On Thursday, Roth/MKM maintained its Buy rating on PowerFleet, Inc (NASDAQ:AIOT) stock with a steady price target of $13.00. The firm's stance follows a recent fireside chat held by AIOT, which took place after the completion of its acquisition of Fleet Complete on October 1. The acquisition is noted for adding significant scale and diversity to PowerFleet's operations, including new customer geographies and channels, as well as complementary products.
The analyst highlighted the acquisition's potential for PowerFleet to enhance its software-as-a-service (SaaS) and annual recurring revenue (ARR) growth. The company is now positioned to potentially accelerate its SaaS/ARR growth from the current mid-single digits to over 20% after FY26. This growth is expected to be driven by key elements such as UNITY, carrier channel partnerships, and AI Camera technology.
The integration of Fleet Complete is anticipated to offer substantial opportunities for PowerFleet to up-sell and cross-sell products within their combined portfolios. This strategic move is aimed at strengthening the company's market position and enhancing its financial performance.
In light of these developments, Roth/MKM has raised its estimates for PowerFleet. The firm's maintained Buy rating indicates a positive outlook on the stock's future performance, based on the expected impact of the Fleet Complete acquisition and the subsequent growth opportunities it presents.
PowerFleet's stock performance and investor sentiment will likely continue to be influenced by the company's ability to leverage these new assets and drive growth in the SaaS and ARR segments, as projected by the analyst.
In other recent news, Powerfleet Inc. has announced a definitive agreement to acquire Fleet Complete, a connected vehicle technology and fleet management company, in a deal valued at $200 million. The acquisition, expected to close on October 1, 2024, aims to bolster Powerfleet's North American market presence and spur growth in Europe and Australia. The combined revenue of both entities is projected to exceed $400 million, with over $300 million anticipated from high-margin recurring SaaS revenue.
Powerfleet also reported a 6% increase in total revenue and gross profit, with adjusted EBITDA rising by 141%. Fourth-quarter revenue reached $34.5 million, largely driven by strong performance in its software-as-a-service (SaaS) sector. Analyst firms Raymond James and Craig-Hallum initiated coverage with an Outperform and Buy rating respectively, following Powerfleet's merger with MiX Telematics (NYSE:MIXT).
The company also appointed Deloitte & Touche as its new independent registered public accounting firm, replacing Ernst & Young. This change was approved by Powerfleet's Audit Committee and was not due to any disagreements on accounting principles or practices. Powerfleet has also announced its inclusion in the Russell 2000® Index and a change of its ticker symbol to AIOT. To support its growth strategy, Powerfleet has welcomed Andrew Martin, a partner at Private Capital Management, to its board of directors. These are among the recent developments for Powerfleet.
InvestingPro Insights
Recent data from InvestingPro provides additional context to PowerFleet's (NASDAQ:AIOT) strategic moves and market position. The company's market capitalization stands at $503.21 million, reflecting its current scale following the Fleet Complete acquisition. PowerFleet's revenue for the last twelve months as of Q1 2025 was $178.3 million, with a notable quarterly revenue growth of 135.04% in Q1 2025, aligning with the analyst's expectations of accelerated growth post-acquisition.
InvestingPro Tips highlight that analysts anticipate sales growth in the current year, supporting Roth/MKM's positive outlook. Additionally, two analysts have revised their earnings upwards for the upcoming period, suggesting growing confidence in PowerFleet's financial trajectory. This optimism is further reflected in the stock's performance, with a one-year price total return of 142.49% as of the latest data.
While PowerFleet is not currently profitable, with an operating income margin of -14.27% over the last twelve months, InvestingPro Tips indicate that analysts predict the company will be profitable this year. This projection aligns with the expected benefits from the Fleet Complete acquisition and the company's focus on SaaS and ARR growth.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide deeper insights into PowerFleet's investment potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.