After touching yearly lows, Copart’s stock is gradually ascending, yet the technical outlook remains divided. As the shares post modest gains in the current session, investors are grappling with a pivotal question: Will the company’s strategic push for improved service margins be sufficient to definitively reverse the prevailing downtrend?
Critical Test Approaches with November Earnings
The upcoming quarterly report, scheduled for November 20, represents a crucial juncture for the vehicle auction specialist. Market researchers are forecasting earnings per share of $0.40, which would translate to an 8.1 percent year-over-year increase. The company’s recent performance has been a mixed bag; in the fourth quarter of 2025, it posted an EPS of $0.41, surpassing the $0.37 estimate, but revenue of $1.13 billion narrowly missed the $1.14 billion expectation. This resulted in the stock declining 2.8 percent following the earnings release.
Wall Street’s Cautious Optimism
Despite recent setbacks, the consensus rating on Wall Street remains a “Moderate Buy” for Copart. The average price target of $54.50 suggests an upside potential exceeding 26 percent from current trading levels. However, this apparent unanimity masks a deeply divided analyst community:
Should investors sell immediately? Or is it worth buying Copart?
- HSBC upgraded the stock to “Strong Buy” in September, establishing a $62 price target.
- In contrast, Stephens reduced its target from $50 to $46, maintaining an “Equal Weight” rating.
- CFRA reaffirmed its “Strong Buy” recommendation but adjusted its price objective downward from $70 to $65 after the Q4 results.
This divergence highlights the prevailing uncertainty regarding the company’s near-term prospects.
Service Margin Strategy Under the Microscope
The recent partnership with One Inc., aimed at modernizing payments for lienholders, underscores Copart’s intensified focus on higher-margin services. This strategic shift is timely, as the company contends with pressure from macroeconomic headwinds and a decline in vehicle sales volumes.
From a technical analysis perspective, the equity is caught in a tug-of-war. While a buy signal was triggered from a low point on October 30, both short-term and long-term moving averages continue to flash sell signals. The trading action over the next several sessions will be critical in determining whether Copart can validate its nascent recovery or if it will retreat back towards its recent lows.
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