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Why Inseego Stock Popped Today

By Jeremy Bowman – Jul 28, 2020 at 4:09PM

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A bullish report in Seeking Alpha lifted the stock.

What happened

Shares of Inseego (INSG -2.82%) were rising today after the popular 5G play got a full-throated endorsement in Seeking Alpha. The author of the post, "The Twilight Investor," predicted "blow-out" second-quarter results when the company reports earnings next week.

Though there was no company-specific news out on Inseego, the recommendation in Seeking Alpha was enough to send the stock up 11.3% as of 2:43 p.m. EDT.

A skyline with a grid illustrating internet connectivity overlaid.

Image source: Getty Images.

So what

In a long-form article, "The Twilight Investor" shared plenty of information and bullish predictions to whet investors appetites as it called for "off-the-charts" results in the second half of the year from Inseego. It added that channel checks with wholesalers and retailers are indicating unprecedented demand for Inseego products, which include mobile hotspots for 4G and 5G, as well as modems and routers.

Inseego had been seeing a boost for demand in such devices due to work-from-home needs from the pandemic, which the author notes. With a number of companies now designating work-from-home into 2021, demand for broadband connectivity will remain for the next several months, giving the company a boost in 4G devices as well.

While "The Twilight Investor" is expecting big numbers for the rest of the year, the writer was most bullish about the long-term potential from 5G and called for strong earnings-per-share growth over the next 2-3 years as adoption of the new telecom protocol spreads.

Now what

It's unusual for a blog post to drive a stock up double digits, but Inseego shares have been volatile this year due to excitement around the 5G deployment, as the stock is now up 67% year to date. Investors may have already been anticipating a strong second-quarter earnings report, given the momentum from work-from-home and the rollout of new 5G devices in the second half of the year. When the company reports next Wednesday, analysts are expecting a 42.7% jump in revenue to $79.8 million and per-share loss of a penny, compared to a $0.03 loss a year ago.

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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