Is Copart, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Copart, Inc. has moved from very attractive to attractive, indicating a shift in perception regarding its market valuation. Based on the current metrics, Copart appears to be overvalued. The company has a P/E ratio of 33, which is higher than the peer average of 30.44 for companies like Visa, Inc. and significantly higher than PayPal Holdings, Inc. at 15.30. Additionally, its EV to EBITDA ratio stands at 23.76, compared to the peer average of 22.15, and its PEG ratio is notably high at 5.69, suggesting that growth expectations may not justify the current price.
In terms of performance, Copart's stock has underperformed relative to the S&P 500, with a year-to-date return of -22.74% compared to the S&P 500's 13.30%. Over the past three years, while the stock returned 59.90%, it still lags behind the S&P 500's 81.19% return, indicating that investors may be better off in broader market investments. Overall, these factors suggest that Copart's current valuation may not be justified given its performance and relative metrics.