Karooooo .(US:KARO) ZACKS·2026-01-23 18:01Core Viewpoint - Karooooo Ltd. (KARO) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on an upward trend in earnings estimates, which significantly influences stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is effective for individual investors as it reflects changes in earnings estimates, which are strongly correlated with near-term stock price movements [2][3]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Business Improvement Indicators - The rising earnings estimates and the Zacks rating upgrade suggest an improvement in Karooooo's underlying business, which could lead to higher stock prices as investors respond positively [4]. Importance of Earnings Estimate Revisions - Research indicates a strong correlation between earnings estimate revisions and stock movements, making it beneficial for investors to track these revisions for investment decisions [5]. - The Zacks Rank system effectively leverages earnings estimate revisions to classify stocks, enhancing its utility for investors [6]. Specific Earnings Estimates for Karooooo - For the fiscal year ending February 2026, Karooooo is expected to earn $1.87 per share, with a 7.8% increase in the Zacks Consensus Estimate over the past three months [7]. Zacks Rating System Overview - The Zacks rating system maintains a balanced distribution of ratings, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [8][9]. - Karooooo's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [9].