Is Karooooo Ltd. overvalued or undervalued?

As of 7 July 2025, the valuation grade for Karooooo Ltd. has moved from fair to attractive, indicating a positive shift in its perceived value. The company appears to be undervalued, supported by a P/E ratio of 34, which is lower than the peer average of 30.12, and a PEG ratio of 1.00, suggesting that its growth prospects are fairly priced relative to its earnings. Additionally, the EV to EBITDA ratio stands at 16.34, which is competitive when compared to peers like HealthStream, Inc. with an EV to EBITDA of 11.66.
In terms of peer comparison, Karooooo Ltd. shows a stronger valuation profile than risky peers such as Planet Labs PBC and Couchbase, Inc., which have significantly negative P/E ratios. The company's recent stock performance has also outpaced the S&P 500, with a year-to-date return of 24.63% compared to the index's 12.22%, reinforcing the attractiveness of its valuation.