We feel now is a pretty good time to analyse PowerFleet, Inc.'s (NASDAQ:AIOT) business as it appears the company may be on the cusp of a considerable accomplishment. PowerFleet, Inc. provides artificial intelligence-of-things (AIoT) solutions in North America, Israel, Africa, Europe, the Middle East, Australia, and internationally. With the latest financial year loss of US$51m and a trailing-twelve-month loss of US$30m, the US$482m market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which PowerFleet will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

According to the 7 industry analysts covering PowerFleet, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$8.8m in 2027. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 128% year-on-year, on average, 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, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with PowerFleet is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in PowerFleet's case is 57%. A higher level of debt requires more stringent capital management which increases 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 put together a list of relevant factors you should further research:

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. 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.