Karooooo (NASDAQ:KARO) Shares Gap Up on Better-Than-Expected Earnings

Karooooo Ltd. (NASDAQ:KARO) shares gapped up before the market opened on Wednesday following a better than expected earnings announcement. The stock had previously closed at $44.76, but opened at $48.34. Karooooo shares last traded at $45.2010, with a volume of 17,055 shares traded.

The company reported $0.49 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.46 by $0.03. Karooooo had a return on equity of 31.83% and a net margin of 19.45%.The business had revenue of $82.34 million during the quarter, compared to the consensus estimate of $79.04 million. Karooooo has set its FY 2026 guidance at 1.876-2.049 EPS.

Karooooo News Summary

Here are the key news stories impacting Karooooo this week:

• Positive Sentiment: Q3 results beat consensus — EPS of $0.49 and revenue of $82.34M topped estimates, underscoring solid SaaS profitability and drove the immediate market reaction. Karooooo Ltd. (KARO) Q3 2026 Earnings Call Transcript
• Positive Sentiment: Subscription momentum: company-reported subscriber surge and a ~20% increase in subscription revenue indicate accelerating recurring revenue and ARR expansion, a key driver of higher long-term value. Karooooo accelerates growth on subscriber surge
• Positive Sentiment: Forward guide for FY2026 EPS set to 1.876–2.049, which markets interpret as confident management guidance above some sell-side forecasts — supportive for multiple expansion. Karooooo Ltd. 2026 Q3 – Results – Earnings Call Presentation
• Neutral Sentiment: Company posted an unaudited short-form announcement for Q3 results — useful for verifying official figures but not adding new directional information beyond the call. KAROOOOO LIMITED – Short-form Announcement: Unaudited Third Quarter 2026 Results
• Negative Sentiment: Management flagged higher growth investments — capital and operating spend to scale ARR could weigh on near-term free cash flow and margins despite revenue beats. Karooooo Earnings Call: ARR Surges, Growth Investments Rise
• Negative Sentiment: Liquidity ratios are modest (quick ratio ~0.79, current ratio ~0.80) and the stock sits below its 200‑day MA, which could concern investors focused on balance-sheet buffer and technicals if growth spending continues.

Analysts Set New Price Targets

Several research analysts have weighed in on the stock. Wall Street Zen upgraded shares of Karooooo from a “hold” rating to a “buy” rating in a research report on Saturday, December 6th. Weiss Ratings restated a “hold (c+)” rating on shares of Karooooo in a research note on Tuesday, January 13th. Four equities research analysts have rated the stock with a Buy rating and two have given a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $58.25.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the company. Jones Financial Companies Lllp increased its stake in Karooooo by 159.4% in the 3rd quarter. Jones Financial Companies Lllp now owns 804 shares of the company’s stock worth $46,000 after buying an additional 494 shares in the last quarter. Murphy & Mullick Capital Management Corp boosted its stake in shares of Karooooo by 260.0% in the third quarter. Murphy & Mullick Capital Management Corp now owns 900 shares of the company’s stock worth $51,000 after acquiring an additional 650 shares during the period. Copeland Capital Management LLC purchased a new stake in shares of Karooooo during the third quarter worth about $76,000. Quantbot Technologies LP bought a new stake in Karooooo during the 2nd quarter valued at approximately $156,000. Finally, New York State Common Retirement Fund raised its stake in Karooooo by 465.6% during the 2nd quarter. New York State Common Retirement Fund now owns 3,258 shares of the company’s stock valued at $160,000 after purchasing an additional 2,682 shares during the period.

Karooooo Trading Up 6.0%

The company has a debt-to-equity ratio of 0.06, a quick ratio of 0.79 and a current ratio of 0.84. The company has a market capitalization of $1.42 billion, a PE ratio of 24.84 and a beta of 1.06. The stock has a fifty day moving average of $45.62 and a 200 day moving average of $48.46.

Karooooo Company Profile

Karooooo Ltd is a global provider of telematics software-as-a-service solutions for vehicle and fleet management. Through its flagship platform, the company delivers real-time GPS tracking, stolen vehicle recovery and driver behaviour analytics, enabling commercial fleets and automotive insurers to optimise operations, increase safety and reduce costs.

Karooooo’s SaaS platform integrates proprietary hardware devices with cloud-based analytics and mobile applications. Customers gain access to live vehicle location data, engine diagnostics, route planning tools and customizable reporting dashboards.