Karooooo (NASDAQ:KARO) Shares Gap Down - Here's What Happened

Key Points

• Karooooo Ltd. shares gapped down from a previous close of $56.40 to $50.00, last trading at $49.91 with a volume of 41,645 shares.
• The company reported $0.47 earnings per share for the quarter, exceeding expectations, and has a consensus target price of $58.25 among analysts.
• A recent annual dividend of $1.25 was paid, representing a significant dividend yield of 220.0%; however, the dividend payout ratio stands at a high 290.70%.

Karooooo Ltd. (NASDAQ:KARO - Get Free Report)'s stock price gapped down prior to trading on Wednesday . The stock had previously closed at $56.40, but opened at $50.00. Karooooo shares last traded at $49.91, with a volume of 41,645 shares changing hands.

Analyst Upgrades and Downgrades

KARO has been the subject of a number of research reports. Zacks Research downgraded Karooooo from a "strong-buy" rating to a "hold" rating in a research note on Thursday, September 11th. Raymond James Financial reissued an "outperform" rating and set a $60.00 target price (up from $58.00) on shares of Karooooo in a research note on Thursday, July 24th. Needham & Company LLC started coverage on shares of Karooooo in a report on Wednesday, July 16th. They set a "buy" rating and a $60.00 price target on the stock. UBS Group initiated coverage on shares of Karooooo in a research note on Friday, August 29th. They issued a "buy" rating and a $60.00 price objective for the company. Finally, Morgan Stanley reaffirmed an "overweight" rating and issued a $53.00 price target (up from $43.00) on shares of Karooooo in a research report on Thursday, June 26th. Four investment analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the stock. According to MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus target price of $58.25.

Karooooo Stock Performance

The stock has a market capitalization of $1.55 billion, a price-to-earnings ratio of 29.07 and a beta of 1.09. The stock's 50 day moving average is $52.74 and its two-hundred day moving average is $49.23. The company has a current ratio of 1.17, a quick ratio of 1.16 and a debt-to-equity ratio of 0.05.

Karooooo (NASDAQ:KARO - Get Free Report) last issued its quarterly earnings results on Tuesday, October 14th. The company reported $0.47 earnings per share for the quarter, topping the consensus estimate of $0.46 by $0.01. The company had revenue of $76.16 million during the quarter, compared to analysts' expectations of $73.45 million. Karooooo had a net margin of 20.23% and a return on equity of 31.48%. Karooooo has set its FY 2026 guidance at 1.830-2.000 EPS. Analysts expect that Karooooo Ltd. will post 1.57 earnings per share for the current fiscal year.

Karooooo Announces Dividend

The firm also recently disclosed an annual dividend, which was paid on Friday, August 22nd. Stockholders of record on Friday, August 15th were given a $1.25 dividend. This represents a dividend yield of 220.0%. The ex-dividend date of this dividend was Friday, August 15th. Karooooo's dividend payout ratio (DPR) is presently 290.70%.

Hedge Funds Weigh In On Karooooo

Large investors have recently made changes to their positions in the company. Bank of America Corp DE lifted its position in shares of Karooooo by 17.2% during the 2nd quarter. Bank of America Corp DE now owns 5,100 shares of the company's stock valued at $250,000 after acquiring an additional 750 shares during the period. Squarepoint Ops LLC raised its holdings in shares of Karooooo by 26.1% during the 2nd quarter. Squarepoint Ops LLC now owns 12,163 shares of the company's stock worth $596,000 after buying an additional 2,518 shares in the last quarter. New York State Common Retirement Fund boosted its stake in shares of Karooooo by 465.6% in 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. BNP Paribas Financial Markets increased its holdings in shares of Karooooo by 154.5% during the second quarter. BNP Paribas Financial Markets now owns 5,045 shares of the company's stock worth $247,000 after buying an additional 3,063 shares in the last quarter. Finally, Quantbot Technologies LP acquired a new stake in shares of Karooooo during the second quarter valued at about $156,000.

About Karooooo

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.

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