Is Karooooo Ltd. overvalued or undervalued?

As of 19 September 2025, the valuation grade for Karooooo Ltd. has moved from attractive to fair, indicating a shift in its perceived value. Based on the current metrics, the company appears to be fairly valued. Key ratios include a P/E ratio of 34, an EV to EBITDA of 16.34, and a PEG ratio of 1.00, which suggest that while the company is performing well, it may not present a significant discount relative to its earnings growth.
In comparison to its peers, Karooooo Ltd. has a P/E ratio of 30.12, which is lower than HealthStream, Inc. at 40.94, but significantly higher than the risky peers like Planet Labs PBC and Couchbase, Inc. This indicates that while Karooooo is positioned better than some peers, it still faces competition from companies with lower valuations. Additionally, Karooooo's stock has outperformed the S&P 500 across multiple periods, with a 1-year return of 41.68% compared to the S&P 500's 16.64%, reinforcing its strong market performance.