Is Karooooo Ltd. overvalued or undervalued?

As of 13 June 2025, the valuation grade for Karooooo Ltd. has moved from fair to attractive, indicating a positive shift in its perceived value. The company is currently considered undervalued based on its strong financial ratios. Notably, Karooooo has a P/E ratio of 34, an EV/EBITDA ratio of 16.34, and a ROCE of 47.99%, which are compelling metrics compared to its peers.
In comparison, Matterport, Inc. has a P/E ratio of -12.17 and an EV/EBITDA of -10.16, while HealthStream, Inc. shows a P/E of 43.74 and an EV/EBITDA of 11.73. These comparisons highlight Karooooo's relatively favorable valuation. Additionally, the company's stock has outperformed the S&P 500 over the past year, returning 42.4% compared to the index's 10.26%, further reinforcing its attractive valuation.