Shares of Karooooo (KARO +11.39%) were up 12.8% at 2:30 p.m. ET today, following a strong earnings report. The Singapore-based provider of connected vehicle tools and fleet management systems beat Wall Street's expectations across the board in Q1 2027. And the stock has been trending upward all morning long. Five minutes after I noted the 12.8% gain, Karooooo is up by 13% instead.
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Karooooo's massive Q1 beat
Karooooo's Q1 sales rose 34% year over year while bottom-line earnings jumped 11% higher. The average analyst would have settled for growth rates near 28% and 3%, respectively.
The company's recurring revenues rose by 19%, almost entirely due to strong growth in the Cartrack service's subscriptions. Meanwhile, the newer and smaller Karooooo Logistics division posted a 48% sales jump.
NASDAQ: KARO
Key Data Points
A unique business model for long-term growth
Investors should keep a close eye on Karooooo Logistics, as this high-growth operation only accounted for 13% of total revenues in this report. It's even profitable, showing an 8% operating margin in Q1.
Karooooo stands apart from other fleet management specialists by running a fully integrated system. The company controls every part of the platform, from hardware manufacturing and software development to cloud-based vehicle tracking and AI-powered driving quality analysis. Cartrack and Karooooo Logistics are currently focused on South Africa, but there should be room for international growth in the long run.
Mind you, CEO Zak Calisto didn't even mention international ambitions in the earnings call, so that's a long-term catalyst. But Karooooo is setting share price records for good reason today, and I can't wait to see this growth story develop over the years.
