Alright guys i have been digging deep into coparts recent sec filings including their 10K and the latest 10Q for the nine months ended April 30 2026 and honestly the market is mispricing this business hard right now. The stock dropped down to around $27.94 recently which puts the market cap at about $25.5 billion. If you look at their actual balance sheet they hold roughly $3.4 billion in net cash and virtually no meaningful debt, meaning their actual Enterprise Value is sitting around $22.1 billion.
Looking at their numbers from the latest 10Q release, for the nine months ended April 30 2026 they pulled in $3.5 billion in revenue and over $1.15 billion in net income. On a full year basis their LTM revenue is sitting near $4.65 billion with EBITDA coming in right around $1.91 billion. That means Copart is currently trading at an EV to EBITDA multiple of under 14x, which is way below their 5 year historical median EV/EBITDA of around 24x to 25x. Their trailing P/E ratio is sitting at roughly 17.4x based on an EPS of $1.60, compared to the 30x+ P/E multiples it usually commands because of its massive moat in salvage auctions.
If we actually do the math for a standard dcf model using real numbers, Copart generates about $1.34 billion to $1.40 billion in free cash flow. Assuming a conservative 10% cash flow growth over the next 10 years given their global expansion into Europe and international volume growth of 14%, and discounting that back using an 8.5% WACC with a 3% terminal growth rate, the intrinsic valuation of the equity comes out to at least $56 to $60 per share. Comparing that fair value against the current market price of $27.94, this stock will perform at least 100% profit if invested now.
Now could it theoretically drop a bit more in the short term due to broader market noise or cyclical insurance retrenchment? Sure, it theoretically could drop, but it would be temporary before the fundamentals force a repricing back to intrinsic value. A business with 40%+ EBITDA margins, $3.4B in net cash, and zero debt driving a monopoly-like network effect does not stay at a 17x P/E forever.