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When Can We Expect A Profit From PowerFleet, Inc. (NASDAQ:PWFL)?

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Simply Wall St
·3 min read
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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. develops, markets, and sells wireless Internet-of-Things and machine-to-machine solutions in the United States, Israel, and internationally. The US$280m market-cap company announced a latest loss of US$14m on 31 December 2020 for its most recent financial year result. 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

Consensus from 4 of the American Electronic analysts is that PowerFleet is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$6.3m in 2022. Therefore, the company is expected to breakeven just over a year 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 125% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

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 generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 22% 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 too many aspects of PowerFleet to cover in one brief article, but the key fundamentals for the company can all be found in one place – PowerFleet's company page on Simply Wall St. We've also compiled a list of important 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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.