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Why Impinj, Inc. Stock Surged 24% in April

By Bradley Seth McNew – May 8, 2017 at 9:15AM

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The stock has nearly tripled in less than a year on the market.

What happened

Shares of Seattle-based technology company Impinj, Inc. (PI -1.59%) surged throughout April, climbing nearly 24% during the month, according to data from S&P Global Market Intelligence. Impinj went public last July at $14 per share, and the stock has grown to nearly three times that IPO price in less than one year. 

So what

Shares of Impinj actually took a sizable cut in February after the market balked at the company's fourth-quarter and full-year earnings. In those earnings, it showed how powerful its RFID item-tracking platform has been on the market, with revenue for the full year up 43% over 2015. However, the strong performance wasn't enough to sustain the stock's surging momentum.  

A microchip lit up on a top of a blue background.

Image source: Getty Images. 

That slowdown in momentum picked back up throughout April in anticipation of a strong first quarter that helped to garner a higher market valuation yet again. Those results were announced on May 5, which subsequently did beat the company's previously set estimates with revenue surging 47% year over year and a narrower-than-expected loss of ($0.11) per share. With the help from the strong first-quarter performance, shares are now up around 16% so far in 2017. 

Now what

Can Impinj keep that growth up? The first-quarter results were certainly encouraging. However, the company warned that its second-quarter revenue would start to grow slightly slower. Looking ahead, Impinj is expected to report positive earnings for the full year, but the stock is currently trading at around 78 times expected next year's earnings. That looks expensive -- but if the company can hold up even a fraction of its current growth over the next few years, its stock could still be in the early stages of its growth potential.

Seth McNew has no position in any stocks mentioned. The Motley Fool recommends Impinj. The Motley Fool has a disclosure policy.

Stocks Mentioned

Impinj Stock Quote
$119.61 (-1.59%) $-1.93

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