Why Are Impinj (PI) Shares Soaring Today
What Happened:
Shares of RFID manufacturer Impinj (NASDAQ:PI) jumped 10% in the afternoon session after the company announced strong preliminary earnings results for the fourth quarter of 2023. Impinj anticipates Q4'2023 revenue to exceed $70 million, surpassing its earlier guidance of $65.5 to $68.5 million, while adjusted EBITDA is projected to exceed $2.5 million, surpassing the previous estimate of ($0.9) to $0.7 million. The better-than-expected results will lead to higher estimates among Wall Street analysts as well as improved optimism among investors. As a reminder, stock prices often follow the direction of forward estimates, so if Wall Street is taking up their numbers based on these results, it's no surprise that the stock is up.
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What is the market telling us:
Impinj's shares are quite volatile and over the last year have had 31 moves greater than 5%. But moves this big are very rare even for Impinj and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 9 months ago, when the stock dropped 28.5% on the news that the company reported first-quarter revenue that narrowly beat analysts' forecasts, but its earnings per share came in below expectations. In addition, sales and earnings per share guidance for the next quarter fell short of the consensus estimates. Stocks generally react negatively to weak earnings performance and guidance, so this quarter's earnings should result in downward revisions in financial projections for the company.
Impinj is up 3.8% since the beginning of the year, but at $89.26 per share it is still trading 36.9% below its 52-week high of $141.40 from April 2023. Investors who bought $1,000 worth of Impinj's shares 5 years ago would now be looking at an investment worth $5,627.
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