CPRT 04-2026

Copart is a compounding machine wearing the clothes of a salvage yard. It has built the only infrastructure on earth — a two-sided digital marketplace spanning 1M+ registered buyers in 190+ countries, anchored by owned physical storage across 21,000+ irreplaceable acres — capable of converting an insurance industry's inconvenient problem (the totaled car) into global liquidity at scale. The business earns 36% operating margins on a fee-based model that carries zero inventory risk, compounds FCF at 20%+ over a decade, and operates counter-cyclically: recessions raise total-loss frequency as repair costs rise relative to vehicle values. The insurer supply relationships are embedded in claims workflows — Copart does not merely auction cars; it processes titles, dispatches towing networks, and runs the digital infrastructure through which carriers make total-loss decisions. Switching is operationally punishing. The moat is wide, the durability is 4/5, and management is a net positive: a founder-anchored governance structure (13%+ insider ownership) with a PE-trained capital allocator at the helm who has demonstrated patience (3-year buyback pause, debt elimination), opportunism (January 2026 buyback at prices below year-end), and intellectual honesty (no guidance, frank discussion of headwinds). At a 30% margin of safety and a 22× FCF exit multiple, the Neutral scenario implies a 10-year FCF runway of $3,886M — a business worth owning for a decade.