Is Karooooo Ltd. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Karooooo Ltd. has moved from attractive to very attractive, indicating a strong positive shift in its valuation outlook. The company appears to be undervalued, supported by a P/E ratio of 34, an EV to EBITDA ratio of 16.34, and a PEG ratio of 1.00, which suggests that its growth is reasonably priced relative to its earnings.
In comparison to its peers, HealthStream, Inc. has a higher P/E ratio of 40.95, while Karooooo's P/E is more favorable compared to Planet Labs PBC and Couchbase, Inc., which have negative P/E ratios. Additionally, Karooooo's ROCE of 47.99% and ROE of 31.15% reflect strong profitability metrics. Despite recent underperformance against the S&P 500, with a 1-year return of 12.11% compared to the index's 14.08%, the long-term outlook remains promising given the company's robust financial ratios.