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On Thursday, Needham analysts revised their stance on Impinj Inc (NASDAQ:PI) by reducing the price target on the company’s shares to $130 from the previous target of $182. Despite the significant adjustment in price target, Needham continues to endorse a Buy rating for the stock. According to InvestingPro data, the stock has shown significant volatility, falling notably over the past three months, with a current P/E ratio of 122.5. The reassessment follows Impinj’s recent forecast, which indicated a downward trend in first-quarter revenues, diverging sharply from earlier market expectations.
The company preannounced last month that its fourth-quarter revenues were within the guidance range. However, the projection for the first quarter is notably lower, with an anticipated decline of 5%-9% year-over-over, in contrast to the Street’s prediction of a 21% increase. This outlook represents a significant shift from the company’s recent performance, which showed revenue growth of 10.11% in the last twelve months. This subdued outlook is attributed to channel inlay partners needing to deplete surplus endpoint IC inventory. InvestingPro subscribers have access to 15+ additional exclusive tips and comprehensive financial metrics for Impinj.
Impinj’s guidance also reflects that there are no significant program launches expected in the first half of 2025, which suggests that any rise in endpoint product revenues over the next few quarters is likely to be modest. Despite this, Needham analysts hold onto a long-term positive view of Impinj’s growth prospects. This optimism is partly due to the company’s potential expansion in the grocery sector, highlighted by its engagement with a second grocery chain for a self-checkout application.
Needham’s maintained Buy rating is rooted in their belief that Impinj is poised to benefit from a multi-year RFID adoption cycle. However, the firm acknowledges the current absence of near-term catalysts and has consequently revised its estimates for the company’s performance this year downward. The analysts’ commentary underscores a cautious but ultimately positive outlook on Impinj’s future amidst current inventory and market challenges.
In other recent news, Impinj, a key player in RAIN RFID technology, reported a fourth quarter earnings per share (EPS) of $0.48, exceeding the analyst consensus by $0.08. However, the company’s revenue for the same quarter fell slightly short of expectations, coming in at $91.6 million as opposed to the projected $92.76 million. The company’s future outlook has raised eyebrows, with first quarter 2025 projections significantly lower than analyst expectations. Impinj estimates an EPS between $0.06 and $0.11, and revenue between $70 million and $73 million, both well below consensus.
This guidance indicates a potential revenue decrease of 5%-9% year over year. Analysts from Piper Sandler and Needham have responded by reducing their price targets for Impinj, while maintaining positive ratings on the stock. CEO Chris Diorio acknowledged the challenges ahead, expressing the company’s intent to leverage its competitive advantages. These are recent developments and investors will be closely monitoring Impinj’s performance in the coming months.
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