Copart Inc.’s stock, down about 48% over the past 52 weeks, is under pressure as some analysts cut forecasts ahead of fiscal third-quarter results and an April 2025 lawsuit alleging leadership fostered years of misconduct weighs on its reputation.
The decline in the Dallas-based online vehicle auction company’s stock over the past 52 weeks is a stark contrast to the S&P 500’s 30.6 percent gain over the same period.
For instance, Copart’s stock fell from a 52-week high of $63.85 to a 52-week low of $32.20, according to an earnings estimate from Barchart, which said today the stock is trading at $33.29.
The decline comes as some analysts grow more cautious heading into Copart’s fiscal third-quarter results, scheduled for May 21.
According to Zacks’ April 30 research report, while Copart remains “well-positioned for growth” due to its market leadership and digital-first platform, “rising operating costs and continued investment spending may pressure margins in the near term.”
Additionally, according to Zacks, dependence on a limited pool of large sellers and intense competition for supply and contracts remain key risks, while advances in vehicle safety technology could gradually reduce accident frequency and impact future volumes.
“As such, we are cautious on the stock now,” the report says, noting that earnings expectations have softened.
The Zacks consensus estimate for full-year earnings has been revised downward by 3.7 percent over the past 60 days. Analysts now expect fiscal 2026 earnings of $1.58 per share, slightly below $1.59 in fiscal 2025, while quarterly profit is projected to come in at $0.42 per share, flat year over year, according to Barchart.
Copart’s own financial results underscore the pressure. In its most recent quarter, reported Feb. 19, the company posted earnings per share of $0.36, down from $0.40 a year earlier. Revenue declined 3.6 percent year over year to $1.12 billion, while net income fell 9.5 percent to $350.7 million.
Several factors are weighing on performance, according to Zacks, including rising operating costs for several quarters, amid increasing general and administrative (G&A) expenditures.
“In the latest quarter, G&A spend reached $89.4 million, up 3.2 percent year over year,” said Zacks. “These costs are expected to continue rising as the company continues to invest in its employees, technology and operations, which may weigh on near-term margins.”
Another reason to sell, says Zacks, is that Copart faces strong competition from remarketers of salvage and non-salvage vehicles for contracts, supply agreements, and storage facilities. Key competitors include vehicle auctioneers, like Ritchie Bros. (and subsidiary Insurance Auto Auctions), Carvana, Openlane, Manheim, and ACV Auctions, as well as dismantlers like LKQ Corp.
Other industry analysts have cited a decline in total-loss vehicle volume — a core input to Copart’s business — reducing supply, with U.S. insurance-obtained vehicles down 9.5 percent in fiscal Q1 2026.
Strategic shifts away from lower-value vehicle purchases and toward fee-based models, while potentially margin-accretive, also have dampened unit volumes and unsettled investors focused on top-line growth, they say.
Conversely, analysts also note the company has a leadership position in the automotive auction market, commanding roughly 40 percent of the market share; Copart is aggressively integrating artificial intelligence across its global operations to drive productivity and enhance its marketplace; and the company has financial flexibility, reporting at the end of December 2025 that it had $6.4 billion of liquidity, including $5.1 billion in cash and investments, says Zacks.
Pending lawsuit
At the same time as Wall Street scrutinizes Copart’s near-term financial outlook, a separate and more fundamental challenge has emerged — one that goes beyond margins and market share.
A lawsuit filed in April 2025 in Dallas County District Court by former Global Vice President of Human Resources Christine Arnold alleges years of misconduct and a deeply entrenched culture of discrimination within Copart’s leadership ranks.
“Copart is a $35 billion publicly traded company operating more like a Mad Men-era boys’ club where male executives caught with prostitutes at company events are rewarded with multi-million dollar stock options while women who raise concerns about sexual harassment and gender discrimination are silenced, retaliated against, and fired,” the lawsuit states.
The complaint further alleges systemic gender imbalance at the highest levels of the company, noting that at every level, Copart’s leadership lacks gender diversity, underscoring its discriminatory culture against women.
“At the time of plaintiff’s termination, Copart had zero women in the C-Suite, only two women on its 11-member Board, and just three of 27 vice presidents were female,” the lawsuit says. “Indeed, Copart was the very last of the S&P 500 companies to have a female board member, and its first and only female C-Suite executive in company history was not appointed until 2022.”
Arnold, who worked at Copart from August 2006 until October 2022 and most recently served as global head of HR, alleges she was subjected to discrimination and harassment throughout her tenure.
According to the lawsuit, she was “inundated with inappropriate and sexually suggestive details about ‘men-only’ parties; verbally berated for opposing gender discrimination and sexual harassment; yelled at and physically blocked from exiting her office; and forced to accommodate male executives caught with prostitutes at company events.”
She also claims she was paid less than similarly situated male colleagues, excluded from significant stock option grants, and ultimately terminated after raising concerns.
Her “termination was the direct result of her unwillingness to ignore and excuse the unequal treatment and discrimination against her and women that has been woven into the very fabric of Copart’s existence,” the lawsuit alleges.
Arnold states she never received a negative performance evaluation during her nearly 17-year career and consistently earned top ratings, merit increases, and bonuses — though, she claims, smaller than those awarded to male peers.
She is seeking compensatory and punitive damages, attorneys’ fees, and other remedies, including revocation of the company’s license to operate in Texas if any judgment is not satisfied.
Copart has denied the allegations, responding through its law firm that Arnold’s allegations are baseless, she has created fictional complaints, and the former exec was terminated for violating confidentiality policies rather than retaliation.