What happened

Shares of radio frequency identification solutions provider Impinj (NASDAQ:PI) surged 13.4% on Tuesday despite no company-specific news. This comes one week after a similar double-digit move higher, and about one month after a better-than-expected first-quarter report.

So what

Shares of Impinj began to crater in mid-2017 as revenue growth slowed. The company was reporting year-over-year growth in excess of 40% as recently as the first quarter of 2017. By the third quarter, growth had slowed down to about 5%. Revenue then tumbled by more than 20% in both the fourth quarter and the first quarter of 2018.

A rising stock chart.

Image source: Getty Images.

Investors didn't take kindly to this abrupt change of pace. The stock bottomed out just below $10 per share earlier this year, down from a 52-week high of just over $60 per share. That steep decline may have been a little too steep -- the stock has now doubled from that low following Tuesday's gain.

Impinj's first-quarter results weren't good on an absolute basis. Revenue crashed, losses exploded, and guidance called for more of the same in the second quarter. But management sounded optimistic, saying the situation would improve in the second half of the year as the ongoing inventory correction at the company's partners worked itself out. That was enough good news to cause the stock to bounce from its lows.

Now what

Impinj needs to convince investors that there aren't deeper problems at the company. Management expects endpoint IC consumption to grow by 15% to 20% this year, with actual sales lagging thanks to the inventory correction. But that growth rate is much slower than the kind of growth Impinj was generating in the not-too-distant past. If the company settles into a slower pace of growth, getting back to that 52-week high might take a long time.