Shares of Impinj (PI 1.13%) soared to a new all-time high on Thursday, following the release of impressive third-quarter results. The stock traded 27% higher at 2:40 p.m. ET, just a shade below the peak gain of 28.8% about an hour earlier.
The maker of tracking chips, data readers, and information management tools for radio-frequency identification (RFID) systems saw third-quarter sales race 51% above the year-ago result, stopping at $68.3 million. The adjusted bottom line swung from a net loss of $0.04 per diluted share to positive earnings of $0.34 per share.
The average Street analyst would have settled for earnings near $0.16 per share on revenue in the neighborhood of $34.7 million. Furthermore, management set fourth-quarter earnings and revenue targets comfortably ahead of the current analyst views.
Impinj reported strong demand for both end-point RFID tags and data-reading hardware. Citing conversations with major customers, CEO Chris Diorio also said that the positive market traction appears to stretch into the first half of 2023. As a result, the order backlog is deeper than ever.
Impinj is wrestling with a limited supply of components. Diorio noted that the supply-side struggle has eased up in recent months, but incoming orders still outstripped Impinj's manufacturing capacity by more than 50% in the third quarter.
Share prices have now doubled in 52 weeks as retailers, manufacturers, and healthcare systems continue to embrace the inventory management benefits of RFID tags. The stock isn't cheap, trading at 162 times trailing earnings and 12 times sales, but these business results give growth-oriented investors something to hang their analyses on.
And don't forget that supply-side limitations eventually have to go away, giving Impinj full access to its (currently underserved) customer base.
So you may want to wait for a modest pullback before building a full position in Impinj's stock, but the long-term future does look bright.