Karooooo Ltd. (KARO)

Price$64.49Cached quoteAs of 2026-09-04 16:23 UTC

AI: Fair-priced

Price checkKARO trades near the upper end of its one-year range, with meaningful growth already priced in.

Karooooo Ltd. is the Nasdaq-listed issuer under KARO. Using FY2026 adjusted EPS of $2.05, the stock trades at roughly 31 times trailing adjusted earnings. Management guides FY2027 EPS growth of 18%-23% in rand and Cartrack subscription revenue growth of 18%-24%, so investors are already paying for sustained high-teens-to-low-twenties growth. That multiple is defensible for a recurring-revenue business, but it leaves limited room for execution misses, supporting a Fair-priced rather than clearly cheap view.

Big pictureEarnings are growing, while near-term free cash flow is being absorbed by accelerated customer investment.

Q1 2027 revenue rose 22% and operating profit reached ZAR410 million, but free cash flow fell to ZAR60 million because Karooooo accelerated spending on in-vehicle devices, inventory and working capital for subscriber growth. The company reported ZAR755 million of net cash and cash equivalents, roughly ZAR437 million of term loans, and ZAR750 million of overdraft facilities. Cash generation remains credible, but near-term free cash flow is intentionally thinner while growth investment stays elevated.

Business strengthRecurring subscriptions, strong customer economics, and broad industry exposure support business quality through normal cycles.

Cartrack subscription revenue increased 19% year over year in Q1, or 21% in constant currency, while subscribers rose 18% above 2.8 million and net additions hit a record. Customer relationships typically exceed 60 months and lifetime value to customer-acquisition cost remains above nine times, indicating strong acquisition economics. The 20-F says broad industry exposure has historically limited cyclical dependence. A recent secondary offering involved existing holders rather than new company shares, and the Q1 share count was unchanged, limiting actual dilution.

What could change the storyThe valuation improves if growth converts to cash; weaker sales efficiency or margins would pressure the multiple.

Bull case: Cartrack converts recent sales hiring into 18%-24% subscription growth, keeps operating margin within 27%-30%, and free cash flow rebounds as device investment normalizes; earnings could then grow into the current multiple. Bear case: sales-force productivity lags, gross margin falls toward the 70% guidance floor, working-capital and hardware spending stay high, or rand moves against the dollar, weakening reported USD results. With valuation already demanding, even modest misses could trigger multiple compression.

AI: News

Q1 growth acceleratesRecord subscriber additions and faster recurring revenue growth supported management’s unchanged full-year outlook.

On July 15, Karooooo reported Q1 FY2027 revenue of ZAR1.564 billion and record operating profit of ZAR410 million. Cartrack subscription revenue grew 19% year over year, or 21% in constant currency, while subscribers surpassed 2.8 million and net additions rose 70%. Management reaffirmed FY2027 guidance for 18%-24% subscription revenue growth and 18%-23% EPS growth, signaling confidence that prior sales-force investment is translating into faster growth.

AGM renews capital authorityShareholders renewed both buyback and share-issuance authority, preserving flexibility for future capital allocation.

At the July 28 annual general meeting, all proposed resolutions passed. Shareholders approved the financial statements, director and auditor matters, and renewed authority for directors to repurchase ordinary shares and to issue and allot shares. The votes do not mean a buyback or new issuance occurred; they simply preserve both options. That matters for investors because repurchases can reduce share count, while future issuance could dilute existing ownership if used materially.

FY2026 cash flow strengthensFull-year results paired stronger adjusted cash flow with a larger dividend and faster growth guidance.

On May 13, Karooooo reported FY2026 subscription and operating records, with adjusted free cash flow up 90% to ZAR809 million. Adjusted EPS rose 3% in rand and 20% in U.S.-dollar terms to $2.05. The board declared a $1.50 per-share dividend for July, 20% higher year over year. Management also guided FY2027 to faster Cartrack subscription growth and roughly low-twenties EPS growth at the midpoint.

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Revenue

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Financial statements

	2026	2025	2024	2023	2022	2021	2020	2019
Revenue	R5.48B	R4.57B	R4.21B	R3.51B	R2.75B	R2.29B	R1.94B	R1.69B
Gross profit	R3.72B	R3.20B	R2.69B	R2.27B	R1.82B	R1.62B	R1.37B	R1.21B
Gross margin	67.97%	70.13%	63.98%	64.79%	66.41%	70.73%	70.40%	71.37%
Research & development	R261.5M	R226.9M	R212.2M	R177.0M	R149.2M	R100.1M	R44.9M	R48.3M
Operating expenses	R2.31B	R1.89B	R1.65B	R1.39B	R1.12B	R893.5M	R736.2M	R708.1M
Operating income	R1.41B	R1.31B	R1.04B	R881.9M	R699.1M	R726.6M	R630.9M	R499.9M
Operating margin	25.82%	28.73%	24.79%	25.15%	25.46%	31.72%	32.49%	29.53%
EBITDA	R2.45B	R1.97B	R1.69B	R1.43B	R1.20B	R1.13B	R926.7M	R738.4M
EBITDA margin	44.65%	43.24%	40.20%	40.68%	43.57%	49.13%	47.72%	43.62%
Net income	R993.9M	R937.1M	R754.2M	R608.8M	R476.6M	R497.4M	R443.5M	R361.0M
Net profit margin	18.14%	20.52%	17.93%	17.36%	17.36%	21.72%	22.84%	21.33%
Basic EPSper basic share	ZAR 32.17	ZAR 29.81	ZAR 23.85	ZAR 19.29	ZAR 15.24	ZAR 15.65	—	—
Diluted EPSper diluted share	ZAR 32.17	ZAR 29.81	ZAR 23.85	ZAR 19.29	ZAR 15.24	ZAR 15.65	—	—

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 20 reported holders of KARO
Holder	Shares held
Calisto Isaias Jose	17.92M
Marais Juan	3.25M
Gobi Capital LLC	2.29M
Capricorn Fund Managers Ltd	319.35K
Telemark Asset Management, LLC	215.15K
ACADIAN ASSET MANAGEMENT LLC	169.8K
MARSHALL WACE, LLP	114.53K
MORGAN STANLEY	100.34K
SCHWARZ DYGOS WHEELER INVESTMENT ADVISORS LLC	94.22K
SCHWARTZ INVESTMENT COUNSEL INC	80.76K
Dodge & Cox	69.73K
ARROWSTREET CAPITAL, LIMITED PARTNERSHIP	69.57K
MILLENNIUM MANAGEMENT LLC	65.06K
RENAISSANCE TECHNOLOGIES LLC	57.99K
UBS Group AG	54.84K
FIRST TRUST ADVISORS LP	53.99K
HRT FINANCIAL LP	51.6K
CenterBook Partners LP	48.78K
Aristides Capital LLC	46.5K
CITADEL ADVISORS LLC	41.93K

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 3 ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

Review ownership filings at SEC.gov ↗

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