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1. Company Snapshot

1.a. Company Description

Karooooo Ltd.provides mobility software-as-a-service (SaaS) platform for connected vehicles in South Africa, rest of Africa, Europe, the Asia-Pacific, the Middle East, and the United States.The company offers Fleet Telematics, a fleet management SaaS platform that provides real-time insights; LiveVision, which offers pro-active risk management and fleet visibility; MiFleet advanced fleet administration and business intelligence that provides cost management and administration capability services; and Karooooo Logistics, a software application for management of last mile delivery and general operational logistics.


It also provides Cartrack Field Service, a software application for management of field and on site workers; Business Intelligence for high-level view of fleet statistics; asset tracking for tracking and tracing moveable assets; asset recovery services that assists vehicle owners and insurance companies with the recovery of vehicles and other assets; and insurance telematics that allows insurers to tailor premiums for commercial and consumer customers using analytics; Protector, a safety package for consumer vehicles; and Car Watch, a mobile application that lets users track and watch their vehicles.In addition, the company offers specialist mobility solutions that include Bike Track, a GPS-based solution for commercial motorbike fleets; Credit Management that predicts payment cycles and facilitate active credit management for asset-based vehicle finance; electronic monitoring services application that allows law enforcement agencies to monitor persons of interest; and mobility and monitoring solutions, such as Carzuka, cartrack insurance agency, and on-demand rideshare taxi application, as well as smart IoT products.It provides its solutions through direct sales force to consumers and sole proprietors, small and medium-sized businesses, large enterprises, and other connected devices.


Karooooo Ltd.was founded in 2001 and is headquartered in Singapore.

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1.b. Last Insights on KARO

Karooooo Ltd.'s recent performance was negatively impacted by the lack of recent earnings releases, which may indicate a delay in reporting. The company's strong growth prospects, including a 17% year-over-year increase in subscribers and expansion into new markets, were not reflected in recent news. The launch of Cartrack-Tag, a wireless asset tag, may have been overshadowed by the absence of recent financial updates. The company's participation in the Raymond James 26th Annual Institutional Investors Conference in February suggests a focus on investor engagement, but the lack of recent news may have contributed to market uncertainty.

1.c. Company Highlights

2. Karoaroo's Strong Q1 FY2026 Earnings Report

Karoaroo's Q1 FY2026 earnings report showcased a strong financial performance, with total subscription revenue increasing 18% to ZAR 1,141 million and operating profit rising 17% to ZAR 352 million. The company's annual recurring revenue (ARR) grew 18% to ZAR 4.57 million, and on a US dollar basis, ARR increased 24% to USD 254 million. Earnings per share increased 19% to ZAR 8.55, and the company generated ZAR 338 million in free cash flow. The company's balance sheet remains strong, with net cash and cash equivalents of ZAR 1,103 million.

Publication Date: Jul -24

📋 Highlights
  • Revenue Growth: Total subscription revenue increased 18% to ZAR 1,141 million, with operating profit rising 17% to ZAR 352 million.
  • Annual Recurring Revenue (ARR): ARR grew 18% to ZAR 4.57 million, and 24% to USD 254 million, driven by strong subscriber growth.
  • Subscriber Growth and Retention: The company serves over 2.4 million subscribers across 125,000 businesses, with a commercial customer ARR retention rate of 95%.
  • Earnings and Cash Flow: Earnings per share increased 19% to ZAR 8.55, and the company generated ZAR 338 million in free cash flow, with a strong balance sheet.

Financial Highlights

The company's financial performance was driven by strong growth in its Cartrack operations management SaaS platform, with subscription revenue growing 19% to ZAR 1,138 million and operating profit margin reaching a healthy 30%. The LTV to CAC ratio remains above 9x, driven by strong retention and disciplined capital allocation. According to management, "The acceleration in the business reflects the strength of the operating model and early traction from strategic investments in sales capacity and customer acquisition."

Segment Performance

In South Africa, subscriber growth was consistent in Q1, with good traction in both commercial and consumer customer growth expected to continue. In Southeast Asia, growth is driven by increasing footprint and market addressal, not US tariff impacts. The company aims to increase ARPU by around 6% and 10% in South Africa through cross-selling video and Cartrack, with progress being good, with a 2% uplift in Q1, and momentum expected to build.

Valuation and Outlook

The company's valuation multiples are as follows: {'P/E Ratio': 28.6, 'P/B Ratio': 8.22, 'P/S Ratio': 5.77, 'EV/EBITDA': 17.48, 'Dividend Yield (%)': 2.22, 'Free Cash Flow Yield (%)': 6.33, 'ROIC (%)': 23.52, 'ROE (%)': 30.94, 'Net Debt / EBITDA': -0.21}. With an actual EPS of '0.47' relative to estimates at '0.45', analysts estimate next year's revenue growth at 18.2%. The company's strong financial performance and growth prospects justify its premium valuation multiples.

3. NewsRoom

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Karooooo Ltd. (KARO) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -04

Source: seekingalpha.com

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Karooooo to Participate in Upcoming Investor Conferences

Nov -25

Source: businesswire.com

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Analyzing Karooooo (NASDAQ:KARO) and CS Disco (NYSE:LAW)

Nov -22

Source: defenseworld.net

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Cartrack and Volkswagen Group Info Services AG Form Partnership for Fleet Data Integration

Nov -18

Source: businesswire.com

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Why Karooooo Limited Plunged Today

Oct -15

Source: fool.com

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Karooooo Earnings: Cartrack Shines

Oct -15

Source: fool.com

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Karooooo Ltd. (KARO) Q2 2026 Earnings Call Transcript

Oct -15

Source: seekingalpha.com

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Karooooo Ltd: Still A Great Business, But The Price Feels Ahead Of Itself

Oct -15

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.25%)

6. Segments

Subscription - Cartrack

Expected Growth: 10.27%

Karooooo's Cartrack subscription growth of 10.27% is driven by increasing demand for vehicle tracking and fleet management solutions, expansion into new markets, and a growing need for businesses to optimize their logistics and transportation operations. Additionally, the rise of IoT and telematics adoption, as well as government regulations promoting vehicle safety and security, contribute to the segment's growth.

Vehicle

Expected Growth: 10.43%

Karooooo Ltd.'s 10.43% growth in Vehicle segment is driven by increasing adoption of its SaaS-based fleet management solutions, expansion into new markets, and growing demand for digitalization in the logistics industry. Additionally, the company's focus on improving operational efficiency, reducing costs, and enhancing customer experience through its innovative technology platform has contributed to its rapid growth.

Delivery

Expected Growth: 9.27%

Karooooo Ltd.'s 9.27% growth is driven by increasing demand for its logistics and delivery services, expansion into new markets, strategic partnerships, and investments in technology and infrastructure. Additionally, the company's focus on operational efficiency, cost reduction, and customer satisfaction have contributed to its growth momentum.

Hardware

Expected Growth: 12.07%

Karooooo Ltd.'s 12.07% growth in Hardware is driven by increasing demand for telematics solutions, expansion into new markets, and strategic partnerships. The company's focus on innovation, particularly in AI-powered fleet management, has also contributed to its growth. Additionally, the rising need for vehicle tracking and monitoring systems in various industries has fueled demand for Karooooo's hardware products.

Installation

Expected Growth: 10.27%

Karooooo Ltd.'s 10.27% growth is driven by increasing adoption of its fleet management solutions, expansion into new markets, and strategic partnerships. The company's innovative technology, which provides real-time tracking and analytics, has resonated with customers seeking to optimize their logistics operations. Additionally, the growing demand for digitalization in the transportation industry has contributed to the company's rapid growth.

Miscellaneous Contract Fees

Expected Growth: 10.08%

Karooooo Ltd.'s Miscellaneous Contract Fees growth of 10.08% is driven by increasing adoption of its digital payment solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, improving operational efficiency, and enhancing customer experience have contributed to the growth.

Subscription - Karooooo Logistics

Expected Growth: 10.27%

Karooooo Logistics' 10.27% growth is driven by increasing demand for digital logistics solutions, expansion into new markets, and strategic partnerships. The company's innovative platform, which provides real-time tracking and monitoring, has attracted a large customer base. Additionally, the rise of e-commerce and the need for efficient supply chain management have contributed to the segment's growth.

7. Detailed Products

Karoooo Fleet

A fleet management system that helps businesses to track and manage their vehicles in real-time, providing insights on vehicle performance, driver behavior, and route optimization.

Karoooo Route

A route optimization platform that helps businesses to plan and optimize their delivery routes, reducing miles driven and lowering emissions.

Karoooo Track

A GPS tracking system that provides real-time location tracking and monitoring of vehicles, assets, and equipment.

Karoooo Drive

A driver behavior and safety platform that provides insights on driver performance, helping businesses to reduce accidents and improve road safety.

Karoooo Analytics

A business intelligence platform that provides data analytics and insights on fleet operations, helping businesses to make data-driven decisions.

8. Karooooo Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Karooooo Ltd. operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the growing demand for alternative transportation services.

Bargaining Power Of Customers

Karooooo Ltd. has a large customer base, but the bargaining power of customers is high due to the availability of alternative services and the ease of switching.

Bargaining Power Of Suppliers

Karooooo Ltd. has a diverse supplier base, and the bargaining power of suppliers is low due to the availability of alternative suppliers and the company's strong negotiating power.

Threat Of New Entrants

The threat of new entrants is moderate due to the presence of barriers to entry, such as regulatory requirements and high capital costs, but the market is still attractive to new entrants.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of established competitors and the growing demand for transportation services, leading to a competitive market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 6.44%
Debt Cost 3.95%
Equity Weight 93.56%
Equity Cost 9.13%
WACC 8.80%
Leverage 6.88%

11. Quality Control: Karooooo Ltd. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Karooooo

A-Score: 6.8/10

Value: 2.7

Growth: 7.7

Quality: 9.0

Yield: 5.8

Momentum: 8.0

Volatility: 7.7

1-Year Total Return ->

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InterDigital

A-Score: 6.6/10

Value: 3.0

Growth: 8.8

Quality: 9.0

Yield: 3.0

Momentum: 10.0

Volatility: 6.0

1-Year Total Return ->

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SS&C Technologies Holdings

A-Score: 5.9/10

Value: 3.9

Growth: 6.1

Quality: 6.8

Yield: 2.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Agora

A-Score: 5.5/10

Value: 9.2

Growth: 3.4

Quality: 5.6

Yield: 0.0

Momentum: 8.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Commvault Systems

A-Score: 4.2/10

Value: 0.7

Growth: 6.9

Quality: 6.6

Yield: 0.0

Momentum: 7.0

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
AMTD Digital

A-Score: 2.9/10

Value: 1.4

Growth: 3.4

Quality: 6.6

Yield: 0.0

Momentum: 3.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

47.13$

Current Price

47.13$

Potential

-0.00%

Expected Cash-Flows