AIOT Stock Forecast & Price Target

PowerFleet Inc has demonstrated strong financial performance, as reflected in a significant gross profit increase of 58.8% to $55.5 million, alongside a consolidated gross margin expansion of 168 basis points YOY to 54.25%. Additionally, the company's adjusted EBITDA reached $21.6 million, marking a 58% year-over-year increase, with an adjusted EBITDA margin improvement of 257 basis points to 20.78%. Furthermore, the company has successfully increased new customer wins by 14% sequentially, highlighting its growing market presence and demand for its IoT solutions.

PowerFleet's adjusted EBITDA growth guidance has been revised downward, indicating expectations of profit recovery are diminishing, as the new forecast ranges from $97.3 million to $104 million, down from the previous range of $103 million to $110 million. Additionally, while the company managed to decrease its net leverage ratio from 3.25x to 2.97x, the overall net debt has increased slightly to $232 million, suggesting a potential struggle with debt management despite efforts to improve financial ratios. Furthermore, despite a reduction in adjusted operating expenses from $57.9 million in Q1/25 to $54.3 million, these declines may not be sufficient to offset concerns regarding revenue growth and sustainability in a competitive market.