Copart

Methodology

Copart's salvage vehicle auction business shows modest earnings cyclicality tied to accident rates and vehicle volumes, though online platform economics provide underlying stability. The asset-light model generates high returns and consistent profitability across economic cycles. Fair value calculations work well given predictable double-digit earnings growth from market share gains and geographic expansion.

Methodology

Copart typically trades at PEG ratios between 2.0-3.5x, reflecting premium valuations for its network effects and dominant market position in salvage auctions. The company's technology platform and yard network create formidable competitive moats. PEG appears expensive but reflects sustainable growth from insurance industry digitization and international expansion.

Methodology

Copart doesn't pay dividends and reinvests all cash flow into facility expansion and technology development to strengthen competitive advantages. Management focuses on compounding intrinsic value through market share gains rather than returning cash. Total return depends entirely on earnings growth and multiple expansion as the moat widens.