Needham reiterates Buy rating on Karooooo stock with $60 target

Investing.com - Needham maintained its Buy rating and $60.00 price target on Karooooo Ltd. (NASDAQ:KARO) following the company’s Q2 results. According to InvestingPro data, the company, currently valued at $1.46 billion, is trading near its Fair Value despite a recent 12% weekly decline.

Karooooo reported mid-teens subscriber growth and 4.7% year-over-year growth in average revenue per subscriber (ARR) during the second quarter, up from 1.6% growth in Q1. The company maintains strong profitability with a 69% gross margin and 14.75% revenue growth over the last twelve months.

The improved ARR per subscriber was primarily driven by enhanced cross-selling of Cartrack Tag and Video products in the South African market, according to Needham.

While Karooooo’s original fiscal year projections included approximately 6% total company ARR per subscriber growth, Needham is modeling a more conservative 4.5% growth by year-end.

The firm noted that Karooooo continues to invest in Asia-Pacific sales growth, which it views as a leading indicator for Cartrack subscription growth, supporting the company’s four-year compound annual growth rate target of 19%.

In other recent news, Karooooo Ltd reported its Q2 2025 earnings, with adjusted earnings per share (EPS) reaching ZAR 8.28, which exceeded analysts’ expectations of ZAR 7.98. Despite this earnings beat, the company’s revenue came in at ZAR 1,344 million, which was slightly below the forecasted ZAR 1,300 million. These financial results are part of the latest developments surrounding the company. The earnings report did not prevent a decline in Karooooo’s stock price, although specific stock movements are not detailed here. No mergers or acquisitions were reported in the recent updates. Additionally, there were no analyst upgrades or downgrades mentioned in the recent news. Investors and stakeholders are likely to continue monitoring Karooooo for further updates and developments.

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