What happened

Shares of Impinj (PI -2.98%) fell 12.4% in June 2023, according to data from S&P Global Market Intelligence. The provider of RAIN RFID (radio frequency identification) products that help enable the Internet of Things held its annual investor day on June 13, but its presentation didn't inspire its investors. Instead, Impinj's stock price fell 14% over the next two days.

So what

Impinj's management started their strategy update in fine form. CEO Chris Diorio underscored the company's focus on "a boundless Internet of Things," where RAIN RFID radio chips connect anything and everything to a larger network. Retailers and manufacturers can use the technology to track inventories and enable shoplifting sensors, shipping services use RFID to manage and automate their shipments, and hotels use it to track things like linens, towels, and staff uniforms.

Data from these RFID tags goes into spreadsheets, databases, asset-tracking systems, and so on. Based on these data pools, Impinj's customers can manage their processes more effectively, do deep-dive analyses, and more.

That's great stuff, and it gives the company a promising long-term business model, but it's old hat to Impinj's investors. So the market largely shrugged off the tidbits about new clients and expanded partnerships to focus on management's relatively modest projections for near-term business growth.

CFO Cary Baker simply reiterated the targets for revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) that Impinj issued at the end of April. He pointed to continued "macro-driven weakness in the retail apparel market," though the company's larger installation projects were progressing as planned. That was enough to motivate a sharp correction in Impinj's stock price.

Now what

If the market's reaction to unchanged guidance seems too harsh to you, you may have forgotten how disappointing that original forecast was. Impinj's stock plunged 39% on April 27, the day of that solid earnings report with a side of underwhelming guidance targets. Investors were apparently hoping for news that market trends had improved halfway through the quarter, and walked away without that encouragement.

But that's just life in the fast lane sometimes. Impinj has more than doubled its sales in two years despite the inflation-based headwinds of 2022. RFID-based tracking is a powerful business tool with a bright future, and Impinj's chart shows it behaving like a proper high-growth stock. It's still not cheap, trading at 7.5 times sales and 44 times forward earnings projections.

Your mileage may vary, of course, but I don't mind paying a premium price for a top-notch growth story. This could be a great time to buy the dip on Impinj's pricey but promising stock.