PowerFleet (PWFL) Reports Third-Quarter Loss, Beating Revenue Estimates

PowerFleet (PWFL) came out with a quarterly loss of $0.06 per share versus the Zacks Consensus Estimate of a loss of $0.04. That compares with a profit of $0.04 per share a year ago. The figure is adjusted for one-time items.

This quarterly report represents an earnings surprise of -50%. A quarter ago, it was expected that this maker of tracking and communication technology for fleet vehicles would post a loss of $0.09 per share when it actually produced a loss of $0.13, representing a surprise of -44.44%.

The company has failed to beat consensus earnings per share estimates over the past four quarters.

PowerFleet, which belongs to the Zacks Transportation – Services industry, posted revenues of $27.60 million for the quarter ended September 2020, surpassing the Zacks Consensus Estimate by 3.44%. This compares to revenues of $16.88 million a year earlier. The company has surpassed the consensus revenue estimate four times over the last four quarters.

The sustainability of current share price movements based on recently released data and future earnings expectations will depend primarily on management’s commentary following the earnings conference call.

PowerFleet shares have lost about 7.5% since the beginning of the year, while the S&P 500 has gained 8.6%.

What’s next for PowerFleet?

While PowerFleet stock has been a bit of a downer this year, investors are wondering: What’s next for this stock?

There are no easy answers to this key question, but one reliable indicator that can help investors address this is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revisions trend for PowerFleet was unfavorable. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. As such, the stock is expected to underperform the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the upcoming quarters and current fiscal year change in the coming days. The current consensus EPS estimate is a breakeven of $30.61 million in revenue for the coming quarter and -$0.20 on $113.82 million in revenue for the current fiscal year.

Investors should be aware that the outlook for the industry can also have a significant impact on stock performance. In terms of the Zacks Industry Rank, Transportation – Services currently ranks in the top 48% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

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