KARO Should I Buy
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Karooooo Ltd (KARO) is not a strong buy at the moment for a beginner investor with a long-term strategy and $50,000-$100,000 to invest. While the company demonstrates solid financial growth and positive analyst sentiment, the current technical indicators suggest a bearish trend, and there are no immediate positive catalysts or proprietary trading signals to support a buy decision. It would be prudent to wait for a more favorable entry point.
The technical indicators for KARO are bearish. The MACD is negatively expanding, the RSI is neutral but leaning towards oversold, and the moving averages indicate a downward trend (SMA_200 > SMA_20 > SMA_5). The stock is trading below key support levels, with a pivot at 48.46 and current price at 44.38, suggesting further downside potential.
The company has shown strong financial performance in Q3 2026, with revenue up 21.60% YoY, net income up 11.31% YoY, and EPS up 11.33% YoY. Analysts have a positive outlook, citing mid-teens growth potential driven by underpenetrated markets and new product offerings.
The stock has experienced a significant regular market decline of -4.74%, and technical indicators suggest a bearish trend. Additionally, there is no recent news or event-driven catalysts to support a near-term recovery.
In Q3 2026, Karooooo Ltd reported strong financial growth: Revenue increased by 21.60% YoY to 1,409,830,000, net income rose by 11.31% YoY to 264,109,000, and EPS grew by 11.33% YoY to 8.55. However, gross margin slightly declined by -0.37% YoY to 69.43.
Analysts have a positive view of KARO, with Roth Capital initiating coverage with a Buy rating and a $62 price target, citing strong growth potential in underpenetrated markets. Freedom Capital also maintains a Buy rating with a slightly lowered price target of $61, noting strong Q3 metrics despite some margin pressure.
