William Blair analyst Dylan Becker has maintained their bullish stance on KARO stock, giving a Buy rating on October 13.
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Dylan Becker has given his Buy rating due to a combination of factors including Karooooo’s impressive second-quarter performance, where subscription revenue grew by 19% on a constant-currency basis, surpassing expectations. The company also saw a significant increase in net subscriber additions, with a 15% year-over-year rise in total subscribers. Operating income exceeded consensus estimates, reflecting a strong margin, and management has maintained a positive outlook for fiscal 2026 with anticipated growth in subscription revenue and operating margin.
Furthermore, the company’s strategic investments in its go-to-market approach have proven effective, as evidenced by the accelerating subscription revenue growth and strong demand across core regions. Encouraging cross-selling momentum has contributed to annual ARPU growth, positioning Karooooo well to achieve its growth targets. The stock is considered attractively valued, trading at a discount compared to peers, with potential for valuation improvement as the company gains credibility in the U.S. market. However, risks such as competition and foreign exchange remain considerations.
In another report released on October 13, Morgan Stanley also maintained a Buy rating on the stock with a $55.00 price target.