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Why Impinj, Inc. Stock Dropped 20% in February

By Jeremy Bowman - Mar 3, 2017 at 10:00AM

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The RFID chip-maker's stock tumbled on weak guidance in its earnings report.

What happened

Shares of Impinj, inc. (PI 0.61%) got hammered last month after the radio frequency ID chip-maker turned in a disappointing earnings report. The stock slipped 19.5% according to data from S&P Global Market Intelligence. As the chart below shows, much of those losses came immediately after its earnings report on February 16.

PI Chart

PI data by YCharts

So what

Impinj actually beat estimates in its fourth-quarter report. The company saw its top-line expand 49% to $33.7 million, beating estimates at $32.4 million. Earnings for the internet-of-things play, meanwhile, increased from $0.07 to $0.11 a share, which topped expectations at $0.09. 

A forklift moving boxes on a pallet

Image source: Impinj.

The maker of RAIN RFID chips, which helps supply chains frictionlessly track items, has been highly volatile since its July 2016 IPO.

CEO Chris Diorio called the fourth quarter "a strong close to a landmark and transformational year for Impinj" as revenue growth accelerated in the fourth quarter and IC (integrated circuit) volume growth hit 70%.

Now what

Looking ahead to 2017, the market seemed to be disappointed by Impinj's guidance for the first quarter. The company projected revenue of $30-$31.5 million for the current period and adjusted earnings per share ranging between a loss of $0.06 and a profit of a penny. At the time of the announcement, analysts had expected a profit of $0.02 a share.

Weak guidance like this has a tendency to sink high-flying tech stocks like Impinj, but investors should me mindful that this a young company with a promising future ahead of it. Investors should remember to look past a single quarter's guidance.


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