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On Tuesday, Piper Sandler adjusted its financial outlook for Impinj Inc (NASDAQ:PI), a leading provider of RAIN RFID solutions, by reducing the price target on the company’s shares to $100.00 from $140.00. The firm maintained its Overweight rating on the stock despite the change. Currently trading at $69.67, the stock has experienced significant volatility, falling nearly 70% over the past six months. According to InvestingPro analysis, the company appears slightly undervalued based on its proprietary Fair Value calculations. The revision comes on the eve of Impinj’s first-quarter earnings report, with analyst concerns centered around the company’s extensive exposure to macroeconomic factors and the current uncertain tariff environment.
Piper Sandler’s assessment points to Impinj’s significant exposure to consumer-related sectors, which may be impacted by a weakening consumer spending trend. According to the firm’s analysis, approximately half of Impinj’s endpoint integrated circuit (IC) revenue is generated from the retail apparel sector, with the rest nearly evenly distributed between general merchandise and logistics. This translates to an estimated 80% of Impinj’s total revenues being at risk due to the potential downturn in consumer demand. Despite these concerns, InvestingPro data shows the company maintains healthy fundamentals with a 51.6% gross profit margin and 19% revenue growth over the last twelve months. Get access to 13 additional exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
The ongoing uncertainty around tariffs is also a contributing factor to the revised estimates, as it could have a substantial influence on the company’s near-term guidance. In response to these concerns, Piper Sandler has reduced its revenue projections for Impinj by 3% for June and by 2% for September.
The analyst reaffirmed the Overweight rating, emphasizing the company’s strong market position despite the anticipated challenges. The updated price target of $100 reflects the firm’s adjusted expectations ahead of Impinj’s upcoming quarterly financial disclosure.
In other recent news, Impinj has reported fourth-quarter earnings per share of $0.48, surpassing analyst expectations of $0.40, though revenue was slightly below forecasts at $91.6 million compared to the anticipated $92.76 million. However, the company’s guidance for the first quarter of 2025 has raised concerns, with projected earnings per share between $0.06 and $0.11 and revenue forecasts ranging from $70 million to $73 million, both significantly below expectations. Needham analysts responded by cutting their price target for Impinj to $130 from $182 but maintained a Buy rating, citing the potential for a multi-year RFID adoption cycle. Piper Sandler also adjusted its price target to $140 from $235, while keeping an Overweight rating, expressing confidence in Impinj’s strategic approach to address inventory challenges.
The company’s management has acknowledged the headwinds facing the first quarter, attributing the subdued outlook to inventory adjustments, primarily with a logistics customer. Despite these challenges, Impinj is optimistic about its growth potential in the grocery sector, which is anticipated to drive RFID adoption. Analysts from Piper Sandler and Needham continue to hold a positive long-term view of Impinj’s growth prospects, despite the current absence of near-term catalysts. Impinj’s CEO, Chris Diorio, highlighted the company’s strong financial results for 2024 and its strategic positioning to leverage competitive advantages. Investors will be watching closely to see how Impinj navigates these challenges and capitalizes on its long-term growth potential.
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