Why Copart Stock Dropped Today
Key Points
Copart missed on sales and earnings last night.
Earnings shrank 10%, but are still flat against H1 2025 through the first half of this year.
- 10 stocks we like better than Copart ›
Junked-car salvager Copart (NASDAQ: CPRT) stock fell 4.5% through 11:30 a.m. ET Friday after missing earnings last night.
Heading into its fiscal Q2 2026 report, analysts forecast Copart to earn $0.39 per share on $1.15 billion in sales. In fact, Copart earned just $0.36 per share on sales of $1.12 billion.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Copart Q2 earnings
Copart revenues slipped 4% year over year in Q2, resulting in a 10% decline in per-share profit, worsening a decline that began in Q1. Year to date, Copart's sales are down 1%, and earnings are flat against fiscal 2025 at $0.77 per share.
That's the bad news.
The good news is that Copart's free cash flow is up significantly this year. Although operating cash flow was basically unchanged year over year at $662.8 million, Copart cut its purchases of property and equipment nearly in half, to just $177.7 million. As a result, free cash flow so far this year is a strong $485.1 million -- and trending toward perhaps $970 million through the end of the fiscal year!
Is Copart stock a buy?
Copart management didn't give much in the way of guidance, but assuming Copart can hit that mark, the stock would be trading for a price-to-free cash flow ratio of 37.4. Back out $5.1 billion in net cash on the balance sheet, and the EV/FCF ratio on this one falls to just 32.1.
I can't call the stock a "buy" at this valuation -- not with profits flat and revenues falling. But there's no doubt Copart stock is getting cheaper, and it's already a lot cheaper than it was a year ago.
Should you buy stock in Copart right now?
Before you buy stock in Copart, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Copart wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $415,256!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,151,865!*
Now, it’s worth noting Stock Advisor’s total average return is 892% — a market-crushing outperformance compared to 194% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of February 20, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Copart. The Motley Fool has a disclosure policy.
Recommended Articles
