Fact based stock research
Karooooo (NasdaqCM:KARO)

SGXZ19450089

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Karooooo stock research in summary

karooooo.com

ANALYSIS: With an Obermatt Combined Rank of 52 (better than 52% compared with investment alternatives), Karooooo (Application Software, Singapore) shares have above-average financial characteristics compared with similar stocks. Shares of Karooooo are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives), and are riskily financed (Safety Rank of 48, which means above-average debt burdens) but show above-average growth (Growth Rank of 71). ...read more

RECOMMENDATION: A Combined Rank of 52, is a buy recommendation based on Karooooo's financial characteristics. As the company Karooooo shows low value with an Obermatt Value Rank of 39 (61% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 71% of comparable companies (Obermatt Growth Rank is 71). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 48 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Karooooo, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	39
Growth Rank	71
Safety Rank	48
Combined Rank	52

Country	Singapore
Industry	Application Software
Index	NASDAQ
Size class	Small

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Karooooo

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	57	56	39
GROWTH
GROWTH	n/a	67	63	71
SAFETY
SAFETY	n/a	17	57	48
SENTIMENT
SENTIMENT	n/a	100	98	^new
360° VIEW
360° VIEW	n/a	81	91	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 31-Aug-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Karooooo is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	57	56	39
GROWTH
GROWTH	n/a	67	63	71
SAFETY
SAFETY	n/a	17	57	48
COMBINED
COMBINED	n/a	44	80	52

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Karooooo the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Karooooo shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Karooooo. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 86% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 17 which means that the stock price compared with what market professionals expect for future profits is higher than 83% of comparable companies, indicating a low value concerning Karooooo's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 42 which means that the stock price compared with what market professionals expect for future profit levels is higher than 58% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 17 is also low. Compared with invested capital, the stock price is higher than for 83% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Karooooo's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Karooooo? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Karooooo only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	n/a	36	36	17
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	n/a	51	65	42
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	n/a	21	26	17
DIVIDEND YIELD
DIVIDEND YIELD	n/a	88	100	86
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	n/a	57	56	39

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Karooooo; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), Karooooo shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Karooooo. Sales Growth has a rank of 56 which means that currently professionals expect the company to grow more than 56% of its competitors. Stock Returns are also above average with a rank of 83. But Capital Growth has only a rank of 49, which means that currently professionals expect the company to grow its invested capital less than 51% of its competitors. Profit Growth is also low, with a rank of only 46, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 83% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	n/a	51	38	56
PROFIT GROWTH
PROFIT GROWTH	n/a	66	52	46
CAPITAL GROWTH
CAPITAL GROWTH	n/a	67	64	49
STOCK RETURNS
STOCK RETURNS	n/a	53	55	83
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	n/a	67	63	71

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Karooooo.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 48 (better than 48% compared with alternatives), the company Karooooo has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Karooooo is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Karooooo. Leverage is at a rank of 60, meaning the company has a below-average debt-to-equity ratio. It has less debt than 60% of its competitors. Liquidity is also good at a rank of 65, meaning the company generates more profit to service its debt than 65% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 15, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 85% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 48 (worse than 52% compared with alternatives), Karooooo has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Karooooo. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Karooooo and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	n/a	7	78	60
REFINANCING
REFINANCING	n/a	22	18	15
LIQUIDITY
LIQUIDITY	n/a	63	73	65
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	n/a	17	57	48

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Karooooo and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	100	85	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	100	100	^new
MARKET PULSE
MARKET PULSE	n/a	83	93	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	100	98	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Karooooo.
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