Karooooo .(US:KARO) Yahoo Finance·2025-10-15 20:52Core Insights - Karooooo Limited's shares fell by 16.5% following disappointing profit results despite strong revenue growth [1][2] - The company reported a 21% increase in revenue for fiscal Q2 2026, but adjusted non-GAAP earnings per share only rose by 13% to ZAR 8.28 ($0.48) [3] - Gross margin decreased by three percentage points to 72%, contributing to the earnings shortfall [4] Revenue and Growth - Annualized recurring revenue (ARR) growth accelerated to 20% in Q2, up from 17% in fiscal 2025, 15% in fiscal 2024, and 13% in fiscal 2023 [5] - Management is focusing on growth opportunities, particularly in Southeast Asia, potentially sacrificing current profitability for market share gains [6] Business Valuation - Despite the stock decline, Karooooo is considered an attractive business, exceeding the software rule of 40, with its Cartrack segment achieving 20% growth and 46% EBITDA margins [8] - The sell-off may present a buying opportunity for investors interested in the telematics sector [9]