Tracking tag firm Impinj implodes after guidance, large customers delays
Shares of RFID solutions provider Impinj (PI) nose dived after reporting quarterly earnings and guidance for the current quarter.
Following the earnings report, research firm Canaccord lowered its price target. The company describes itself as a leading provider of RAIN RFID solutions.
RAIN RFID is a wireless technology that connects billions of everyday items to the internet, enabling businesses and consumers to identify, locate, authenticate, and engage each item.
The Impinj platform is made up of both hardware and software and uses RAIN RFID to wirelessly connect everyday items to the internet, delivering digital life to the physical world.
The company provides solutions to a broad base of industries including retail, healthcare, and logistics. “Impinj is helping companies around the world increase sales, improve efficiencies, and deliver compelling experiences.”
#Impinj went public on July 21 of 2016 and saw its shares rise about 28% on its first day of trading.
Impinj reported second quarter financial results after the close of trading on Thursday evening. Q2 results were better than analyst expectations beating on both the top and bottom lines.
For Q2 the #RFID maker reported earnings per share of 6c on revenue of $34.1M. Analysts were modeling 2c for EPS on revenue of $33.51M. The problem with the report was in its tepid current quarter financial guidance and less robust product view for the year. The analyst provided Q3 guidance that was well shy of estimates.
The RFID tag maker is now guiding to an EPS loss for the current quarter of between (8c)-(1c) on lower revenue in a range of $31.75M-$33.25M. Analysts were predicting a profit of 8c on revenue of $37.75M. Founder and CEO Chris Diorio noted that the company will be adversely impacted by setbacks “in planned roll out expansions at several large end customers.”
The slowdown will result in fewer items being tagged with the company’s tracking chips. “We are revising our 2017 full-year endpoint IC estimated to be between 7B to 7.2Bunits,” said Diorio in a statement.
Late last year, shares of Impinj rallied after Amazon (AMZN) announced a new retail concept, Amazon Go.
Amazon said at the time that it is “a new kind of store with no check-out required… In fact, RAIN RFID can improve inventory visibility by more than 25%.”
Amazon expanded on its new store concept: “With our Just Walk Out Shopping experience, simply use the Amazon Go app to enter the store, take the products you want, and go! No lines, no checkout. Our checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning.”
Adding to the selling in Impinj shares on Friday was a price target reduction out of #Canaccord.
Canaccord’s Michael #Walkley lowered his price target on Impinj to $50 from $57 following Q2 results and lowered guidance.
The analyst noted delayed rollouts with a handful of customers in different verticals, including retail and healthcare, and said a single customer could represent several million endpoint IC’s. Management maintained its long-term guidance and Walkley said in the note that he expects re-accelerating revenue growth in 2018 and beyond.
As a result, Walkley maintained his Buy rating on Impinj shares.
Shares of Impinj are near their day lows, trading down over 23% to $36.60 per share in Friday afternoon trading.
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