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Why Impinj Stock Surged Again Today

By Timothy Green – Updated May 9, 2018 at 12:29PM

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The company's latest quarterly report was good enough to drive two days of strong gains.

What happened

Shares of radio-frequency identification solutions provider Impinj (PI -0.71%) surged on Wednesday, its second day of gains following its first-quarter report. The company's results were mixed, but better-than-expected guidance and optimistic comments from management have lit a fire under the stock. Impinj stock was up about 13.4% at 11:05 a.m. EDT. This adds to an even bigger gain on Tuesday.

So what

Impinj reported first-quarter revenue of $25.1 million and a non-GAAP loss of $0.38 per share. Revenue was about $1 million above analyst expectations, while earnings missed by $0.01. An ongoing inventory correction at Impinj's partners has led to the consumption of the company's IC endpoints outpacing sales, pushing revenue down nearly 21% year over year.

A rising stock chart.

Image source: Getty Images.

Impinj believes this inventory correction will be mostly resolved in the first half of this year, and CEO Chris Diorio said the company is on track to make the first half the turning point for the business. Impinj expects full-year IC endpoint consumption to grow by 15% to 20%.

For the second quarter, Impinj sees revenue between $25 million and $27 million, along with a non-GAAP EPS loss between $0.30 and $0.38. The revenue guidance is ahead of the average analyst estimate of $24.38 million.

Now what

Impinj's management is confident that things will normalize later this year as the inventory issues are worked through. The market is eating up that story, driving the stock much higher on Tuesday and Wednesday. Shares of Impinj are still down around 66% from their all-time high reached in mid-2017, but some optimism is starting to return to the stock.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool recommends Impinj. The Motley Fool has a disclosure policy.

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