Copart (CPRT) Stock Soars 9% on $1.9B ACV Auctions Takeover Announcement

Key Highlights

• Fourth-quarter revenue reached $1.15 billion, representing a 2.4% year-over-year increase and surpassing analyst expectations of $1.14 billion
• Earnings per share of $0.35 fell short of the $0.39 analyst projection, declining 14.6% compared to last year’s corresponding quarter
• Shares declined 4% in regular trading to $30.75 before rallying 8.59% after hours to $33.39
• The company unveiled plans to purchase ACV Auctions for $1.9 billion in cash at $10.50 per share, representing a 45% premium over recent trading levels
• Quarterly net income decreased 17.4% to $327.4 million while gross profit contracted 5.5% amid rising operational expenses

Copart delivered a split performance for its fourth quarter on Thursday, exceeding revenue projections while missing earnings targets. The shares tumbled 4% during normal trading hours before staging a dramatic reversal when markets closed.

In extended trading, CPRT rallied 8.59% to reach $33.39, climbing from its regular session closing price of $30.75.

Copart, Inc., CPRT

The company reported quarterly revenue of $1.15 billion, marking a 2.4% increase from the same period last year and slightly topping the Street consensus of $1.14 billion. However, earnings came in at $0.35 per diluted share, falling approximately 10% short of the $0.39 analyst forecast.

Attributable net income dropped 17.4% year over year to $327.4 million. Gross profit contracted 5.5% to $481 million, with gross margin settling at 41.8%.

The company’s operating income fell 10.6% to $368.9 million, as operating expenses per vehicle increased 12.7% compared to the prior year. Company leadership acknowledged these cost pressures and indicated plans to reduce this metric going forward.

Worldwide unit sales decreased 2.9% during the quarter and 5.5% for the full fiscal year when excluding catastrophe-related units. Insurance volumes in the United States weakened, mirroring reduced claims frequency throughout the broader industry.

Major ACV Auctions Takeover

The headline news of the session came from Copart’s announcement of a definitive agreement to acquire ACV Auctions through an all-cash transaction valued at roughly $1.9 billion. The $10.50 per share offer price reflects a 45% premium over ACV’s previous closing price. ACV shares jumped over 40% in after-hours trading.

ACV provides a digital platform for wholesale vehicle transactions, linking dealers, commercial buyers, and sellers throughout the used vehicle market. According to Copart, this acquisition extends its presence into the dealer-to-dealer wholesale remarketing segment.

The deal is anticipated to finalize by year-end 2026. Copart projects the acquisition will be breakeven during the current fiscal year and contribute positively to earnings in fiscal 2028. Following the transaction’s completion, the company expects to maintain over $2 billion in cash reserves.

Evercore is serving as financial advisor to Copart for the transaction, while J.P. Morgan Securities is advising ACV.

Overseas Expansion and Financial Position

A positive development during the quarter was the company’s international segment performance. International revenue climbed 11.7% year over year to $222.1 million, exceeding domestic business growth.

Revenue per unit grew 5.4% in the quarter, while worldwide average selling prices advanced 3.5% versus the prior year. Non-insurance volumes in domestic markets returned to positive growth territory.

Copart closed the period with $5.7 billion in total liquidity as of July 31, comprised of $4.5 billion in cash equivalents and held-to-maturity securities. The company maintains a debt-free balance sheet and has access to $1.25 billion through its revolving credit facility.

Chief Executive Jay Adair emphasized that Copart operates with a long-term perspective, thinking “in decades” rather than quarters, and characterized artificial intelligence as “a very important differentiator” that the company intends to leverage for cost reduction and platform demand generation.

CPRT’s 52-week trading range spans from $26.81 to $49.05. The after-hours price of $33.39 positions the stock approximately 32% below its 52-week peak.