- Impinj develops RAIN RFID chips and readers, providing Internet of Things (IoT) solutions for its clients, which include Coca-Cola, Cisco and Volvo.
- Impinj raised its Q4 2023 top and bottom line estimates on January 17, prompting Needham to reiterate its "buy" rating and raise its price target to $115 from $85 per share.
- Samsara generated $237.5 million, representing 40% YoY revenue growth in its fiscal Q3 2024 earnings report.
- 5 stocks we like better than Impinj
The internet of things (IoT) is a network of physical machines, devices, or "things" outfitted with sensors, applications, and connectivity, enabling them to collect and exchange data with other machines and systems over the internet.
IoT includes smart home devices, wearable technology, connected cars, warehouses, supply chains and smart cities. IoT has been around for decades, but it may be hitting a tipping point in 2024, just like artificial intelligence (AI) found its tipping point in 2023. Here are two IoT leaders in the computer and technology sector that may be reaching their tipping point in 2024.
Impinj Inc. NASDAQ: PI provides cloud connectivity platforms that enable IoT solutions. The company designs and manufactures radio frequency identification (RFID) chips (called tags and inlays) and RFID readers.
These sensors can be attached or embedded into products. Common-use cases include inventory management, baggage tracking, inventory management, loss prevention, supply chain automation, shipment verification and product authentication.
The company provides software that processes and analyzes the RFID data to provide data-driven actionable insights for its corporate clients like The Coca-Cola Co. NYSE: KO, Cisco NASDAQ: CSCO, Top Golf, Volvo and Haier.
Bring the RAIN
Impinj specializes in RAIN RFID, a specific type of RFID technology that uses an ultra-high frequency (UHF) band from 860 MHz to 960 MHz.
RAIN RFID offers many advantages, including longer read ranges, enabling items to be tracked from meters away, and improving asset and inventory tracking. It enables multiple tags to be read simultaneously, which improves efficiency in high-throughput applications. RAIN works effectively in environments with obstacles, like retail stores and warehouses. RAIN enables companies to locate, identify, authenticate and engage with every and any item tagged with a RAIN RFID tag.
Passing the trough
Impinj reported breakeven EPS for its Q3 2023 earnings report, which beat consensus analyst estimates by 10 cents. GAAP net loss was $15.8 million, non-GAAP net income was $0.1 million. Revenues fell 4.8% year-over-year (YoY) to $65 million, beating estimates of $64.75 million. Non-GAAP gross margin was 50.5%.
In-line Q4 2023 guidance
Impinj provided in-line Q4 2023 guidance. Revenue forecasts for Q4 2023 are expected to be between $65.5 million and $65.8 million. GAAP net loss range is expected from $17 million to $15.5 million. Adjusted EBITDA is expected to be between a loss of 9 cents and a profit of seven cents. Non-GAAP net income is expected from a loss of four cents per basic and diluted share to a profit of a cent.
Retail demand improvement
Impinj CEO and co-founder Chris Diorio commented, “While macroeconomic pressures continue to impact our fourth-quarter outlook, we believe our long-term opportunity remains intact. We see early signs of retail demand improvement, strong ongoing endpoint IC unit-volume growth despite the downturn and remain optimistic for the future.” Diorio noted that secular growth is expected in 2024 in parcel tracking and retail. Retail is buoyed by self-checkout trends driving 100% tagging and general merchandise expansion.
Raised Q4 2023 guidance
On January 17, Impinj provided upside guidance for Q4 2023, with revenues expected to surpass $70 million, up from previous estimates for $68.5 million versus $67.02 million consensus analyst estimates. Impinj also stated that adjusted EBITDA would be well above its previous expectations, prompting Needham to reiterate its "buy" rating and raise its price target to $115 from $85.
Check out Impinj analyst ratings and price targets on MarketBeat. Look for Impinj shares and competitor stocks on the MarketBeat stock screener.
Daily cup and handle
The daily candlestick chart on PI illustrates a cup and handle pattern. The cup lip line formed after peaking at $91.85 on July 19, 2023, before plunging to a low of $48.39 on October 25. Shares mounted a strong rally on its Q3 2023 earnings report, causing shares to gap up to $59.25 and continue towards the cup lip line at $91.85. The cup was completed on December 19, as it deflected shares off the lip line.
The pullback formed a daily market structure low (MSL) buy trigger on the $85.54 breakout. PI gapped over the daily MSL trigger level on January 17 upon the raised Q4 2023 guidance announcement. The daily relative strength index (RSI) rises toward the overbought 70-band. Pullback support levels are at $85.54, $78.39, $70.42 and $65.77.
If you ever forget what line of business Samsara Inc. NYSE: IOT is in, look up its stock symbol. IOT. While Impinj manufactures and develops RFID tags mostly used in retail applications, Samsara's core focus is on providing the Connected Operations Cloud platform for the logistics, construction, field support and transportation services.
Samsara offers hardware and software solutions for full IoT applications, with analytics to generate data-driven insights powered by artificial intelligence (AI). Its clients include The company, which has been knocking it out of the ballpark with double-digit earnings growth and non-GAAP profitability.
All systems are connected and surging.
Samsara reported non-GAAP EPS of four cents, beating consensus analyst estimates by four cents in its fiscal third-quarter 2024 earnings release. Revenues surged 40% YoY to $237.5 million, beating consensus analyst expectations of $224.65 million.
ARR rose 39% YoY to $1.003 billion. Its $100,000 contract club rose 49% YoY to 1,663 customers with annual contracts worth $100,000 or more. It added nine $1 million ARR customers, seven of whom are members of the Fortune 1000. Its video-based safety, vehicle telematics and smart equipment products are seeing over 30% YoY growth.
Strong Q4 guidance
Samsara provided fiscal Q4 2023 EPS guidance of two to three cents versus two cents consensus analyst estimates. Revenues are expected between $257 million to $259 million versus $250.42 million analyst estimates.
Samsara CEO and co-founder Sanjit Biswas noted that the company had reached the $1 billion ARR milestone after eight years.
Biswas discussed that the flywheel powering its business is accelerating as it converts data into AI-powered insights: "The first part of the flywheel is investing back in our platform, which has more than six trillion data points and 55 billion API calls over the last year. We are focused on increasing the operational dataset in our cloud. There are many drivers that will continue to bring more data in, including expansions to more asset types, international growth, and more ecosystem partnerships.”
Samsara analyst ratings and price targets are at MarketBeat. Look for Samsara peers and competitor stocks on the MarketBeat stock screener. IOT shares have an 8.22% short interest.
Daily symmetrical triangle
The daily candlestick chart on IOT illustrates a symmetrical triangle pattern. The upper descending trendline formed at the $36.91 high on December 14, capping bounce attempts at lower highs.
The lower ascending trendline started at the $29.80 low on January 4. The lower highs and higher lows meet at the apex point as IOT continues to trade towards it. This will result in either a breakout through the descending trendline or a breakdown below the ascending trendline in the coming days. The RSI is attempting to bounce through the 50-band. Pullback support levels are $30.70, $29.63, $27.68 and $25.76.
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