Shares of Impinj(NASDAQ: PI) skyrocketed on Thursday. On the heels of an impressive earnings report, the stock traded 27.9% higher at 1:25 p.m. ET, reaching a fresh all-time high.
Impinj's Q1 by the numbers
Your average Wall Street analyst expected Impinj to report adjusted earnings near $0.11 per diluted share in the first quarter, based on top-line revenue around $73.6 million. Instead, the maker of radio frequency ID (RFID) asset-tracking tags and related systems delivered $0.21 of earnings per share on $76.8 million in sales.
Impinj's management set second-quarter guidance targets far ahead of the Street's current consensus projections. The analyst view points to next-quarter earnings of roughly $0.19 per share and sales in the neighborhood of $79 million. The midpoint of the company's official target ranges stop at $0.75 per share and $97 million, respectively.
CEO Chris Diorio highlighted strong RFID tag sales in the apparel and general merchandise portions of the retail sector.
"We see continued strength looking into the second quarter," Diorio said on the earnings call. "Looking further out, we see growing opportunities to drive recurring licensing and services revenue, monetizing our [intellectual property] platform and cloud services."
Measuring the retail market's recovery with RFID tags
Diorio expects the first-quarter strength to translate into a broad surge in RFID demand. In other words, this earnings surprise could be the start of a sustained growth spurt, rather than a unique single-quarter boost.
In turn, robust Impinj results should point to healthier business trends in the retail sector as a whole. Two large customers are accelerating their RFID-tracking installations. Of course, nobody knows exactly what the global economy will look like by the holidays or in 2025, but large retailers are willing to bet big money on an upturn in the foreseeable future.
Should you invest $1,000 in Impinj right now?
Before you buy stock in Impinj, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Impinj wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of April 22, 2024
Anders Bylund has no position in any of the stocks mentioned. The Motley Fool recommends Impinj. The Motley Fool has a disclosure policy.
