Should You Buy Copart Stock On The ACV Deal?

Copart (CPRT) has lost more than a third of its value over the past twelve months, while the S&P 500 gained about 17%. At $29.66, the stock sits at roughly 64% of its 52-week high, and the easy read is that a durable auction business has gone on sale. But its growth slowed well before the acquisition it just announced, and dealer volume is a different business from the insurance volume that is falling.

Why Is Copart Stock Down A Third?

Profitability is not what broke. Operating margin over the past twelve months was 36.6%, close to its own three-year average. Growth is what went. Revenue rose 1.0% over the past twelve months, against a three-year average of 7.4%.

Most of the pressure sits in one place, though fiscal 2025 carried hurricane volumes that fiscal 2026 had to lap. U.S. insurance volumes fell 8% in fiscal 2026, and management points to industry claim frequency as the main reason. Collision claim frequency was down 3.4% year over year, and the CEO said that without one lost customer, domestic insurance assignments would have been up 2.3% in the fourth quarter of fiscal 2026. Higher prices covered part of the gap, with revenue per unit across the company up about 5.7% in fiscal 2026, but not all of it.

Can Copart Buy Its Way Back To Growth?

So Copart is buying volume. It agreed to pay about $1.9 billion in cash for ACV, a digital automotive marketplace that sells cars for dealers, and expects to close by the end of the calendar year. ACV sells more than 800,000 vehicles a year. Copart sells over 4 million.

That is real, and it is not a rescue. The price works out at about 6% of Copart’s $30.1 billion market value. ACV’s cars come from dealers, a different funnel from the insurance salvage that shrank. Copart’s own U.S. dealer units grew 3.9% in fiscal 2026, though total U.S. noninsurance volume fell 3.9% that year, and noninsurance work is only about a quarter of its volume today.

The timing matters more than the price. Management expects the deal to be breakeven at first and accretive in the first full year, fiscal 2028. The CEO says over $2 billion will still sit on the balance sheet once it closes, and management points to its record on past acquisitions. Copart is funding the purchase with cash, and the open question is whether it can turn this cash into returns.

What Are You Buying While You Wait For Fiscal 2028?

So what are you buying at this price? A business whose economics have held, a volume line that is still shrinking, and a deal whose payoff is still ahead. That is a wait, not a bargain.

What would change the read is U.S. insurance volumes turning. Until that happens, the fair comparison is with every other stock that has fallen this far. The margin is intact and the balance sheet carries no debt. What you are risking here is time.

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