GET DAILY SIGNALSKarooooo (KARO) Posts Solid Revenue Beat but Adjusted EPS Falls Short of Estimates
Key Takeaways
- Karooooo reported revenue of ZAR1.64 billion for its fiscal second quarter (Q2 2027), up from ZAR1.34 billion a year earlier and above the FactSet consensus estimate of ZAR1.60 billion.
- Adjusted earnings per share (EPS) came in at ZAR9.28, falling short of the ZAR9.55 consensus estimate by ZAR0.28.
- Cartrack subscription revenue grew 20% year over year to ZAR1,415 million, accelerating to 23% in constant currency.
- Annualized recurring revenue (ARR) rose 19% to ZAR5,708 million, roughly US$354 million, up 30% in U.S. dollar terms.
- Operating profit reached a record ZAR422 million, up 19% year over year despite foreign-exchange headwinds.
- Shares fell 8.5% in after-hours trading following the earnings-per-share miss.
Putting the Quarter in Context
Karooooo Limited is a Singapore-based mobility software company that owns 100% of Cartrack, its operational intelligence and fleet telematics platform, along with a majority stake in Karooooo Logistics. Because the company follows a February year-end, its recently reported quarter reflects the second quarter of fiscal 2027, covering the three months ended August 31, 2026. This report matters to investors because it tests whether Cartrack's accelerating subscription momentum can hold up against a strengthening South African rand, which reduces the reported value of revenue earned in other currencies. The results also offer a read on profitability and cash generation as management balances subscriber acquisition with disciplined cost control. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Breaking Down the Reported Numbers
Karooooo reported total revenue of ZAR1.64 billion for Q2 fiscal 2027, up about 22% from ZAR1.34 billion a year earlier and above the FactSet consensus estimate of ZAR1.60 billion. On a constant-currency basis, revenue rose 25%. Cartrack subscription revenue increased 20% to ZAR1,415 million, and grew 23% excluding currency swings.
Net profit was ZAR286.8 million (approximately US$17.5 million), or ZAR9.28 per share, compared with ZAR243.6 million, or ZAR7.88 per share, a year earlier. Adjusted EPS, which excludes one-time items such as prior secondary-offering costs, also came in at ZAR9.28, up 12% from ZAR8.28 a year ago but below the ZAR9.55 analysts had expected.
Annualized recurring revenue (ARR), a key measure of predictable future subscription income, rose 19% to ZAR5,708 million, equivalent to US$354 million and up 30% in dollar terms. Cartrack subscribers climbed 18% to about 2.9 million, with a record 94,516 net additions for a second quarter. Karooooo Logistics revenue increased 36% to ZAR189 million, while adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 18% to ZAR675 million.
How the Market Reacted
The market's immediate response was negative. KARO shares closed up 2.9% at $62.10 on the report date but then fell 8.5% to $56.82 in after-hours trading after adjusted earnings came in below Wall Street's forecast. The selloff underscored how much investor sentiment had priced in continued upside, with the stock up about 36% through the close prior to the report. While the revenue beat and accelerating constant-currency subscription growth were well received, the modest EPS miss and the drag from a stronger rand appeared to dominate the reaction, as currency translation continued to pressure reported profitability.
What to Watch Going Forward
KARO enters the second half of fiscal 2027 with momentum in its core Cartrack business. Management noted that constant-currency subscription revenue growth accelerated across all regions, and that Cartrack's 23% growth rate sits in the upper band of its full-year outlook of 18% to 24%.
Investors will want to watch whether that acceleration persists and whether the company can convert subscriber gains into higher earnings per share. The strengthening rand remains a central variable, since it lowers the reported value of revenue generated in most of the countries where Karooooo operates.
Profitability trends also deserve attention. Karooooo has maintained a gross margin around 68%, but prior quarters showed pressure from foreign exchange and higher device-related costs. Sustained margin stability, combined with continued improvement in operating profit, will be key to supporting shareholder returns.
Finally, the company is leaning into artificial intelligence adoption across the organization and expanding its Karooooo Logistics quick-commerce business. How these initiatives contribute to recurring revenue and free cash flow over the coming quarters will help shape the next leg of the story. From what I see, these elements could influence how the stock performs in the months ahead.
Using Tickeron Tools in My Research
I often rely on Tickeron’s AI Screener when evaluating names like KARO. The tool lets me quickly filter for comparable companies in the mobility and software sectors based on technical patterns, fundamentals, and AI-driven signals, helping me spot ideas more efficiently than manual screening alone. It has become a regular part of my workflow for putting individual results into broader industry context without spending hours on data pulls.
Disclaimer
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Financial analyst and market blogger with expertise in equity research, fundamental analysis, and macroeconomic trends. I regularly publish coverage on individual stocks, ETFs, and sector developments — combining rigorous financial analysis with clear, engaging writing for a broad investment audience.
KARO in downward trend: 10-day moving average moved below 50-day moving average on September 29, 2026
The 10-day moving average for KARO crossed bearishly below the 50-day moving average on September 29, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 14 of 16 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 88%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 55 of 65 cases where KARO's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 85%.
KARO moved below its 50-day moving average on September 22, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KARO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 64%.
KARO broke above its upper Bollinger Band on October 15, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for KARO entered a downward trend on October 05, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where KARO's RSI Oscillator exited the oversold zone, 13 of 16 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 81%.
The Momentum Indicator moved above the 0 level on October 12, 2026. You may want to consider a long position or call options on KARO as a result. In 93 of 114 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 82%.
The Moving Average Convergence Divergence (MACD) for KARO just turned positive on October 15, 2026. Looking at past instances where KARO's MACD turned positive, the stock continued to rise in 44 of 54 cases over the following month. The odds of a continued upward trend are 81%.
Following a +1.30% 3-day Advance, the price is estimated to grow further. Considering data from situations where KARO advanced for three days, in 223 of 273 cases, the price rose further within the following month. The odds of a continued upward trend are 82%.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 15 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.535) is normal, around the industry mean (-0.260). P/E Ratio (1.873) is within average values for comparable stocks, (14.431). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.824). Dividend Yield (0.097) settles around the average of (0.073) among similar stocks. P/S Ratio (5.882) is also within normal values, averaging (71.128).
The Tickeron Profit vs. Risk Rating rating for this company is 24 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock better than average.
The Tickeron SMR rating for this company is 34 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 48 (best 1 - 100 worst), indicating steady price growth. KARO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 96 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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