensus view among Wall Street analysts remains cautious yet fundamentally constructive, with an average rating of "Hold." The average 12-month price target stands at $47.60, suggesting an upside potential of 22.9 percent from current levels. However, expectations vary widely, with targets ranging from a pessimistic $33.00 to a bullish $62.00.

Copart's most recent quarterly results presented a mixed picture. The company reported revenue of $1.16 billion, which slightly missed estimates of $1.18 billion. Conversely, earnings per share (EPS) of $0.41 surpassed the expected $0.39. Investors are now tasked with weighing the company's solid revenue and profit growth against the sustained downward trend in its share price and the lack of institutional support. The stock is currently testing critical technical support levels near the $38 mark.