We feel now is a pretty good time to analyse PowerFleet, Inc.'s (NASDAQ:PWFL) business as it appears the company may be on the cusp of a considerable accomplishment. PowerFleet, Inc. provides wireless Internet-of-Things and machine-to-machine solutions in the United States, Israel, and internationally. The US$222m market-cap company posted a loss in its most recent financial year of US$14m and a latest trailing-twelve-month loss of US$14m 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. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for PowerFleet

According to the 4 industry analysts covering PowerFleet, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$9.9m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. 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 109% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of PowerFleet's upcoming projects, but, keep in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 17% 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:

There are key fundamentals of PowerFleet which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at PowerFleet, take a look at PowerFleet's company page on Simply Wall St. We've also put together a list of key aspects you should further examine:

1. Historical Track Record: What has PowerFleet's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

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.

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.

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