Karooooo Stock Drops After Mixed Earnings Report
Shares of Karooooo (KARO) fell nearly 9% in early trading on October 20, 2026, after the IoT and logistics company reported mixed financial results for its fiscal second quarter. Revenue rose to $101.8 million, driven by strong performance from both Cartrack fleet telematics ($90 million revenue) and Karooooo logistics segments ($11.8 million). Subscription revenue also climbed 31% year-over-year to $88 million. Despite these gains, the stock declined as earnings per share (EPS) of $0.58 came in below Wall Street expectations. The company explained that it had made a strategic decision to purchase inventory ahead of anticipated price increases for vehicle-tracking devices and memory chips, which temporarily hurt profitability but are expected to reduce costs long-term. Karooooo's stock is currently trading at 25 times forward earnings, suggesting potential value despite the short-term sell-off. The company reported an ARR retention rate of 95% and a gross margin of nearly 68%, indicating strong operational performance.
Tickers: $KARO
Topics: operating_profit revenue_growth stock_performance
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