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Why Inseego Stock Jumped Today

By Jeremy Bowman – Apr 22, 2020 at 4:31PM

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Shares of the 5G specialist gained as demand for its products has surged during the coronavirus crisis.

What happened

Shares of Inseego (INSG 5.80%) gained today after CEO Dan Mondor said Tuesday night on CNBC's Mad Money that the 5G pioneer was seeing strong demand for its mobile connectivity products due to Americans working from home under stay-at-home orders.

The stock closed Wednesday's session up 10.3%.

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Image source: Getty Images

So what

Shares of Inseego have been rallying since hitting a bottom in March as investors began to spy it as a beneficiary of more people working and being schooled at home. 

The company said earlier this month that it was seeing unprecedented demand as Americans, including some of the 25 million who don't have access to broadband internet, sought mobile connectivity solutions as they worked from home. The company said it had already doubled production to meet the surge in demand for its 4G and 5G mobile hot spots, among other products. 

It also said first-quarter results would top its prior guidance, adding that first-quarter revenue would exceed the analyst consensus at $52 million and that it saw second-quarter revenue of $75 million to $85 million, equal to 43% growth at the midpoint. Analysts are also bullish that the company will see strong growth for the duration of the year.

Mondor did not reveal any new information on the CNBC show, but his interview may have helped lift investor interest and awareness in the stock, leading to today's bump, which also came amid strong gains in the broad market.

Now what

Before the recent surge that resulted from the stay-at-home orders, Inseego was a slow-growth company. In fact, revenue declined in the fourth quarter of 2019, and only rose by single digits in 2019. Investors have been intrigued by the stock for its position in the "5G revolution," and the momentum it's seeing during the COVID-19 crisis could help carry the stock until the 5G rollout spreads later this year.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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