PowerFleet, Inc.'s (NASDAQ:AIOT) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at PowerFleet, Inc.'s (NASDAQ:AIOT) future prospects. PowerFleet, Inc. provides Internet-of-Things solutions in the United States, Israel, and internationally. The US$781m market-cap company posted a loss in its most recent financial year of US$79m and a latest trailing-twelve-month loss of US$90m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on PowerFleet's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for PowerFleet

Consensus from 7 of the American Electronic analysts is that PowerFleet is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$39m in 2026. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 142% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for PowerFleet given that this is a high-level summary, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 32% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on PowerFleet, so if you are interested in understanding the company at a deeper level, take a look at PowerFleet's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Valuation: What is PowerFleet worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether PowerFleet is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on PowerFleet’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.