Zacks Research Downgrades Karooooo (NASDAQ:KARO) to Hold

Key Points

• Zacks Research has downgraded Karooooo (NASDAQ:KARO) from a "strong-buy" to a "hold" rating, reflecting adjustments in analyst outlook.
• Despite the downgrade, multiple brokerages, including Needham & Company and Raymond James, maintain positive ratings with price targets set around $60.00.
• Karooooo posted a quarterly EPS of $0.47, surpassing estimates, but reported revenue significantly below expectations at $70.49 million, prompting mixed analyst sentiments.

Karooooo (NASDAQ:KARO - Get Free Report) was downgraded by investment analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a report issued on Thursday,Zacks.com reports.

A number of other brokerages also recently issued reports on KARO. Needham & Company LLC initiated coverage on Karooooo in a research note on Wednesday, July 16th. They set a "buy" rating and a $60.00 target price for the company. Raymond James Financial reaffirmed an "outperform" rating and set a $60.00 price objective (up previously from $58.00) on shares of Karooooo in a report on Thursday, July 24th. Morgan Stanley reiterated an "overweight" rating and issued a $53.00 price objective (up previously from $43.00) on shares of Karooooo in a research report on Thursday, June 26th. UBS Group began coverage on shares of Karooooo in a research report on Friday, August 29th. They set a "buy" rating and a $60.00 target price on the stock. Finally, Wall Street Zen cut shares of Karooooo from a "strong-buy" rating to a "buy" rating in a research note on Friday, August 22nd. Four equities research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the stock. Based on data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus price target of $58.25.

Karooooo Stock Performance

Shares of KARO stock opened at $54.76 on Thursday. The stock has a market capitalization of $1.69 billion, a PE ratio of 31.84 and a beta of 1.08. Karooooo has a 52-week low of $35.51 and a 52-week high of $63.36. The stock's 50-day moving average price is $49.63 and its 200 day moving average price is $47.23. The company has a quick ratio of 1.16, a current ratio of 1.17 and a debt-to-equity ratio of 0.05.

Karooooo (NASDAQ:KARO - Get Free Report) last issued its quarterly earnings results on Tuesday, July 22nd. The company reported $0.47 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.45 by $0.02. The firm had revenue of $70.49 million for the quarter, compared to analysts' expectations of $1.25 billion. Karooooo had a return on equity of 31.48% and a net margin of 20.23%. Karooooo has set its FY 2026 guidance at 1.760-1.920 EPS. As a group, equities research analysts forecast that Karooooo will post 1.57 EPS for the current year.

Hedge Funds Weigh In On Karooooo

Several hedge funds have recently bought and sold shares of KARO. Telemark Asset Management LLC purchased a new position in Karooooo in the 2nd quarter valued at approximately $11,028,000. Fiera Capital Corp purchased a new position in Karooooo in the 2nd quarter valued at approximately $5,878,000. Marshall Wace LLP increased its stake in Karooooo by 699.1% in the 2nd quarter. Marshall Wace LLP now owns 55,602 shares of the company's stock valued at $2,723,000 after purchasing an additional 48,644 shares in the last quarter. Russell Investments Group Ltd. purchased a new position in Karooooo in the 2nd quarter valued at approximately $1,378,000. Finally, Acadian Asset Management LLC increased its stake in Karooooo by 50.1% in the 2nd quarter. Acadian Asset Management LLC now owns 69,705 shares of the company's stock valued at $3,391,000 after purchasing an additional 23,251 shares in the last quarter.

Karooooo Company Profile

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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