Shares of RFID manufacturer Impinj (NASDAQ:PI) jumped 11.3% in the morning session after the company reported fourth-quarter results, with revenue and EPS exceeding expectations, driven by "strong endpoint IC volumes." Inventory levels also improved. On the other hand, its operating margin regrettably fell, and its gross margin shrunk. Zooming out, this was still a decent, albeit mixed, quarter, showing that the company is staying on track. After the initial pop the shares cooled down to $109.78, up 3.1% from previous close.
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What is the market telling us:
Impinj's shares are quite volatile and over the last year have had 30 moves greater than 5%. But moves this big are very rare even for Impinj and that is indicating to us that this news had a significant impact on the market's perception of the business.
The previous big move we wrote about was 24 days ago, when the stock gained 10% on the news that the company announced strong preliminary earnings results for the fourth quarter of 2023. Impinj anticipates Q4'2023 revenue to exceed $70 million, surpassing its earlier guidance of $65.5 to $68.5 million, while adjusted EBITDA is projected to exceed $2.5 million, surpassing the previous estimate of ($0.9) to $0.7 million. The better-than-expected results will lead to higher estimates among Wall Street analysts as well as improved optimism among investors. As a reminder, stock prices often follow the direction of forward estimates, so if Wall Street is taking up their numbers based on these results, it's no surprise that the stock is up.
Impinj is up 27.6% since the beginning of the year, but at $109.78 per share it is still trading 22.4% below its 52-week high of $141.40 from April 2023. Investors who bought $1,000 worth of Impinj's shares 5 years ago would now be looking at an investment worth $6,772.
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