AIOT Stock Forecast & Price Target

PowerFleet Inc. has demonstrated significant financial growth, reflected in a consolidated gross margin increase of 168 basis points year-over-year, reaching 54.25%, alongside a gross profit rise of 58.8% to $55.5 million. The company experienced a substantial uptick in services revenue, which grew by 57% to $89.3 million, now representing 80% of total revenue, highlighting a strategic shift towards higher-margin recurring services. Additionally, the adjusted EBITDA increased by 58% year-over-year to $21.6 million, further showcasing operational efficiencies and enhanced profitability with an increased adjusted EBITDA margin of 20.78%.

PowerFleet is experiencing deteriorating financial metrics, with a projected decline in adjusted EBITDA growth guidance for FY/26, reducing expectations from a prior range of $103-110 million to $97.3-104 million. Additionally, although the net leverage ratio improved to 2.97x from 3.25x, the company is still burdened by substantial net debt of $232 million, highlighting ongoing financial pressure. The limitations in data integration for customers, as seen in the EverDriven case, exacerbate operational inefficiencies which may hinder long-term value creation and overall financial performance.