UBS Starts Karooooo Ltd. (KARO) at Buy

UBS analyst Taylor McGinnis initiates coverage on Karooooo Ltd. (NASDAQ: KARO) with a Buy rating and a price target of $60.00.

The analyst comments: "We initiate coverage of KARO, a telematics, fleet management and delivery-as-a-service company, with a Buy rating. At CY26 4x EV/S & 22x EV/FCF, KARO trades at a ~45-55% discount to peers, which we see as largely justified given its emerging market exposure (~70% of revs in South Africa). That said, with the FTSE/JSE Index trading at a ~43% 3-year avg. discount to the S&P and considering KARO's above‑avg. high-teens growth, we think the risk/reward is attractive, particularly for emerging market investors. It's rare to find a SaaS company with a 45% Rule of 40 and accelerating growth. We believe it's well positioned to sustain high-teens growth as it strategically targets underserved markets, scales sales, capitalizes on early cross-sell opportunities and benefits from regulatory, safety and security initiatives that offer additional tailwinds. We're modeling 19% Y/Y growth in FY26/FY27E vs. Street at 18% Y/Y and 16% Y/Y, respectively."

For an analyst ratings summary and ratings history on Karooooo Ltd. click here. For more ratings news on Karooooo Ltd. click here.

Shares of Karooooo Ltd. closed at $52.53 yesterday.

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