Karooooo Ltd. Fundamental Analysis (NASDAQ: KARO)
Karooooo Ltd. (NASDAQ: KARO) shows moderate financial fundamentals with a PE ratio of 32.53, profit margin of 17.76%, and ROE of 31.36%. The company generates $5.8B in annual revenue with moderate year-over-year growth of 8.61%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 66.9/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze KARO's fundamental strength across five key dimensions:
Efficiency Score
ExcellentKARO demonstrates superior asset utilization.
Valuation Score
ModerateKARO shows balanced valuation metrics.
Growth Score
ExcellentKARO delivers strong and consistent growth momentum.
Financial Health Score
ExcellentKARO maintains a strong and stable balance sheet.
Profitability Score
ExcellentKARO achieves industry-leading margins.
Key Financial Metrics
Is KARO Expensive or Cheap?
P/E Ratio
KARO trades at 32.53 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, KARO's PEG of 0.34 indicates potential undervaluation.
Price to Book
The market values Karooooo Ltd. at 9.26 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 13.92 times EBITDA. This signals the market has high growth expectations.
How Well Does KARO Make Money?
Net Profit Margin
For every $100 in sales, Karooooo Ltd. keeps $17.76 as profit after all expenses.
Operating Margin
Core operations generate 25.54 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $31.36 in profit for every $100 of shareholder equity.
ROA
Karooooo Ltd. generates $16.28 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Karooooo Ltd. generates strong operating cash flow of $1.86B, reflecting robust business health.
Free Cash Flow
Karooooo Ltd. generates weak or negative free cash flow of $59.66M, restricting financial flexibility.
FCF Per Share
Each share generates $1.93 in free cash annually.
FCF Yield
KARO converts 0.18% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
32.53
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.34
vs 25 benchmark
P/B Ratio
Price to book value ratio
9.26
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.76
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.30
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.02
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.31
vs 25 benchmark
ROA
Return on assets percentage
0.16
vs 25 benchmark
ROCE
Return on capital employed
0.33
vs 25 benchmark
How KARO Stacks Against Its Sector Peers
| Metric | KARO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 32.53 | 35.44 | Neutral |
| ROE | 31.36% | 697.00% | Weak |
| Net Margin | 17.76% | -137056.00% (disorted) | Strong |
| Debt/Equity | 0.30 | 0.27 | Neutral |
| Current Ratio | 1.02 | 3.42 | Neutral |
| ROA | 16.28% | 257.00% | Weak |
KARO outperforms its industry in 1 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Karooooo Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
63.99%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
121.52%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
44.45%
Industry Style: Growth, Innovation, High Beta
High Growth