Karooooo (KARO) AI Stock Analysis

• Market Cap: $1.39B
• Dividend Yield: 2.78%
• Average Volume (3M): 52.90K
• Price to Earnings (P/E): 25.3
• Beta (1Y): 1.16
• Revenue Growth: 18.30%
• EPS Growth: 22.19%
• Country: US
• Employees: 4,387
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.48
• Shares Outstanding: 30,893,300
• 10 Day Avg. Volume: 41,527
• 30 Day Avg. Volume: 52,899
• PEG Ratio: 1.25
• Price to Book (P/B): 8.12
• Price to Sales (P/S): 5.71
• P/FCF Ratio: 28.08
• Enterprise Value/Market Cap: 1.18
• Enterprise Value/Revenue: 0.33
• Enterprise Value/Gross Profit: 0.47
• Enterprise Value/Ebitda: 0.76
• 1Y Price Target: $58.33
• Price Target Upside: 29.54% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: $50.00 ▲(11.04% Upside)

Karooooo's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. While technical indicators suggest a bearish trend, the company's robust growth metrics and fair valuation provide a balanced outlook.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for Karooooo's services, enhancing its market position and supporting long-term financial stability.

Customer Retention

High customer retention demonstrates customer satisfaction and loyalty, ensuring a stable revenue base and reducing acquisition costs.

Cash Flow Management

Exceptional cash flow growth highlights effective cash management, providing resources for reinvestment and financial resilience.

Negative Factors

Sales Force Challenges

Underperformance of new sales reps can hinder revenue growth and market expansion, impacting long-term sales productivity.

Expansion Bottlenecks

Expansion delays can restrict market penetration and slow growth, affecting the company's ability to capitalize on demand.

Tax Impacts

Tax impacts can reduce net earnings, affecting profitability and potentially limiting reinvestment capacity.

Karooooo Business Overview & Revenue Model

Company Description

Karooooo Ltd. is a global technology company that specializes in mobility software solutions, primarily through its flagship platform, Cartrack. The company operates in the telematics and fleet management sector, providing a range of services including vehicle tracking, fleet optimization, and driver behavior analysis. Karooooo's innovative solutions cater to various industries, enhancing operational efficiency and safety for businesses managing vehicle fleets.

How the Company Makes Money

Karooooo generates revenue primarily through subscription fees for its software services. The company offers tiered pricing models based on the number of vehicles being monitored, with additional charges for premium features and advanced analytics. Key revenue streams include monthly and annual subscriptions from fleet management clients, as well as ancillary services such as maintenance and support. Significant partnerships with automotive manufacturers and integration with third-party applications also contribute to its earnings, expanding its market reach and enhancing the value of its service offerings.

Karooooo Financial Statement Overview

Summary

Karooooo exhibits impressive financial health with strong revenue growth, robust profitability, and a stable balance sheet with low leverage. Cash flows have improved substantially, highlighting excellent cash management.

Income Statement

Karooooo shows robust financial performance with consistent revenue growth and strong profitability. Gross Profit Margin improved to 70.11% in 2025 from 64.00% in 2024. Net Profit Margin increased to 20.17% in 2025 from 17.55% in 2024. Revenue Growth Rate was 8.61% in 2025, showcasing a strong upward trend. EBIT and EBITDA margins are healthy, reflecting operational efficiency.

Balance Sheet

The balance sheet is strong with a Debt-to-Equity Ratio of 0.23 in 2025, indicating low leverage. The Return on Equity improved to 28.76% in 2025, signifying effective use of equity. The Equity Ratio stands at 63.05%, reflecting a well-capitalized structure. Overall, the company maintains a stable financial position with low financial risk.

Cash Flow

Karooooo demonstrates solid cash flow performance. Free Cash Flow Growth Rate surged by 2102.97% in 2025, showcasing exceptional improvement. Operating Cash Flow to Net Income Ratio is strong at 2.10, indicating excellent cash conversion. Free Cash Flow to Net Income Ratio is 0.93, reflecting effective cash management despite high capital expenditures.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.03B	4.57B	4.21B	3.51B	2.75B	2.06B
Gross Profit	3.49B	3.20B	2.69B	2.27B	1.82B	1.46B
EBITDA	2.15B	2.07B	1.83B	1.51B	1.26B	1.03B
Net Income	1.00B	921.03M	751.90M	597.15M	449.95M	285.97M
Balance Sheet
Total Assets	4.93B	5.10B	4.27B	3.72B	3.04B	2.86B
Cash, Cash Equivalents and Short-Term Investments	420.82M	1.05B	456.03M	957.38M	719.21M	967.58M
Total Debt	654.98M	727.53M	263.86M	179.14M	211.46M	1.00B
Total Liabilities	1.88B	1.84B	1.29B	1.05B	899.74M	1.60B
Stockholders Equity	2.99B	3.21B	2.94B	2.64B	2.11B	838.18M
Cash Flow
Free Cash Flow	0.00	928.88M	80.15M	595.43M	387.59M	413.27M
Operating Cash Flow	1.60B	1.97B	972.78M	1.23B	952.64M	842.91M
Investing Cash Flow	-1.13B	-1.10B	-949.50M	-677.29M	-740.88M	-475.67M
Financing Cash Flow	-746.83M	-452.00M	-603.97M	-457.21M	-442.92M	-426.42M

Karooooo Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 45.03
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KARO, the sentiment is Neutral. The current price of 45.03 is above the 20-day moving average (MA) of 43.96, below the 50-day MA of 48.58, and below the 200-day MA of 47.04, indicating a neutral trend. The MACD of -0.99 indicates Negative momentum. The RSI at 49.76 is Neutral, neither overbought nor oversold. The STOCH value of 80.34 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KARO.

Karooooo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KARO	76 Outperform	$1.39B	25.29	34.42%	2.78%	18.30%	22.19%
JAMF	69 Neutral	$1.72B	―	-5.48%	―	12.28%	42.19%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	61 Neutral	$590.32M	―	-26.69%	―	13.09%	32.34%
PRCH	56 Neutral	$1.02B	39.71	―	―	-2.13%	―
AMPL	52 Neutral	$1.36B	―	-37.47%	―	12.78%	-20.47%

Karooooo Corporate Events

Karooooo Reports Strong Q2 2026 Financial Results with Significant Growth

On October 14, 2025, Karooooo Ltd. announced its unaudited financial results for the second quarter and half-year of 2026, showing significant growth in several key areas. The company reported a 20% year-over-year increase in Cartrack’s subscription revenue and SaaS annualized recurring revenue, alongside a 15% rise in subscribers, reaching 2.5 million. Karooooo’s adjusted earnings per share rose by 13%, and the company reaffirmed its fiscal year 2026 outlook, highlighting its ability to scale and maintain a strong financial position. These results underscore Karooooo’s robust market positioning and potential positive implications for stakeholders.

Karooooo to Announce Q2 2026 Financial Results on October 14, 2025

On October 6, 2025, Karooooo announced its plan to release the Second Quarter 2026 Financial Results on October 14, 2025. The company will host a Zoom webinar on October 15, 2025, to discuss these results, indicating its commitment to transparency and stakeholder engagement. This announcement is part of Karooooo’s ongoing efforts to maintain its industry position and provide valuable insights to its investors and stakeholders.