Shares of IMPINJ (NASDAQ: PI) are soaring today, reaching a peak gain of 33.5% near 10:40 a.m., EDT. The maker of tools and equipment for tracking real-world goods in computer systems with RAIN RFID technologies reported first-quarter results roughly in line with analyst targets, alongside a modest view of the upcoming second quarter.
In the first quarter, Impinj's sales fell 21% year over year to land at $25.1 million. Analysts had been expecting a slightly larger drop to $24 million. On the bottom line, the year-ago period's earnings of $0.01 per share swung to an adjusted net loss of $0.38 per share, a penny below the Street's consensus estimates.
Looking ahead, Impinj sees the second quarter shaping up to have a net loss of roughly $0.34 per share on sales of approximately $26 million. More to the point, management said that the company should return to year-over-year sales growth no later than the fourth quarter of 2018 as its largest clients work through their RFID inventory stockpiles and start to expand their tracking infrastructures again.
This in-line report and cautiously optimistic guidance managed to trigger a 30% share-price jump because it was such a welcome break from the disappointments seen in recent reports. Even now, and including today's sharp surge, Impinj shares are trading 57% below their year-ago prices.
Some analyst firms believe that Impinj's downtrends should bottom out right about now, expecting a strong rebound in the second half of this year. Others want to see real evidence of order growth before lifting their views of Impinj's market value.
From my point of view, it's clear that RFID tracking has a bright long-term future and that Impinj should remain a leader in its chosen market for years to come. The company's balance sheet holds enough cash to support at least a couple more lean years -- and the RFID market should shape up long before that well runs dry. Up isn't the only way to go from here, but it's a very likely destination.
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