Can Cartrack’s Subscription Growth Power Karooooo’s (KARO) Global Expansion Ambitions?

• Karooooo Ltd. announced its second-quarter results for the period ended August 31, 2025, posting sales of ZAR 1.34 billion and net income of ZAR 243.58 million, both up from the previous year and surpassing analyst expectations.

• A standout highlight from the report was a 20% year-over-year increase in Cartrack’s subscription revenue, underlining the ongoing momentum in its core SaaS business and subscriber growth.

• We will explore how this robust subscription and recurring revenue growth further supports Karooooo’s investment narrative and long-term international expansion plans.

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Karooooo’s investment case centers on its ability to deliver sustainable, recurring revenue growth through a global SaaS platform, while leveraging expansion in Southeast Asia and Europe to reduce dependence on the South African market. The latest quarterly results reinforce the business model’s near-term momentum, but do not meaningfully change the main catalyst, continued international subscriber and ARPU growth, or the primary risk of overexposure to South African economic volatility.

Of the recent announcements, Karooooo’s reaffirmed FY 2026 guidance, highlighting 16% to 21% forecasted Cartrack subscription revenue growth and an operating margin range of 26% to 31%, is most relevant. This update supports the short-term growth narrative but places a spotlight on execution risks tied to achieving targeted international expansion and ARPU uplift.

However, investors should also be aware that a heavy reliance on the South African market continues to present risk if local economic or competitive conditions deteriorate and…

Read the full narrative on Karooooo (it’s free!)

Karooooo’s narrative projects ZAR7.5 billion revenue and ZAR1.5 billion earnings by 2028. This requires 16.5% yearly revenue growth and an increase of ZAR536.5 million in earnings from ZAR963.5 million today.

Uncover how Karooooo’s forecasts yield a $60.44 fair value, a 28% upside to its current price.

Five individual fair value estimates from the Simply Wall St Community place Karooooo’s share value between US$45.48 and US$60.44. Given ongoing efforts to boost international subscription growth, your view on market concentration risk could significantly affect performance expectations, review more investor perspectives to frame your own.

Explore 5 other fair value estimates on Karooooo – why the stock might be worth just $45.48!

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This article by Simply Wall St is general in nature. We provide commentary based on historical data 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 financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include KARO.

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