Karooooo (NASDAQ:KARO) Shares Gap Down After Analyst Downgrade

Key Points

• Karooooo shares gapped down after Freedom Capital downgraded the stock from strong-buy to hold, opening below the prior close before stabilizing later in the session.
• Despite the downgrade, other analysts remain constructive: the stock still has an average Buy rating and an average price target of $73.50, with several firms recently reiterating or raising buy ratings.
• The company reported better-than-expected quarterly earnings of $0.59 per share on $96.26 million in revenue and also announced a higher annual dividend of $1.50 per share, up from $1.25.

Karooooo Ltd. (NASDAQ:KARO - Get Free Report) shares gapped down before the market opened on Monday after Freedom Capital downgraded the stock from a strong-buy rating to a hold rating. The stock had previously closed at $65.16, but opened at $62.69. Karooooo shares last traded at $64.03, with a volume of 10,948 shares traded.

A number of other research firms have also recently issued reports on KARO. Needham & Company LLC raised their target price on Karooooo from $60.00 to $70.00 and gave the company a "buy" rating in a research note on Tuesday, July 14th. Weiss Ratings reiterated a "buy (b-)" rating on shares of Karooooo in a research report on Friday, April 24th. Wall Street Zen lowered shares of Karooooo from a "buy" rating to a "hold" rating in a research note on Sunday, June 21st. Zacks Research upgraded shares of Karooooo from a "hold" rating to a "strong-buy" rating in a research note on Tuesday, July 7th. Finally, UBS Group reaffirmed a "buy" rating and set a $75.00 price target on shares of Karooooo in a report on Thursday. One investment analyst has rated the stock with a Strong Buy rating, five have given a Buy rating and one has assigned a Hold rating to the company's stock. According to data from MarketBeat.com, Karooooo presently has an average rating of "Buy" and an average target price of $73.50.

Institutional Trading of Karooooo

Hedge funds and other institutional investors have recently made changes to their positions in the stock. Fideuram Asset Management Ireland dac acquired a new stake in shares of Karooooo in the 4th quarter worth approximately $80,000. Royal Bank of Canada raised its holdings in Karooooo by 852.9% during the fourth quarter. Royal Bank of Canada now owns 2,954 shares of the company's stock worth $135,000 after purchasing an additional 2,644 shares in the last quarter. Quantbot Technologies LP acquired a new stake in Karooooo in the second quarter worth approximately $156,000. New York State Common Retirement Fund boosted 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 in the last quarter. Finally, State of Tennessee Department of Treasury bought a new position in Karooooo during the 2nd quarter valued at $214,000.

Karooooo Trading Up 1.8%

The stock has a market capitalization of $1.97 billion, a P/E ratio of 32.39 and a beta of 0.89. The business has a 50 day simple moving average of $50.13 and a 200-day simple moving average of $48.83. The company has a debt-to-equity ratio of 0.15, a quick ratio of 1.01 and a current ratio of 1.02.

Karooooo (NASDAQ:KARO - Get Free Report) last posted its quarterly earnings data on Wednesday, July 15th. The company reported $0.59 EPS for the quarter, topping analysts' consensus estimates of $0.51 by $0.08. The company had revenue of $96.26 million for the quarter. Karooooo had a return on equity of 32.03% and a net margin of 17.74%.Karooooo has set its FY 2027 guidance at 2.334-2.425 EPS. On average, analysts predict that Karooooo Ltd. will post 2.41 EPS for the current year.

Karooooo Increases Dividend

The firm also recently announced an annual dividend, which will be paid on Monday, July 27th. Investors of record on Friday, July 17th will be paid a dividend of $1.50 per share. This is a boost from Karooooo's previous annual dividend of $1.25. This represents a yield of 239.0%. The ex-dividend date of this dividend is Friday, July 17th. Karooooo's dividend payout ratio (DPR) is currently 76.14%.

About Karooooo

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.

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