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Karooooo
(NASDAQ:KARO)
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Rating:74Outperform
Price Target:
$73.00
▲(15.25% Upside)
Action:Reiterated
Date:07/17/26
KARO scores well primarily on profitable operating performance and constructive FY-27 guidance (subscription growth and EPS expansion with healthy margin targets). The score is tempered by weak recent free-cash-flow conversion in the financial statements, a premium valuation (P/E 33.37), and technically extended conditions (RSI/Stoch elevated) despite a strong uptrend.
Positive Factors
Recurring revenue scale
Large and growing subscriber base drives predictable, recurring revenue and raises switching costs across commercial and consumer fleets. Scale supports cross-sell, lowers per-subscriber unit economics over time, and creates durable revenue visibility that underpins multi-year growth planning and capital allocation.
Negative Factors
Free cash flow volatility
Volatile and recently weak free cash flow limits the company's ability to self-fund capex, device inventories, dividends or debt reduction. If cash conversion remains impaired, management may need external financing or must curtail investments, reducing strategic optionality and increasing execution risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue scale
Large and growing subscriber base drives predictable, recurring revenue and raises switching costs across commercial and consumer fleets. Scale supports cross-sell, lowers per-subscriber unit economics over time, and creates durable revenue visibility that underpins multi-year growth planning and capital allocation.
Read all positive factors
Karooooo Key Performance Indicators (KPIs)
Any
Operating Income by Segment
Reveals profit from core operations within each segment, providing insight into which areas are most financially productive.
Reveals profit from core operations within each segment, providing insight into which areas are most financially productive.
Data provided by:
The Fly
The FlyKarooooo (KARO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.98B
Dividend Yield2.34%
Average Volume (3M)122.24K
Price to Earnings (P/E)32.2
Beta (1Y)1.16
Revenue Growth29.84%
EPS Growth13.84%
CountryUS
Employees7,395
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)33.03
Shares Outstanding30,893,300
10 Day Avg. Volume181,464
30 Day Avg. Volume122,237
Financial Highlights & Ratios
PEG Ratio2.95
Price to Book (P/B)7.01
Price to Sales (P/S)4.24
P/FCF Ratio0.00
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$68.80Price Target Upside8.62% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)39.5
Revenue Forecast (FY)$6.58B
Karooooo Business Overview & Revenue Model
Company Description
Karooooo Ltd. delivers a comprehensive software-as-a-service (SaaS) platform tailored for connected vehicles, extending its services across South Africa, the broader African continent, Europe, the Asia-Pacific region, the Middle East, and the Unit...
How the Company Makes Money
Karooooo primarily makes money by selling subscription-based telematics and connected mobility services, largely through its Cartrack-branded offerings. The company typically generates recurring revenue from monthly or multi-period service fees ch...
Karooooo Earnings Call Summary
Earnings Call Date:May 13, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 08, 2026
Earnings Call Sentiment Positive
The call emphasized strong, accelerating top-line SaaS metrics (ARR, subscription revenue, subscriber growth), exceptional free cash flow generation (+90%) and continued high retention and unit economics (LTV:CAC >9x, 95% retention), while acknowledging near-term margin pressure from a large device provision, elevated sales & marketing investments, FX translation effects and rising component costs. Management positioned the investments as deliberate and aimed at durable future growth and forecasted resumed subscription revenue acceleration and EPS growth in FY'27 despite a modest margin contraction in guidance.Positive Updates
ARR Growth
Annual Recurring Revenue (ARR) increased 18% to ZAR 5,179 million and 38% in U.S. dollars to USD 325 million, reflecting accelerating subscription momentum despite FX headwinds.
Negative Updates
Gross Margin Compression & Cost of Sales Increase
Cartrack gross profit margin declined to ~70% (from 75% the prior comparable quarter) and subscription gross margin was 71%. Q4 cost of sales rose materially due to a provision/alignment related to in-vehicle IoT device depreciation and a reported ~45% increase in the provision for devices, which contributed to near-term margin pressure.
Read all updates
Q4-2026 Updates
Positive
Negative
ARR Growth
Annual Recurring Revenue (ARR) increased 18% to ZAR 5,179 million and 38% in U.S. dollars to USD 325 million, reflecting accelerating subscription momentum despite FX headwinds.
Read all positive updates
Company Guidance
For FY‑27 management guided Cartrack subscription revenue of ZAR 5,700–6,000 million (implying ~18%–24% growth vs FY‑26 Cartrack subscription revenue of ZAR 4,831m), Cartrack gross profit margin of 70%–72%, Cartrack operating profit margin of 27%–30%, and Group adjusted earnings per share of ZAR 38.5–40 (the midpoint implies ~21% EPS growth versus FY‑26 adjusted EPS of ZAR 32.55, excluding secondary offering costs); they said they will slow hiring while driving sales‑force efficiency and AI adoption to accelerate subscription growth and EPS expansion, reiterating confidence in their cash generation and unit economics after FY‑26 adjusted free cash flow of ZAR 809m and net cash of ZAR 746m.Karooooo Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
78
Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Feb 2026 | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.77B | 5.48B | 4.57B | 4.21B | 3.51B | 2.75B |
| Gross Profit | 3.92B | 3.72B | 3.20B | 2.69B | 2.27B | 1.82B |
| EBITDA | 2.39B | 2.24B | 2.06B | 1.81B | 1.51B | 1.26B |
| Net Income | 1.02B | 993.92M | 921.03M | 738.19M | 597.15M | 449.95M |
Balance Sheet | ||||||
| Total Assets | 6.29B | 5.85B | 5.10B | 4.27B | 3.72B | 3.04B |
| Cash, Cash Equivalents and Short-Term Investments | 1.11B | 1.16B | 1.05B | 456.03M | 957.38M | 719.21M |
| Total Debt | 1.07B | 1.15B | 727.53M | 263.86M | 179.14M | 211.46M |
| Total Liabilities | 2.66B | 2.49B | 1.84B | 1.29B | 1.05B | 899.74M |
| Stockholders Equity | 3.58B | 3.31B | 3.21B | 2.94B | 2.64B | 2.11B |
Cash Flow | ||||||
| Free Cash Flow | 59.66M | 0.00 | 928.88M | 80.15M | 595.43M | 387.59M |
| Operating Cash Flow | 1.86B | 1.81B | 1.97B | 972.78M | 1.23B | 952.64M |
| Investing Cash Flow | -1.39B | -1.11B | -1.10B | -949.50M | -677.29M | -740.88M |
| Financing Cash Flow | -741.19M | -649.35M | -452.00M | -603.97M | -457.21M | -442.92M |
Karooooo Technical Analysis
Positive
63.34
Price Trends
54.24
Positive
51.04
Positive
48.14
Positive
Market Momentum
3.02
Positive
66.23
Neutral
59.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KARO, the sentiment is Positive. The current price of 63.34 is above the 20-day moving average (MA) of 62.73, above the 50-day MA of 54.24, and above the 200-day MA of 48.14, indicating a bullish trend. The MACD of 3.02 indicates Positive momentum. The RSI at 66.23 is Neutral, neither overbought nor oversold. The STOCH value of 59.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KARO.
Karooooo Risk Analysis
Karooooo disclosed 69 risk factors in its most recent earnings report. Karooooo reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Karooooo Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $1.98B | 32.17 | 31.36% | 2.36% | 29.84% | 13.84% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
58 Neutral | $385.00M | -18.69 | -9.84% | ― | 18.84% | 94.41% | |
56 Neutral | $1.65B | -16.67 | -48.82% | ― | 29.82% | -23.35% | |
53 Neutral | $159.18M | -3.88 | 56.12% | ― | 110.30% | 57.62% | |
49 Neutral | $1.87B | -7.39 | -23.79% | ― | ― | ― | |
45 Neutral | $97.25M | -3.93 | 80.95% | ― | 24.21% | 72.85% |
* Technology Sector Average
KARO
Karooooo
64.81
20.22
45.36%
CRNC
Cerence
9.15
-0.02
-0.16%
MRT
Marti Technologies
1.75
-0.67
-27.89%
RDZN
Roadzen Inc
1.33
0.13
10.83%
WRD
WeRide
6.30
-2.89
-31.45%
VIA
Via Transportation, Inc. Class A
22.21
-28.84
-56.49%
Karooooo Corporate Events
Karooooo Shareholders Approve All Resolutions at July 28, 2026 AGM
Jul 28, 2026
Karooooo Limited held its Annual General Meeting of Shareholders in Singapore on July 28, 2026, with a quorum present representing its 30,893,300 ordinary shares in issue. Shareholders considered both routine and special business, including board ...
Karooooo Clarifies AGM Record Date and Confirms Meeting Arrangements
Jul 23, 2026
Karooooo Ltd. confirmed on July 23, 2026, that its annual general meeting (AGM) arrangements remain as previously announced, with June 15, 2026 set as both the record date for distribution of the AGM notice and for shareholders’ eligibility ...
Karooooo Details July 2026 Interim Dividend Timetable and South African Tax Treatment
Jul 9, 2026
Karooooo Ltd. has reaffirmed the timetable for its interim cash dividend tied to its dual listings on Nasdaq and the JSE, with key trading, record, and payment dates set between July 14 and July 27, 2026. Shareholders face temporary restrictions o...
Karooooo Sets July 15 Release Date for First Quarter 2027 Results
Jul 8, 2026
Karooooo Limited, a Singapore-based operational intelligence and connected operations specialist, plans to report its First Quarter 2027 financial results on July 15, 2026. The owner of Cartrack and majority owner of Karooooo Logistics continues t...
Karooooo Sets July 28, 2026 Electronic AGM for Shareholders
Jul 2, 2026
Karooooo Ltd. has scheduled its annual general meeting of shareholders to be held via electronic communication on Tuesday, July 28, 2026, at 12:00 South African time (6:00 a.m. Eastern Time), in line with requirements of the Singapore Companies Ac...
Karooooo Posts Record FY 2026 Results and Hikes Dividend as Cartrack Growth Accelerates
May 13, 2026
On May 13, 2026, Karooooo reported record subscription revenue, operating income and adjusted earnings per share for the fourth quarter and fiscal year ended February 28, 2026, driven by robust growth at Cartrack and Karooooo Logistics. Cartrack&#...
Karooooo Sets May 13 Date to Report Q4 and Full-Year 2026 Results
May 5, 2026
Karooooo Limited, a Singapore-based operational intelligence cloud provider that owns 100% of Cartrack and 81% of Karooooo Logistics, helps commercial customers manage fleets, fuel, assets, logistics, workforce, safety, and compliance across more ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.