Karooooo’s Q4 Revenue Soars 19% to $88.48M, Price Target Rises to $68
Roth Capital kept its Buy rating on Karooooo and raised its price target to $68 after Q4 revenues hit $88.48 million driven by 19 percent subscription growth at Cartrack. Q4 EPS of $0.44 missed estimates and the company warned of near-term gross margin pressure.
1. Analyst Upgrade and Price Target Increase
Roth Capital maintained its Buy rating on Karooooo and lifted the price target to $68 from $62, reflecting confidence in the company’s trajectory. At the time of the upgrade, the stock was trading around $43.56, signaling substantial upside to the new target.
2. Q4 Revenue and Subscription Growth
Karooooo reported Q4 revenue of $88.48 million, led by a 19 percent increase in subscription revenue at its Cartrack business. The acceleration in recurring revenue underscores growing customer demand for its mobility platform.
3. Earnings Miss and Margin Outlook
The company posted Q4 EPS of $0.44, below consensus estimates of $0.51, driven by elevated device costs and unfavorable foreign exchange rates. Management cautioned that gross margins will face near-term pressure as these cost headwinds persist.
4. ARR and Free Cash Flow Expansion
Annual recurring revenue climbed 18 percent to ZAR 5.18 billion, while adjusted free cash flow surged 90 percent to ZAR 809 million. These metrics highlight strong cash generation and predictability in the company’s subscription-based model.