Intrinsiqq
Karooooo Ltd. logoKarooooo Ltd.KARO
$60.38-3.45%
Karooooo Ltd. logo

Karooooo Ltd.

KARO

$60.38

-$2.16 (-3.45%)

⊜ Compare
ProfitabilityStrong marginsGrowthAcceleratingCash FlowStrong conversionValuationNot cheap
What stands out

Margins and capital returns are both well above average: 25.82% operating margin, ROIC at 24.92%. Consistent with durable pricing power, though that alone doesn't make it a buy.

What's changing

Revenue grew 20.0%, still solid. Margins contracted 2.9pp, which offsets some of the top-line progress.

What deserves caution

At 30x earnings, the current multiple leaves limited room for execution misses or growth deceleration. Free cash flow declined 12% versus the prior year, cash generation momentum has weakened.

Valuation context

29.9x earnings, 16.5x FCF. Not cheap, the quality is already reflected in the price. Upside from here requires either margin expansion or growth re-acceleration, not just continuation.

Price History

+36.5%

Valuation & Multiples

Based on TTM earnings · Diluted shares

Market CapZAR 30.65B
EPSZAR 33.15
P/E29.93
P/FCF16.46
EV/EBITDA20.36
FCF Yield6.1%
Div. Yield2.22%
Net Debt/FCF-0.0x
52-Week Range
$41.60$68.71

Profitability & Returns

Revenue (TTM)

ZAR 5.77B

▲ +20.0% YoY

Net Income (TTM)

ZAR 1.04B

▲ +7.9% YoY

Op. Margin

25.54%

▼ -2.9pp YoY

ROIC

24.92%

▼ -2.3pp YoY

Cash Flow & Balance Sheet

FCF (TTM)

ZAR 1.86B

▼ -12.3% YoY

Op. Cash Flow (TTM)

ZAR 1.86B

▼ -11.6% YoY

Net Debt

-ZAR 10M

Net Cash Position

Cash & Equiv.

ZAR 1.15B

3Y CAGR: +16.0%

3Y CAGR: +14.3%

Continue Research

Is Karooooo (KARO) overvalued?

At a P/E of 29.9 and a price-to-free-cash-flow of 16.5, Karooooo (KARO) trades below a two-stage DCF intrinsic value of about ZAR 3,043.39 per share, so at ZAR 60.38 the stock looks undervalued (4,940.4% below estimated intrinsic value). A high multiple is not the same as overvalued: fast-growing, high-quality businesses can deserve a premium. See the general approach in how to tell if a stock is overvalued.

On quality, Karooooo scores 90/100 on Intrinsiqq's quality scorecard (a high-quality business on these measures), weighing growth, margins, returns on capital, share count, and balance-sheet strength. It currently yields about 2.2%; see dividend safety for coverage and history. All figures are computed from company filings; read the full methodology, or see how the market compares in our US profitability statistics. This is analysis, not investment advice.

Frequently asked

What is Karooooo's fair value?+

Intrinsiqq's two-stage DCF estimates an intrinsic value of about ZAR 3,043.39 per share for KARO, projecting its recent free cash flow forward with a growth rate that fades toward a long-run rate and discounting it back to today. Applying a 25% margin of safety gives a more conservative fair-value entry around ZAR 2,282.55. At today's ZAR 60.38, that puts the stock about 4,940.4% below estimated intrinsic value. The result is sensitive to the growth and discount-rate inputs, so it is best to run conservative, base and optimistic cases. You can adjust all of them yourself with the sliders on the DCF tab.

Is Karooooo a high-quality business?+

Karooooo scores 90 out of 100 on Intrinsiqq's quality score, a weighted blend of 8 metrics each scored 0 to 100, which makes it a high-quality business on these measures. Recent fundamentals include a 25.5% operating margin and a 24.9% return on invested capital. The score weighs revenue and free-cash-flow growth, operating margins, return on invested capital, share-count change, and balance-sheet strength, all computed from company filings, not opinion. Because valuation only means something relative to quality, the full metric-by-metric breakdown is on the quality scorecard.

Does Karooooo (KARO) pay a dividend, and how much?+

Yes, Karooooo pays a regular dividend of about ZAR 21.98 per share per year (typically in quarterly installments), a yield of roughly 2.2% at the current price. That is a payout ratio of about 65.2% of earnings, so the dividend is covered, with less cushion. Karooooo has grown the dividend at roughly 24.7% a year over the past few years. A low headline yield is not the same as a weak dividend: what matters is how well earnings and free cash flow cover the payout and whether it is growing, not the percentage alone. For KARO's full payout history, growth streak and dividend-safety score, see the dividends tab.

Is Karooooo a good stock to buy right now?+

That depends on valuation and quality together, not either alone. KARO currently trades below its estimated intrinsic value and scores 90/100 on quality (high-quality). It also yields about 2.2%. A cheap price is only a bargain if the business is durable, and a premium can be justified by genuine quality, so the two questions, "is it cheap?" and "is it good?", only make sense side by side. Read the valuation against the quality scorecard, run the DCF on your own assumptions, and decide for yourself. This is analysis from company filings, not investment advice.

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Data sourced from company filings and third-party price providers. Scores, valuations, and metrics are algorithmic estimates. This is not investment advice. See our Terms and Methodology.

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