Is It Too Late To Consider Karooooo (KARO) After Its Strong Share Price Run?

Simply Wall St.01-27

After a strong run, you might be wondering whether Karooooo is still reasonably priced or starting to look stretched at current levels. The stock last closed at US$50.84, with returns of 8.6% over the...

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The stock last closed at US$50.84, with returns of 8.6% over the...</p>\n\n<a href=\"https://simplywall.st/stocks/us/software/nasdaq-karo/karooooo/news/is-it-too-late-to-consider-karooooo-karo-after-its-strong-sh\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is It Too Late To Consider Karooooo (KARO) After Its Strong Share Price Run?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs It Too Late To Consider Karooooo (KARO) After Its Strong Share Price Run?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-01-27 11:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/software/nasdaq-karo/karooooo/news/is-it-too-late-to-consider-karooooo-karo-after-its-strong-sh><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>After a strong run, you might be wondering whether Karooooo is still reasonably priced or starting to look stretched at current levels. The stock last closed at US$50.84, with returns of 8.6% over the...</p>\n\n<a href=\"https://simplywall.st/stocks/us/software/nasdaq-karo/karooooo/news/is-it-too-late-to-consider-karooooo-karo-after-its-strong-sh\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"KARO","symbol_name":"Karooooo Ltd.","start_time":0,"source_url":"https://simplywall.st/stocks/us/software/nasdaq-karo/karooooo/news/is-it-too-late-to-consider-karooooo-karo-after-its-strong-sh","article_id":"2606270590","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/8041000-choice2-main-header/1585186556238"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/software/nasdaq-karo/karooooo/news/is-it-too-late-to-consider-karooooo-karo-after-its-strong-sh","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2606270590","pubTimestamp":1769484944,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"After a strong run, you might be wondering whether Karooooo is still reasonably priced or starting to look stretched at current levels.\nThe stock last closed at US$50.84, with returns of 8.6% over the past week, 7.3% over the last month, 13.8% year to date, and 19.6% over the past year. This puts recent price action front and center for anyone thinking about value.\nOver the past three years, Karooooo has delivered a total return of 122.8%, which gives useful context to the shorter term moves...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"KARO":"Karooooo Ltd.","BK4023":"应用软件","BK4539":"次新股","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc"},"translate_title":"在Karoooooo(KARO)股价强劲上涨之后，现在考虑它是否为时已晚？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DCF":1,"KARO":1.5},"content_text":"After a strong run, you might be wondering whether Karooooo is still reasonably priced or starting to look stretched at current levels. The stock last closed at US$50.84, with returns of 8.6% over the past week, 7.3% over the last month, 13.8% year to date, and 19.6% over the past year. This puts recent price action front and center for anyone thinking about value. Over the past three years, Karooooo has delivered a total return of 122.8%, which gives useful context to the shorter term moves investors are watching now. This track record is one reason many readers are asking whether the current share price fairly reflects what the business offers. On our valuation checks, Karooooo scores 4 out of 6. This suggests that several metrics point to the shares being undervalued, while others are more finely balanced. Next, we will walk through the key valuation approaches before finishing with a practical way to interpret these signals as an investor. Karooooo delivered 19.6% returns over the last year. See how this stacks up to the rest of the Software industry. AdvertisementApproach 1: Karooooo Discounted Cash Flow (DCF) Analysis A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and then discounting those cash flows back to today. For Karooooo, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in ZAR. The latest twelve month free cash flow stands at ZAR717.33 million. Analyst inputs and extrapolated estimates suggest free cash flow reaching ZAR1,220.00 million in 2030, with intermediate years between 2026 and 2035 also projected and then discounted back to present value. When all those projected and discounted cash flows are added together, the model arrives at an estimated intrinsic value of US$50.50 per share. Against the recent share price of US$50.84, this implies the stock is around 0.7% overvalued, effectively right on top of the DCF estimate. In practical terms, the DCF points to Karooooo trading very close to what this model suggests as fair value. Result: ABOUT RIGHT Karooooo is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. KARO Discounted Cash Flow as at Jan 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Karooooo. Approach 2: Karooooo Price vs Earnings For a profitable business like Karooooo, the P/E ratio is a useful way to think about value because it links what you pay directly to the earnings the company is generating today. Higher expected growth and lower perceived risk can justify a higher P/E, while more uncertainty or slower expected growth usually calls for a lower, more conservative multiple. Karooooo currently trades on a P/E of 24.63x. That sits below both the Software industry average of 30.76x and the peer average of 31.67x. On its own this might suggest the shares trade at a discount to similar companies. However, simple comparisons like this do not adjust for the company’s specific growth profile, profitability, size and risk. Simply Wall St’s Fair Ratio for Karooooo is 26.31x. This proprietary metric estimates what a reasonable P/E could be, given factors such as earnings growth, profit margins, industry, market cap and risk characteristics. Because it is tailored to the company, it can be more informative than a broad industry or peer comparison. With the actual P/E of 24.63x sitting below the Fair Ratio of 26.31x, this approach points to the shares being undervalued on an earnings basis. Result: UNDERVALUED NasdaqCM:KARO P/E Ratio as at Jan 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1424 companies where insiders are betting big on explosive growth. Upgrade Your Decision Making: Choose your Karooooo Narrative Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your own story about Karooooo linked to your assumptions for future revenue, earnings, margins and a fair value that all sit on top of the hard numbers. A Narrative connects three pieces in one place: the business story you believe, the financial forecast that follows from that story, and the fair value estimate that forecast implies. On Simply Wall St, used by millions of investors, you can create and compare these Narratives on the Community page. You can then see at a glance how each investor’s fair value compares with Karooooo’s current share price to help them decide whether it might be a time to buy, hold, or sell based on their own view. Because Narratives are updated when new information such as earnings releases or major news is added, they can quickly reflect changing views. For example, one Karooooo Narrative might assume relatively conservative revenue growth and margins that support a lower fair value, while another assumes stronger revenue growth and higher margins that support a higher fair value. Do you think there's more to the story for Karooooo? Head over to our Community to see what others are saying! NasdaqCM:KARO 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if Karooooo might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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