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Penetrating commercial and dealer wholesale consignments via integrated buyer liquidity and condition reporting, expanding non-insurance volume from 25% toward 35% of total throughput while leveraging existing yard infrastructure.
Insurance carrier contract churn or pricing concessions emerging from competitive salvage auction RFP re-bidding.
We rate Copart Inc. a Hold. At the report-date price of $27.22 as of October 2, 2026, the stock trades close to our house Fair value of $26.58 per share, offering a balanced risk-reward profile as capital cycle normalization offsets near-term insurance carrier contract contestability.2
We assign a Hold rating to Copart Inc. shares. For an everyday investor, a Hold recommendation indicates that the stock is fairly valued relative to its underlying business fundamentals. Current shareholders should maintain existing positions, but fresh capital should be withheld until a wider margin of safety emerges.
On the report date of October 2, 2026, Copart shares traded at $27.22. This report-date price stands roughly in line with our house Fair value midpoint of $26.58, representing an implied return of -2.35%. If operational execution and dealer consignment growth accelerate beyond expectations, long-term business expansion offers of up to $32.78 per share.
The principal risk that would dismantle our thesis is contract churn or pricing concessions during periodic insurance carrier request-for-proposal renegotiations. Because Copart operates high-fixed-cost vehicle storage yards, any loss of major insurer salvage assignments would depress regional throughput and lead to operational deleverage, threatening to push operating margins below 32.50% from the 35.42% achieved in fiscal 2026. Investors would observe this risk materializing if gross margins drop below 40.0% or annual revenue growth slows below 1.50% YoY.45
The strongest reason Copart can compound value over time is capital cycle normalization driving superior free cash flow conversion. After years of aggressive land buying, annual capital spending retreated from $568.99 million in fiscal 2025 to $337.36 million in fiscal 2026. Concurrently, secular increases in collision repair costs and vehicle complexity raise total loss rates, channeling growing salvage volume through Copart's high-margin Service revenue line. This dynamic enables operating cash flow ($1,604.49 million in fiscal 2026) to translate into abundant free cash flow, supporting our $26.58 Fair value and creating a path toward $32.78 Potential value as non-insurance dealer volume expands.456
Copart's network of metropolitan vehicle storage yards is protected by restrictive municipal zoning permits that competitors cannot replicate, sustaining global buyer liquidity across 190 countries and delivering a 35.42% operating margin in fiscal 2026.45
Following peak capacity buildout in fiscal 2025 ($568.99M capex, 12.2% of sales), capital spending fell 40.7% to $337.36M in fiscal 2026 (7.2% of sales), enabling operating cash flow of $1,604.49M to convert directly into expanding owner earnings.5
With collision repair costs up more than 50% from 2019 levels and car rental rates rising 4.5% year over year, insurers are declaring total losses on a growing proportion of damaged vehicles, funneling high-margin volume to Copart's digital auctions.46
Hold: Copart trades in line with our house Fair value of $26.58 per share, as exceptional auction marketplace pricing power and capital cycle normalization are balanced by near-term carrier contract renewal friction and facility cost inflation.
Copart Inc. provides online vehicle auction and remarketing services across North America and international markets. The company operates a digital marketplace connecting vehicle sellers—primarily automotive insurance carriers, banks, finance companies, fleet operators, and automotive dealers—with global vehicle buyers, including licensed dismantlers, rebuilders, repair facilities, and used vehicle retailers.
The company provides vehicle sellers with a full suite of remarketing services designed to expedite vehicle processing, maximize net salvage sales proceeds, and minimize administrative costs. These services encompass nationwide vehicle transport and secure storage across dedicated yard facilities, digital title processing, and salvage condition documentation.
Copart also equips commercial sellers with proprietary technology platforms and real-time transaction data. Sellers access gross and net sales returns, service fees, and over 300 real-time and historical data fields to generate ad hoc analytics, monitor vehicle disposition, and administer salvage inventories efficiently.
Under an acute operational stress test where insurance carrier RFP renegotiations lead to localized volume defection and persistent facility operations expenses compress operating margins below 32.5%, Copart's balance sheet provides exceptional structural resilience. With $1,907.90M in cash against only $88.37M of debt, CPRT carries net cash of over $1.8B. Even with capital expenditures remaining near historical buildout levels ($510.99M-$568.99M in FY2024-FY2025) rather than the normalized $337.36M reported in FY2026, Copart's operating cash flow ($1,604.49M in FY2026) comfortably covers all capital requirements without external debt financing.
In the downside scenario, cooling vehicle repair inflation and flattening total loss frequency constrain salvage auction volume growth. Periodic carrier contract negotiations lead to customer defection or fee concessions, causing regional yard volume deleverage. Simultaneously, commercial dealer expansion encounters prolonged operational friction, with elevated per-vehicle inspection and transportation expenses depressing gross margins, while capital expenditures re-escalate to defend storage capacity. This scenario would be disconfirmed if core service auction volumes accelerate or per-car operating costs decline across upcoming reporting periods.
FY2026 gross margin fell to 41.8% and gross profit dropped by $15.8M due to cost inflation in long-haul delivery, TitleExpress, and dedicated wholesale yards, alongside persistent per-car operating costs and carrier RFP contestability. An operating margin dropping below 32.5% vs FY2026 35.42% would represent severe structural deleverage.45
The five developments that would weaken our investment case.
Signals severe yard operational expense deleverage, persistent per-car cost inflation, or significant pricing concessions across insurance carrier contract renewals.
Current:35.42% in FY2026
Alert if<32.50%
Copart commands a wide economic moat rooted in its dominant two-sided vehicle remarketing marketplace and irreplaceable real estate footprint. Unlike asset-light digital matchmakers, salvage auto auctions require vast, strategically located physical storage yards adjacent to major population centers. Regulatory and municipal hurdles surrounding industrial zoning, environmental clearances, and storm-water runoff regulations make recreating Copart's hundreds of storage facilities virtually impossible today. This physical foundation underpins a localized duopoly structure that shields the company from new entrants.
On top of its physical infrastructure, Copart has cultivated powerful network effects. By drawing registered commercial buyers, dismantlers, rebuilders, and international exporters across over 190 countries, Copart maximizes vehicle salvage realization for insurance carriers. Higher auction returns attract more vehicle volume from insurers, which in turn reinforces buyer liquidity. This virtuous loop is evident in Copart's Service revenue line, which accounted for $3,969.52M or 85.07% of the $4,666.21M in FY2026 revenue.
These structural advantages translate into extraordinary operating profitability. In FY2026, Copart delivered $1,652.59M in operating income, representing an operating margin of 35.41%. This towers over conventional industrial peers such as CARR (13.07%), LHX (12.57%), and TXT (8.70%). Combined with a fortress balance sheet holding $1,907.90M in cash against only $88.37M in debt, Copart possesses unmatched competitive insulation and capital compounding durability.
Copart generates a return on invested capital of ~16.6% (and 27.69% per third-party models), substantially exceeding its moderate cost of equity of 9.50% and WACC of 9.52%. Operating income of $1,652.59M on revenue of $4,666.21M generates an operating margin of 35.41%, maintaining an economic profit spread exceeding 700 bps across cycles.125
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
The highlighted cell is Fair value when every assumption sits at its base level ($26.58). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $1.3B after modeled reinvestment of $117.6M, with terminal value at 74.4% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
In the base scenario, assigned 60.0% probability with a target of $26.58 yielding an implied return of -2.4% relative to the share price $27.22, Copart maintains its steady compounding trajectory. High-margin service revenue expands steadily, supported by structural repair complexity and ancillary fee capture from digital documentation. Capital expenditures normalize from prior peak transformation levels to sustainable maintenance requirements, driving healthy free cash flow conversion. Dealer wholesale initiatives progress toward breakeven over the near term. This scenario would be confirmed by stable mid-single-digit revenue growth and consistent operating margins through FY2028, whereas disconfirmation would stem from unexpected tier-one carrier defection or prolonged facility operations cost inflation.
A material beat driven by accelerating service volume, successful non-insurance consignment scaling, and operating leverage would indicate that operational cost headwinds are resolving faster than anticipated, warranting an upward adjustment in valuation toward Potential value $32.78.
Performance tracking inline with consensus confirms the base case compounding trajectory, with Fair value at $26.58 aligning closely with the share price $27.22.
A substantial miss resulting from carrier contract losses or persistent per-car operating expense deleverage would signal deterioration in competitive positioning, eroding the margin of safety relative to Fair value $26.58.
Copart exhibits high earnings quality supported by strong cash conversion, where operating cash flow closely tracks operating income. Because revenue is primarily fee-based service remuneration rather than vehicle inventory merchandise sales, working capital requirements are modest and inventory obsolescence risk is negligible. Receivables collections remain disciplined with major insurance carriers, and capital expenditure discipline post yard buildout ensures that reported earnings translate directly into tangible free cash flow.
Analyst estimate momentum has trended downward following the recent annual release, reflecting near-term operational expense absorption in long-haul delivery, dedicated wholesale yards, and TitleExpress rollout. While full-year revenue expectations remain stable, consensus earnings forecasts for upcoming fiscal periods have been revised downward to incorporate higher per-vehicle operating expenses before efficiency gains materialize.
Service revenue represents the vast majority of consolidated sales and delivers superior margins; continued fee capture expansion via digital documentation and salvage services drives consolidated operating profit and intrinsic valuation.
Cash flow dynamics reflect high quality of earnings and superior cash conversion. Operating cash flow reached $1,604.49M in FY2026, closely backing operating income of $1,652.59M and GAAP net income of $1,484.27M. With capex declining to $337.36M, free cash flow expanded to $1,267.13M, representing free cash flow conversion of 85.4% of net income. Owner earnings reached $1,494.36M, computed from net income of $1,484.27M plus D&A of $229.37M minus estimated maintenance capex of $219.29M (65% of normalized capex), confirming robust economic cash generation.
With operating income of $1,652.59M and an effective tax rate of 19.33%, NOPAT is approximately $1,333.1M. As capital spending normalizes from peak buildout levels ($568.99M in FY2025 down to $337.36M in FY2026), invested capital growth moderates while NOPAT expands, positioning returns on capital to improve over the forecast period.
Copart generates returns on invested capital of ~16.6%, vastly exceeding its cost of equity of 9.50% and WACC of 9.52%, delivering a persistent economic profit spread exceeding 700 bps.
FY2026 capex retreated by 40.7% to $337.36M (7.23% of revenue) from $568.99M in FY2025 and $510.99M in FY2024.
| Revenue | $4,666,209,000 |
|---|---|
| Cost of revenue | $2,582,351,000 |
| Gross profit | $2,083,858,000 |
| Operating expenses | $431,268,000 |
| Operating income | $1,652,590,000 |
| Non-operating items and tax | -$168,320,000 |
| Net income | $1,484,270,000 |
| Total assets | $10,027,810,000 |
|---|---|
| Cash | $1,907,901,000 |
| Current assets | $5,568,194,000 |
| Total liabilities | $913,930,000 |
| Current liabilities | $703,741,000 |
| Shareholders’ equity | $9,097,295,000 |
| Net income | $1,484,270,000 |
|---|---|
| Operating inflow | $1,752,461,000 |
| Depreciation and amortization | $229,373,000 |
| Stock-based compensation | $38,818,000 |
| Operating cash flow | $1,604,492,000 |
| Operating outflow | $147,969,000 |
| Cash available | $4,392,356,000 |
| Beginning cash | $2,780,531,000 |
| Exchange-rate effect | $7,333,000 |
| Investing outflow | $877,601,000 |
| Capex | $337,363,000 |
| Other investing activities | $540,238,000 |
| Financing outflow | $1,606,854,000 |
| Ending cash | $1,907,901,000 |
| Investing cash flow | -$877,601,000 |
| Financing cash flow | -$1,606,854,000 |
Point-in-time financial data used in the 2026-10-05 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2017-07-31 | — | $520.9M | $394.2M | $492.1M | $319.9M | $172.2M | $57M | $20.8M | $0 | $0 | — | -$335.8M | -$107M | — | $210.1M | $210.1M | $631M | — | — | 6.1% | — |
| 2018-07-31 | — | $661.5M | $417.9M | $535.1M | $247.2M | $287.9M | $78.6M | $23.2M | $0 | $235K | — | -$288.5M | -$182M | $210.1M | $274.5M | $274.5M | $400M | — | — | 6.5% | — |
| 2019-07-31 | — | $809.7M | $591.7M | $646.6M | $272.8M | $373.9M | $84.9M | $23.4M | $365M | — | — | -$356.3M | -$370.3M | $274.5M | $186.3M | $186.3M | $400M | — | — | 5.1% | — |
| 2020-07-31 | $525.7M | $922.5M | $699.9M | $917.9M | $325.9M | $592M | $101.4M | $23.3M | $0 | $103.5M | — | -$601.2M | -$27.4M | $186.3M | $477.7M | $477.7M | $400M | 155.3% | — | 5.3% | — |
| 2021-07-31 | $2.7B | $1.3B | $936.5M | $990.9M | $527.9M | $463M | $122M | $40.9M | $0 | $6.1M | — | -$465.5M | $40.9M | $477.7M | $1B | $1B | $400M | 42.2% | — | 5.9% | — |
| 2022-07-31 | $3.5B | $1.5B | $1.1B | $1.2B | $839.2M | $337.4M | $138M | $39M | — | $1.9M | -$417.3M | -$442.3M | -$382.7M | $1B | $1.4B | $1.4B | $0 | 39.3% | — | 7.7% | — |
| 2023-07-31 | $3.9B | $1.7B | $1.2B | $1.4B | $847.6M | $516.6M | $159.5M | $39.7M | — | $4.7M | $10.5M | -$1.9B | $66.6M | $1.4B | $957.4M | $2.4B | $11M | 38.4% | — | 9.4% | — |
| 2024-07-31 | $4.2B | $1.9B | $1.4B | $1.5B | $961.6M | $511M | $189.8M | $35.2M | $0 | — | -$10.8M | -$940.1M | $19.3M | $957.4M | $1.5B | $3.4B | $118.7M | 37.1% | — | 9.8% | — |
| 2025-07-31 | $4.6B | $2.1B | $1.6B | $1.8B | $1.2B | $569M | $215.8M | $38M | $0 | — | -$49K | -$587.4M | $52.1M | $1.5B | $2.8B | $4.8B | $103.7M | 36.5% | — | 8.4% | — |
| 2026-07-31 | $4.7B | $2.1B | $1.5B | $1.6B | $1.3B | $337.4M | $229.4M | $38.8M | $1.6B | — | — | -$877.6M | -$1.6B | $2.8B | $1.9B | $4.5B | $88.4M | 35.4% | — | 8.6% | — |
Copart Inc. (CPRT) trades at 17.2x forward earnings against a peer median of 17.1x. Its EV/EBITDA of 11.2x compares with a peer median of 15.9x. The comparison uses 4 peers: Cintas Corporation, L3Harris Technologies Inc., Carrier Global Corporation and Textron Inc., as of 2026-10-04 to 2026-10-05.
Between FY2024 and FY2025, Copart underwent an intensive storage yard expansion cycle, with capex rising from $510.99M to a peak of $568.99M (12.2% of revenue and 2.61x D&A) in FY2025. In FY2026, capex contracted sharply by 40.7% to $337.36M (7.23% of revenue and 1.47x D&A). Note that third-party industry-wide capex benchmarks are unavailable, so this capital cycle assessment is company-specific, demand-led, and evidence-limited regarding broader salvage capacity.5
In an industry upcycle, escalating technological complexity in passenger vehicles (ADAS sensors, battery systems, and electronic components) drives collision repair inflation above CCC historical rates (>50% increase since 2019), boosting insurer total loss declarations. Concurrently, expanding commercial dealer consignments via condition reporting integration unlocks high-end whole-car inventory, driving double-digit unit auction throughput and operating leverage across physical yards.
In an industry downcycle, softening used vehicle valuations and stabilizing repair costs compress total loss frequencies, moderating salvage volume assignment growth. Periodic insurer RFP renegotiations introduce customer churn, while higher per-car operating costs and transportation expense inflation erode gross profit margins toward 40%.
Copart occupies a dominant duopoly position in the global vehicle remarketing industry. Its physical network of proprietary, zoned storage yards and unmatched liquidity across 190+ buyer countries generate industry-leading profitability. In FY2026, Copart delivered an operating margin of 35.41% ($1,652.59M operating income on $4,666.21M revenue), dramatically outperforming capital goods peer margins such as CARR (13.07%), LHX (12.57%), and TXT (8.70%).2345
Copart is an exceptional mature compounder with a wide economic moat, pristine balance sheet ($1.91B cash vs $88.37M debt), and robust operating margins (35.41%). However, with the share price of $27.22 trading essentially in line with Fair value of $26.58 (-2.35% implied return), the risk/reward profile supports a Hold stance with a measured 2-3% portfolio sizing, awaiting better entry valuation or margin re-acceleration.25
Position risk is mitigated by Copart's dominant physical auction network, pristine balance sheet, and absence of operational debt covenants. Catastrophic weather events introduce quarter-to-quarter volume and towing expense volatility, but historically expand salvage consignment supply over 6-12 month horizons. Carrier concentration is managed through multi-regional yard density, digital integration via TitleExpress, and maximizing recovery values to secure carrier retention.
Copart's wide economic moat, two-sided buyer network, and 35.42% operating margin support steady long-term compounding. However, at the report-date price of $27.22 as of October 2, 2026, shares trade roughly in line with our house Fair value of $26.58 (-2.35% implied return), indicating a balanced valuation that warrants holding current positions.25
Carrier contract renegotiations and customer loss acknowledged on the Q4 2026 call introduce assignment volume uncertainty. If yard operations deleverage and operating margins decline toward 32.50% from ancillary service cost inflation, earnings multiple contraction could occur, confirming that investors should avoid adding new capital.4
Secular vehicle repair complexity continues expanding total loss frequency, while non-insurance dealer wholesale expansion provides long-term Potential value up to $32.78. Because management guided dealer initiatives to be breakeven in fiscal 2027 before turning accretive in fiscal 2028, patience is advised before increasing portfolio weight.4
We recommend a Hold on Copart Inc. at the report-date price of $27.22 as of October 2, 2026. The stock trades at a slight 2.41% premium to our house Fair value of $26.58 (-2.35% implied return), reflecting a balanced valuation where capital cycle normalization is counterbalanced by carrier contract contestability.2
Investors should maintain current allocations and monitor fiscal 2027 yard throughput, carrier contract renewals, and dealer wholesale integration progress before committing new capital.
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The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
CPRT trades at 17.15x forward P/E, while industrial peers CARR and LHX trade at 16.66x and 17.48x, and TXT trades at 10.64x. The modeled terminal P/E of 18.0x assumes a persistent premium. If market growth expectations fade, the forward multiple would de-rate toward 14.5x, reflecting lower structural compounding.2
Indicates loss of major insurer accounts or failure to scale non-insurance dealer consignments, capping growth below core compounding expectations.
Current:3.80% projected in FY2027 based on consensus over FY2026 revenue of $4,666.21M
Alert if<1.50% YoY
Re-escalation of capital intensity above peak transformation levels (12.2% in FY2025), depressing free cash flow conversion.
Current:7.23% in FY2026 ($337.36M capex on $4,666.21M revenue)
Alert if>12.00%
Reflects chronic facility operations cost inflation in long-haul delivery and wholesale facilities failing to achieve unit economics.
Current:41.80% in FY2026
Alert if<40.00% across two consecutive years
Contraction in Service revenue would indicate carrier volume defection or loss of buyer liquidity, requiring a full re-underwrite of core compounding durability.
Current:Product Service revenue of $3,969.52M in FY2026
Alert if<=0.00% YoY contraction
| Ancillary Operating Cost Deleverage and Per-Car Expense Inflation | low | 12-18 months | Active management focus on per-car operating cost reduction and operating leverage as transaction volume expands across dedicated wholesale facilities.4 |
| Long-Term Collision Rate Moderation from Autonomous Driver Assistance Systems (ADAS) | medium | 5-10 years | Surging vehicle technological complexity, sensor density, and higher repair costs (>50% increase from 2019 levels) structurally elevate total loss thresholds, counteracting potential accident moderation.4 |
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and terminal value at WACC, then adjust for signed net debt per current share.
Discounted forecast-period cash flows ($5.63) plus discounted terminal value ($16.40) minus signed per current share (-$4.75) equals the $26.78 lens value shown above. Negative net debt is , so subtracting it raises value.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Solve for the growth rate that makes the model value equal the report-date share price.
In the upside scenario, representing 20.0% probability and a target of $32.78 delivering an implied return of 20.4%, vehicle total loss frequency accelerates as collision repair complexity escalates, expanding salvage auction assignments. Simultaneously, dealer wholesale consignments scale rapidly across dedicated facilities with high inspection quality, accelerating non-insurance volume and driving operating margins toward the upper end of historical levels. Free cash flow conversion expands as capital expenditures stabilize near maintenance needs. This scenario would be confirmed by accelerating quarterly service revenue and expanding operating margins by FY2028, while disconfirmation would appear if dealer transactions fail to achieve operating profitability or carrier fee compression occurs.
Operating profitability measures fixed yard cost absorption and pricing power; margin compression indicates facility expense deleverage or carrier contract concessions, reducing earnings compounding.
Lower capital intensity following multi-year land acquisition programs directly expands free cash flow conversion, funding shareholder capital returns.
Commercial and dealer trades represent the primary avenue for volume growth beyond mature insurance salvage pools, unlocking incremental auction fees.
Carrier salvage assignments form the core volume baseline; account churn or volume defection creates regional yard volume deleverage.
| $5.38B |
| $5.65B |
| $5.90B |
| Revenue growth | 3.8% | 5.3% | 5.5% | 5.0% | 4.5% |
| Operating margin | 35.4% | 35.5% | 35.7% | 35.8% | 36.0% |
| Operating income | $1.72B | $1.81B | $1.92B | $2.02B | $2.12B |
| Tax rate | 19.3% | 19.3% | 19.3% | 19.3% | 19.3% |
| NOPAT | $1.38B | $1.46B | $1.55B | $1.63B | $1.71B |
| Reinvestment | $117.64M | $131.40M | $147.16M | $163.10M | $171.39M |
| Reinvestment rate (of NOPAT) | 8.5% | 9.0% | 9.5% | 10.0% | 10.0% |
| Free cash flow to firm | $1.27B | $1.33B | $1.40B | $1.47B | $1.54B |
| Terminal growth | 3.0% | 3.0% | 3.0% | 3.0% | 3.0% |
Copart follows a disciplined, counter-cyclical capital allocation strategy. Following aggressive real estate yard investments in FY2024 ($510.99M) and FY2025 ($568.99M), capital expenditures moderated to $337.36M in FY2026. Management directs excess capital primarily toward share repurchases, deploying $1,632.54M in FY2026 to retire shares, while maintaining a fortress balance sheet with $1,907.90M in cash against $88.37M in debt. Copart pays no regular dividend, preserving dry powder for strategic yard and technology acquisitions.
Service revenue generated $3,969.52M in FY2026, comprising 85.07% of consolidated sales, driving operating margin of 35.41%.
Unlike pure wholesale merchants carrying vehicle inventory risk, Copart primarily earns fee-based auction commission, insulating operating earnings from swings in used car prices.
Cash and equivalents stood at $1,907.90M as of FY2026 end against total debt of just $88.37M, yielding net cash of over $1.8B.
CPRT can self-fund opportunistic M&A in the auction space or absorb catastrophic surge volumes without external debt financing.
| Margin |
|---|
| CPRT | Copart Inc. | $25.2B | 17.2x | 5.4x | 11.2x | 16.2% | — |
| CTAS | Cintas Corporation | $77.1B | 31.3x | 6.7x | 25.6x | 41.4% | 24.1% |
| LHX | L3Harris Technologies Inc. | $44.1B | 17.5x | 1.9x | 13.4x | 9.3% | 12.6% |
| CARR | Carrier Global Corporation | $45.8B | 16.7x | 2.1x | 18.4x | 9.0% | 13.1% |
| TXT | Textron Inc. | $13.4B | 10.6x | 0.9x | 9.6x | 12.1% | 8.7% |
| Advanced Driver Assistance Systems (ADAS) and Long-Term Collision Frequency | neutral | While autonomous safety features and active collision avoidance may gradually reduce minor fender-benders over a multi-decade horizon, the substantially higher repair cost per collision offsets lower frequency by raising total loss thresholds. |
| <1.50% YoY over trailing 12 months |
| Re-underwrite thesis assumptions regarding carrier retention and pause any planned position additions.4 |
| Capex-to-revenue ratio | >12.00% across consecutive fiscal periods | Reduce intrinsic valuation target to reflect prolonged reinvestment requirements and delayed free cash flow conversion.5 |
| Consolidated gross margin | <40.00% sustained across consecutive quarters | Re-assess dealer wholesale and ancillary service unit economics and model lower terminal margin trajectory.4 |
