Financial Data and Key Metrics Changes - In Q1 FY26, total revenue increased by 18% to 1,277 million ZAR, with subscription revenue also rising by 18% to 1,141 million ZAR [11][28] - Annual recurring revenue (ARR) grew by 18% to 4,574 million ZAR, and on a U.S. Dollar basis, it increased by 24% to $254 million [5][13] - Earnings per share (EPS) rose by 19% to 8.55 ZAR [15][33] - The company maintained a strong balance sheet with net cash and cash equivalents of 1,103 million ZAR [16][34] Business Line Data and Key Metrics Changes - Kartrak, the operations management SaaS platform, generated subscription revenue of 1,100 million ZAR, an increase of 19% [7][29] - Karoo Logistics, the delivery as a service offering, reported revenue of 121 million ZAR, up 20% [10][22] - Kartrak's operating profit margin remained stable at 30% despite increased investments in sales capacity [11][15] Market Data and Key Metrics Changes - South Africa's subscription revenue growth accelerated to 16%, contributing 70% of total subscription revenue [17][21] - Southeast Asia and the Middle East saw subscriber growth accelerate to 22%, with subscription revenue growth reaching 30% [18][19] - European subscription revenue growth accelerated to 22%, now accounting for 10% of total subscription revenue [20][21] Company Strategy and Development Direction - The company aims to strengthen its leadership position in South Africa while expanding its distribution footprint in Asia and Europe [23][24] - A disciplined capital allocation strategy prioritizes organic growth and innovation, with a focus on returning capital to shareholders when growth opportunities are limited [25][26] - The company is committed to maintaining a strong financial profile while pursuing profitable growth opportunities in underpenetrated markets [4][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory for both consumer and commercial customers in South Africa [41] - The company does not foresee significant impacts from U.S. tariffs on its Southeast Asia operations, attributing growth to local market dynamics [41] - Management reaffirmed the FY26 growth outlook, emphasizing the importance of strategic investments in sales and marketing [35][36] Other Important Information - The company reported a healthy subscription gross margin of 74% and a customer retention rate of 95% [16][28] - Free cash flow generation resumed, benefiting from disciplined working capital management [33][34] Q&A Session Summary Question: Subscriber growth trajectory in South Africa - Management noted strong traction in both commercial and consumer customer growth, expecting this trend to continue [41] Question: Impact of U.S. tariffs on Southeast Asia subscriber growth - Management believes that local economic growth is driving subscriber growth, not U.S. tariffs [41] Question: Cross-selling initiatives and their impact on ARR and ARPU - Management aims for a 6% increase in ARPU this year, with good progress made in Q1 [43] Question: Expansion strategy in Southeast Asia versus Africa - Management indicated that the market opportunity in Southeast Asia is larger than in Africa, driving the expansion strategy [44] Question: Mix between subscriber growth and cross-selling initiatives - Management reported a 2% uplift from cross-selling, with expectations for further increases as initiatives gain momentum [45] Question: Hiring capacity plans and their impact on subscription growth - Management expects a correlation between increased sales staff and subscriber growth, targeting a 28% increase in subscriber growth with a 70% increase in sales staff [47] Question: Contract performance rollout in South Africa - Management highlighted significant progress with the contract tag, viewing it as a game changer in the marketplace [52]

Financial Highlights - Karooooo's Annual Recurring Revenue (ARR) increased by 18% year-over-year to ZAR 4,574 million[21,44] - In USD terms, ARR growth accelerated to 24% year-over-year reaching USD 254 million[21,44] - Cartrack subscription revenue grew by 19% year-over-year in ZAR[29,45] - Cartrack subscription revenue grew by 24% year-over-year in USD[29,45] - Karooooo's Earnings Per Share (EPS) increased by 19% year-over-year to ZAR 855[33,46] Subscriber Growth - Cartrack subscribers increased by 17% year-over-year reaching approximately 24 million[19,21,45] - Asia subscriber growth accelerated to 22% year-over-year[45,51] - Net subscriber additions of 84K were a record for Q1[45,72] Regional Performance - South Africa's Cartrack subscriber growth was 16% year-over-year[50] - Southeast Asia's Cartrack subscriber growth was 22% year-over-year[51] - Europe's Cartrack subscriber growth was 20% year-over-year[52] Karooooo Logistics (Delivery-as-a-Service) - Karooooo Logistics delivered revenue of ZAR 121 million in Q1 2026, a 20% year-over-year increase[29,54,55] - Karooooo Logistics delivered an 8% operating profit margin in Q1 2026[29,54]

Group 1: Earnings Performance - Karooooo Ltd. reported quarterly earnings of $0.47 per share, exceeding the Zacks Consensus Estimate of $0.45 per share, and up from $0.39 per share a year ago, representing an earnings surprise of +4.44% [1] - Over the last four quarters, the company has surpassed consensus EPS estimates four times [2] - The company posted revenues of $69.85 million for the quarter ended May 2025, which missed the Zacks Consensus Estimate by 2.26%, compared to year-ago revenues of $58.29 million [2] Group 2: Stock Performance and Outlook - Karooooo shares have increased approximately 12.6% since the beginning of the year, outperforming the S&P 500's gain of 7.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.45 on revenues of $73.4 million, and for the current fiscal year, it is $1.87 on revenues of $301.03 million [7] Group 3: Industry Context - The Internet - Software industry, to which Karooooo belongs, is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The Zacks Rank for Karooooo is currently 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [6]

Core Insights - Karooooo (KARO) is set to report its first-quarter fiscal 2026 results on July 22, with revenue expectations of $71.47 million, reflecting a 22.6% year-over-year increase, and earnings estimated at 45 cents per share, indicating a 15.38% rise from the previous year [1][2]. Group 1: Subscriber Growth and Product Adoption - Strong subscriber momentum from Cartrack in the fourth quarter of fiscal 2025 is anticipated to positively impact both revenue and earnings in the first quarter of fiscal 2026, with net additions of 79,009 subscribers, a 25% increase year-over-year [3]. - The successful launch and uptake of Cartrack-Tag are expected to contribute positively to revenue, with a focus on selling this product and AI video capabilities to existing customers [4]. Group 2: Regional Expansion and Sales Strategy - A planned 70% increase in sales headcount in Southeast Asia is expected to enhance revenue growth, with the region showing a 31% constant currency subscription revenue growth in the previous quarter [5]. - Southeast Asia is identified as a key growth market, being the second-largest contributor to group revenue [5]. Group 3: Operational Efficiency and Financial Metrics - Operational leverage is projected to support earnings growth, with Cartrack reporting a 34% operating profit margin and a 76% subscription gross margin in the previous quarter [6]. - Karooooo Logistics is expected to contribute to top-line growth, building on a 33% year-over-year revenue increase in fiscal 2025, driven by demand for capital-light e-commerce and logistics operations [7]. Group 4: Earnings Expectations - The combination of a positive Earnings ESP of +7.46% and a Zacks Rank of 3 suggests a favorable outlook for KARO's earnings performance [10].

Core Viewpoint - Karooooo Ltd. (KARO) is anticipated to report a year-over-year increase in earnings driven by higher revenues in its upcoming earnings report for the quarter ended May 2025 [1] Earnings Expectations - The consensus estimate for Karooooo's quarterly earnings is $0.45 per share, reflecting a year-over-year increase of 15.4% [3] - Expected revenues are projected to be $71.47 million, which is a 22.6% increase from the same quarter last year [3] Estimate Revisions - The consensus EPS estimate has been revised 4.21% higher in the last 30 days, indicating a positive reassessment by analysts [4] - The Most Accurate Estimate for Karooooo is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +7.46% [12] Historical Performance - In the last reported quarter, Karooooo exceeded the expected earnings of $0.37 per share by delivering $0.44, achieving a surprise of +18.92% [13] - Over the past four quarters, the company has consistently beaten consensus EPS estimates [14] Predictive Indicators - A positive Earnings ESP combined with a Zacks Rank of 1 suggests a high likelihood of Karooooo beating the consensus EPS estimate [12][10] - Stocks with a positive Earnings ESP and a solid Zacks Rank have historically produced positive surprises nearly 70% of the time [10]

Core Insights - In the current economic climate, new analyst coverage is increasingly valuable for investors navigating volatility, with the Federal Reserve maintaining interest rates and signaling potential cuts in 2025, amid rising concerns about stagflation as GDP growth slows to 1.4% and inflation rises to 3% [1][2] Analyst Coverage Importance - New analyst coverage provides timely insights, updated models, and context on how companies may perform amid inflationary pressures, cost volatility, and weakening demand [2][3] - Analysts possess specialized knowledge and expertise, offering critical insights into a company's financial health, growth potential, competitive standing, and industry trends, which are often difficult for individual investors to acquire independently [3][5] - Coverage initiation on a stock typically indicates higher investor interest, as investors believe that the company under coverage holds significant value [4][6] Market Impact of Analyst Coverage - New analyst coverage can lead to immediate stock price volatility, with positive ratings attracting bullish sentiment and driving share prices higher, while neutral or negative ratings may trigger sell-offs [8] - Favorable coverage from multiple analysts can enhance investor confidence, leading to sustained upward momentum in valuation [8][10] Recent Stock Highlights - Recent analyst coverage on Karooooo Ltd. (KARO), OppFi Inc. (OPFI), QXO, Inc. (QXO), and United Fire Group, Inc. (UFCS) reflects analyst confidence despite economic uncertainty, with each stock seeing recent EPS estimate hikes [10] - Karooooo shares have gained 36.4% in the past three months, with a fiscal 2026 EPS estimate increase to $1.87, indicating 14.7% year-over-year growth [14] - OppFi shares have gained 73.2% in the past three months, with a 2025 EPS estimate increase to $1.23, indicating 29.5% year-over-year growth [15] - QXO shares have gained 78% in the past three months, with a 2025 EPS estimate improving to 39 cents from a loss of 12 cents [16] - United Fire Group shares have gained 9.4% in the past three months, with a 2025 EPS estimate increase to $3.50, indicating a 2.4% year-over-year decline [17] Screening Criteria for Stocks - Stocks with increased analyst coverage and improving average ratings are prioritized, with additional parameters including a stock price greater than or equal to $5 and an average daily volume greater than or equal to 100,000 shares [11][12]

Core Insights - Karooooo Ltd. (NASDAQ: KARO) is a relatively small company in the public markets but has established a quality business [1] Company Overview - The analysis begins coverage of Karooooo Ltd., indicating its potential for growth and investment interest [1]

Core Insights - Karooooo Ltd. is positioned to potentially continue its earnings-beat streak in upcoming reports, with a history of exceeding earnings estimates, particularly in the last two quarters, averaging a surprise of 16.04% [1][5] Earnings Performance - In the last reported quarter, Karooooo achieved earnings of $0.44 per share, surpassing the Zacks Consensus Estimate of $0.37 per share, resulting in a surprise of 18.92% [2] - In the previous quarter, the company was expected to report earnings of $0.38 per share but delivered $0.43 per share, yielding a surprise of 13.16% [2] Earnings Estimates and Predictions - Estimates for Karooooo have been trending higher, influenced by its history of earnings surprises, and the stock currently has a positive Zacks Earnings ESP of +7.46%, indicating bullish sentiment among analysts regarding its earnings prospects [5][8] - The combination of a positive Earnings ESP and a Zacks Rank 1 (Strong Buy) suggests a high likelihood of another earnings beat [8] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise, meaning that out of 10 such stocks, approximately seven may exceed consensus estimates [6]

Company Performance - Karooooo Ltd. has returned approximately 4.7% year-to-date, outperforming the average gain of 1.5% in the Computer and Technology sector [4] - The Zacks Consensus Estimate for Karooooo Ltd.'s full-year earnings has increased by 5.5% over the past quarter, indicating a positive earnings outlook [3] - Karooooo Ltd. currently holds a Zacks Rank of 1 (Strong Buy), suggesting strong analyst sentiment [3] Industry Comparison - Karooooo Ltd. is part of the Internet - Software industry, which has an average year-to-date gain of 12.9%, indicating that Karooooo Ltd. is slightly underperforming its industry [6] - In contrast, Allegro MicroSystems, Inc., which is in the Electronics - Semiconductors industry, has a year-to-date return of 42.1% and a Zacks Rank of 2 (Buy) [4][5][7] - The Electronics - Semiconductors industry has gained 6.1% since the beginning of the year, ranking 82 among 45 stocks [7]

Core Viewpoint - Ituran Location and Control Ltd. (NASDAQ: ITRN) has seen a stock increase of 15.29% since the last analysis, with 6G and AI identified as key growth drivers for the company moving forward [1] Group 1 - The company is positioned as a GARP-themed investment, focusing on aggressive growth prospects that are expected to lead to high profitability within 1-2 years [1] - The investment philosophy emphasizes long-term discipline and consistent alpha generation, while also acknowledging the presence of risk [1] - The analysis aims to empower underprivileged individuals and enhance financial literacy [1]